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Oct 28, 2006    |       6 comments

What to Do When Balance Transfers End

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I have a balance transfer offer ending next month for Credit Card #4. I am very sad to see it go because it was a nice 3.9% interest rate. I’m also sad that November is here because I hoped I would have paid off more of the balance. There is still $5,104 left.

The rate will shoot up to over 15%, so I have to figure out what to do with that balance.

I have two cards that I could transfer the balance of $5,104 to:

CC#2 – 6.90% for six months, no balance transfer fee
CC#3 – 7.99% for the life of the balance, no balance transfer fee

I am leaning towards going with CC#3 even though the rate is higher. Why? Because CC#4 was in both of our names and affected both of our FICO scores. CC#2 is the card in my name only. CC#3 is in my husband’s name. If I move that balance to my CC#3, my FICO score should move up because my debt utlization ratio will be lowered.

In doing this, I am taking a chance that I may be able to qualify for one of those 0% balance transfer offers from a new credit card soon (although the thought of getting another credit card makes me shudder).

This is the difficult part of trying to deal with debt. It would be so nice to just have the entire balance under one loan and one locked reasonable rate. I’ve thought about trying Prosper again for a loan to cover all of my debt since it is almost under $25,000 (Prosper’s loan limit). But I doubt I would be able to get a nice low rate due to the high amount. The same goes with the banks. To get the lower rates I need to play the balance transfer game.

Hmm…I just checked Prosper’s loan calculator, and if I borrowed $25,000 at 9.9% (which is what my current smaller loan is at), it would be a little over $800/month for my payment. I’m pretty sure we could usually pay more than that and pay off the loan before three years. Plus, I think my stress level would go down because I wouldn’t have to worry about making all these smaller payments on time. The convenience of one huge loan is very attractive.

I dunno. I think I am going to have to think this over some more. If anyone out there has thoughts – feel free to share.

Oct 27, 2006    |       3 comments

A Minor Debt Update to Report and a Decision is Made

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I paid a few more minimum payments on my credit cards yesterday, so that brings my credit card debt total to $26,664. There will be a bigger update by the end of the month, because I made an important decision yesterday.

I have been setting money aside for some home repair and I haven’t been having much luck in getting someone to do it. I am going to dip a little bit into that fund and pay off Credit Card #6. CC#6 was the one that was charging me finance charges and I didn’t catch it for a while because I wasn’t paying enough attention to my statements.

Since the terms that ended up being with the card were different then the sales lady told me, I was feeling pretty tricked. To add to that, I received new terms of agreement for that card. The change was not good.

I’ve thought it over, and I feel like I am holding a ticking time bomb with that credit card. I’m worried it is going to explode even more finance charges on me. I do not like this feeling, and I’ve never felt it before with any of my cards. I just want it to go away, and the only way to do that is to pay it off. I have the money, although some of it is for something else. I just feel so strongly about getting rid of that card that I’m willing to put off our home repair for a while longer.

Sometimes, I think you just have to follow what your gut is telling you. And my gut is telling me that CC#6 is bad news.

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