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Great News from the Credit Union!

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I went into the credit union today to put the signature loan in my name alone–pursuant to the divorce decree.  While I was there I asked about options regarding both the interest rate on the loan as well as borrowing additional amounts to knock down one of the other two cards.  I am so happy to report that they lowered my interest rate to 4% AND increased the loan amount to $20,000!  I couldn’t believe it but then realized that I am better off standing on my own credit rating than combining with my former spouse!  Just another validation about the whole marital mess!

I’ll complete the final paperwork later this week and then make a payment to Bank of America to bring that balance down.  The BofA will continue to be my focus because A) the interest rate is the highest and B) say it with me…I hate Bank of America!  I’ll update the numbers when all of the transfers and such are complete.

Happy Day!  I’m feeling GREAT!  What a total shot in the arm at the beginning of this new year!


37 Comments

  • Reply Sarah |

    Congratulations! What a great shot in the arm. Must give you a lot of motivation to get B of A paid off. And yes, we hate B of A, too. They recently installed a plastic wall between the tellers and customers. It is so impersonal. We stopped banking there years ago but I went in to get change recently and was shocked when I saw the wall.

    • Reply gloria |

      moving debt does not pay it off, it just moves it around– sort of like what one does with vegetables on the plate that one does not like.

      • Reply Shannon |

        She’s not trying to hide her debt under her mashed potatoes. She did a good thing here, having the amount she owes on interest rate significantly reduced. That IS saving money. It’s not about the move, it’s about the savings as a result of the move.

        • Reply debthaven |

          I had to say I just LOVED that comment about Claire (not) hiding her debt under the mashed potatoes. LOL!

      • Reply Cathy C. |

        I’m sorry, but this is an asinine comment. It makes total sense to consolidate at lower interest rates. Less banks/loans to have to remember to pay and less interest to pay. I’ve refinanced my home 3 times in the past 2 years with no closing costs to take advantage of lower rates. Does that make me in denial that I own a mortgage or does it make me smart that I now have the ability to pay it off in 6 years vs. 20??

        Your analogy is cute, but Claire and the readers are interacting with this blog for a reason and it’s not to figure out how to free up room on credit cards and create more debt.

  • Reply Kasey |

    I hate BofA too! I cancelled my card when they tried to charge me an annual fee for paying on time every month. I have a balance just under $1500 on that card and can’t wait to be done with them for good!

    And hello! I just started following your blog. You’ve made a lot of progress over the years! I just started a getting out of debt blog and am close to your original balance. You’re an inspiration! 🙂

    • Reply gloria |

      BofA was my mortgage company and they were a dream to work with. I could transfer money to pay down principle whenever I had extra and schedule payments for the regular payment so easily. Unlike other companies, they really know how to make things easy in the mortgage department.

  • Reply Cathy C. |

    Oh, that’s fantastic news! Imagine how I feel–B of A holds our morgage hostage!! We can’t re-fi to get away from them until we pay it down more because we’re under water!! They suck BAD!!!

  • Reply Den |

    Congrats – what a wonderful feeling! Have you considered calling your other cc and asking for a lower rate? You could be on a roll!!!

  • Reply Chris @ Stumble Forward |

    I totally agree Claire I hate Bank of America as well. I use to have my mortgage with them but regret ever going with them. Personally I like working with a bank where I can talk to someone face to face about my situation rather than over the phone.

  • Reply Lori |

    Sorry, but I don’t quite understand the hate for banks (BofA, Chase, whoever) on this site. If you have a credit card and you do not pay the total amount owed every month, you are subject to interest rates that you were made aware of at the time you opened the card account. Regardless of the rates, or the increases that occurred in those rates, you signed a contractual agreement to pay them.

    The banks provided you a service. You wanted something you couldn’t pay for with cash, so they loaned you money. It’s not the banks’ fault your “want it now” factor was not kept in check.

    It’s nice to see you take responsibility for your CC debts now, but the lending institutions are not to blame for your spending behavior.

    • Reply Jen from Boston |

      I cannot speak for everybody here, but in general a lot of people hate commercial banks because of the extra fees they charge. They are for profit, so their interest rates will be higher than credit unions, and some of the larger banks have horrible customer service. BoA also has tried to nickel and dime people with frivolous fees.

      The hatred has NOTHING to do with debt. I know plenty of people who are debt free who dislike the large banks. It’s all about the bad customer service and the opportunistic fee charging.

      • Reply Claire |

        Thank you Jen and gift4gab and the others who addressed the BofA issue very quickly. I don’t often want to jump out of my chair upon looking at a comment but the suggestion that hating on BofA is wrong b/c I signed a contract wtih them made me want to do just that! I take FULL responsibility for my crap decisions re: finances. I wouldn’t be blogging here if I didn’t. What you all point out is true–this isn’t about what I agreed to in a contract since I’ve absolutely held up my end of that deal. Instead this is about the intangible of simple courtesy and no bullying! BofA is a bully and once you sign a contract with them (or in the case of the purchased mortgage, get STUCK with them) you are at their mercy. In my experience, it does seem that they go to extra lengths to be a miserable presence in our marketplace. Period.

        • Reply Lori |

          You state that you “held up [your] end of the deal.” If so, then why would BofA be “bullying” you? I’ve been a BofA customer for years and have never once been treated unfairly.

          The only circumstance I can imagine BofA “bullying” you is if you were delinquent on payments. Any lending institution, BofA, Chase, etc. wants the money lended to customers paid back. That’s why they’re lenders. So yes, they are going to get onto you if you don’t pay even minimum CC payments on time.

          However, if you truly “held up [your] end of the deal,” then you should seriously consider filing a complaint with the Texas Attorney General’s office or FTC.

          • Claire |

            I have never been late on any payment with any lender since I have been borrowing money. Ever. I hope to maintain that habit. As many people have posted here the bullying by big banks comes in the form of exploiting the borrower with obscene fees and absurd changes to the credit card agreement. Yes while technically allowed to do what they do under the terms of the contract, their often arbitrary reasons for doing so amount to bullying, in my view. I’m a lawyer. I understand what a contract entails. That’s why I use the non-legal term of “bullying” because I’m not talking about contractual terms here–I’m talking about a business deciding to make decisions that are not always “fair” to the consumer. There is not an actionable claim for “bullying” but there is the consumer’s right to free speech and I choose to use that right by repeatedly saying I do not like BofA.

      • Reply emmi |

        We are debt free and we hate large banks. Partly because they do not have personal service, nor do they care about local development, and they lose a lot of paperwork and there is nothing you can do about it except get away from them as soon as possible. Partly because they hold the rest of us hostage during the financial crisis.

        What did BofA do with their bailout money? Our money? Gave a chunk of it to a political group. Forget that. Look at HSBC laundering money for the Mexican drug cartels. Anyone go to jail? Nope. Too big, too much power. It undermines the democracy.

    • Reply gift4gab |

      It isn’t about hating the bank because you happen to owe them money. This is about not liking the way that particular company does business. Crappy customer service when you have a question or want to make a payment, selling account info despite requests not to, and just being plan difficult.

      BofA is not entering into a settlement agreement for billions of dollars because people borrowed money from them. They are abusive and corrupt. Unfortunately, that was not necessarily a known quantity when using the card or obtaining the loan. In our case, our mortgage was sold to them and they have been incredibly difficult to work with. Not because I can’t make my payments on time but because they are TERRIBLE at customer service.

      • Reply Lori |

        No, BofA and Chase, Citi and Wells Fargo are entering into a settlement with Freddie Mac over mortgage-backed securities issues, not because they are “abusive.” In hindsight, Freddie felt they paid too much for loans since many of them are now underwater. Ironically, Freddie didn’t feel that way when they initially purchased these securities because the housing market was continuing to grow at that time.

        Regarding the TARP bailout in general, a good book that details the goings on behind the scenes is Too Big to Fail by Aaron Sorkin. FYI…you’ll find that many banks, including BofA, J.P. Morgan/Chase, and Wells Fargo did not need the bailout $’s–all banks had to agree to TARP terms to “provide cover” for the weaker banks, e.g. Morgan Stanley, Goldman Sachs. If they all did not agree to terms, then there would have been a run on the weaker banks, thus creating a financial panic. The big banks paid back the funds as soon as was allowed by Treasury in 2009. Oh, and we, the American public, have made money on TARP, to the tune of $163 billion.

    • Reply Sarah |

      We had been B of A customers for over 20 years. My brother needed to borrow some money as a deposit on a house. I transferred the money at the teller from my California B of A account to his Washington B of A account with a comment that he needed the money that afternoon to buy a house. The teller put a 3 week hold on the money and did not tell me. It took him over an hour of sitting at his branch to figure out how to get access to the funds. He could have lost the house.

      My parents then paid me back for the loan (he ended up borrowing the money from them). B of A put a three week hold on those funds even though my dad had paid me back with a cashiers check. Yes, there is such thing as a fake cashiers check but he had gotten the cashiers check across the street at a US Bank branch five minutes before walking into the B of A branch. He suggested they call the branch to confirm the cashiers check was indeed real and had just been purchased and they refused.

      I then went into my branch the next day to try to remove the hold and they wouldn’t. We pulled our money from B of A within a week.

      I think B of A tellers are trained to hold deposits as long as possible no matter the circumstances.

      We now bank at First Republic Bank and have great customer service.

    • Reply Cathy C. |

      In my case, my original lender sold my mortgage to B of A and I had absolutely no choice in the matter. I hate B of A for their crappy customer service, unwillingness to work with me on a re-fi without exorbitant closing costs and an appraisal which,in my case, with a VA loan is NOT required, and impersonal approach.

      They are also a bank that contributed significantly to the housing market crisis in their previous risky lending behavior and are NOT a solid bank.

      • Reply Lori |

        Actually, that was Countrywide who was involved in shady business practices and “contributed to the housing crisis.” BofA purchased them in 2008 (actually Ben Bernacke (Fed chairmen) and Hank Paulson (Treasury secretary) forced the sale on BofA to provide stability to Countrywide’s balance sheet)and BofA inherited all of Countrywide’s problems. Hence the settlement BofA and other large banks (Chase, Citi, Wells Fargo) made regarding mortgages to Freddie Mac a few days ago. Much of it was Countrywide’s issues.

  • Reply OneFamily |

    That is great to get such a lower interest rate and able to transfer some of that BofA loan to that loan. Saves money and gets you out of debt quicker!

  • Reply Cathy D |

    Congratuations! BofA raised my interest rate a few years ago without any abuse on my part. It was simply the economy and a credit card I wasn’t even using, so I guess I got punished. Now I have been trying to pay it off for years and like you I am starting to make some progress! You really should be proud of yourself for getting the interest rate down too! You have motivated me to at least ask, when I wouldn’t have otherwise!

  • Reply adam |

    so are you saying you’re basically moving the B of A card balance mostly to the signature loan? although i’m generally not in favor of moving debt around, it looks like you won’t incur big transaction costs here, and you’ll lower your interest rate significantly (4% is fantastic). and you can reduce your number of payments.

    i think people’s general caution here is that getting a lower interest rate on your balance can also lower the urgency on paying it off. encouragement here then, is to keep paying it off just as intensely as you are now.

    • Reply Claire |

      Don’t worry Adam! This only gave me a greater sense of urgency as doing the math and seeing what a difference that drop in interest rate made only makes me want to stop paying interest to anyone! No fees involved for this transfer…just less money paid to BofA.

  • Reply Desperately in Debt |

    Way to go, Claire! Reducing the interest on the debt you hold is a significant move and kudos to you for requesting it! You’ve made great progress in the short amount of time you’ve been paying off your debt even in the face of such difficulties and it’s been a huge inspiration for me as I face my own trials! Keep it up in 2013!!

    • Reply Claire |

      Thanks Desperately–I feel my momentum building and I’m glad you are finding motivation in my mess! 🙂

      • Reply Adam |

        Yeah, seems like a great move then. It’s a really good deal since there are no fees. Oftentimes with balance transfers between cards, I think most of the savings get eaten up by the transaction costs. Way to go.

        With interest rates like that you should be borrowing the money at 4% and lending it back out at 6% to somebody else. You could start offering the Claire Card to people for 18% and just hang up the ol’ courtroom clothes.

  • Reply sasha |

    Claire – Wow! Great news. I remember a bunch of us suggesting this last year when you started your journey and to see you use it again to great effect is awesome!

    Keep up the great work and now think about how much ore of your payments are going towards your debt and not towards interest to B of A!!!! Yippee!

  • Reply JMK |

    If you transfer as much of that BoA balance over to the consolidation loan as you can (up to the $20k) you could pay off the remainder in 2-3 months! Wow! Not only would it be great not to have to deal with them, but it’s just one less payment to track every month. Far simpler to reduce to just the two remaining debts.

    I’m sure you’re planning to focus on the remainder of the BoA balance and then the other credit card, and only make minimum payments on the low 4% loan until the others are gone. Keep in mind that as you make those minimum payments you’ll be creating a little space between the balance and the $20k limit. No reason you can’t keep transferring over small amounts from the other balances to maximize what you have at 4%. Once both the others are finished then it’s pedal to the metal on the consolidation loan! Isn’t it amazing how one change can cause a ripple effect in how you attack this debt and how your outlook can change?

  • Reply debthaven |

    Oh, the suspense LOL! I can’t wait to see your update on Friday!

    I’m of two minds as to whether you have enough to pay off what won’t go onto the bigger CU loan, or if it will take you another month or two or three to pay off the rest, given the tax situation.

    Either way, this is GREAT news!

  • Reply Meghan |

    They did it! Awesome news! I was hoping you’d try that avenue. You should have BOA knocked out in no time and the interest rate is great. I wish mine had signature loans at that rate back when I needed it.

  • Reply Alexandria |

    I’ve never banked with a big bank – do not see the appeal. I always say that I am a big believer in personal responsibility. BUT responsibility goes both ways. Doesn’t give giant Corporations the right to screw everyone over. A lot of these fees, interest rates, tactics, etc., should be criminal. Some of it is criminal. B of A has had a few legal problems of late.

    Anyway…

    I must admit I figured you had enough on your plate and will probably pay off the debt quickly anyway. BUT, I had no idea you would score 4% for so much of the debt. That is *awesome*. Of course anyone getting out of debt would be best served to stop the bleed of high interest rates. Gives you a chance to actually make some headway.

    Great Job!!

So, what do you think ?