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Discussion Starter · #1 ·
I'm thinking about opening a new credit card with 0% interest and transferring the balances from my other 2 cards (about $5,400) to the new card and paying it off within a year (which I almost certainly can do with my new promotion). My interest rate on both cards is 20%. My credit score is very good, my interest rate went up from 11% to 20% after the economy crash. Very, very irritating, I've never been late on a payment.<br><br>
What do you think? Should I get a new card or just keep paying the 20% interest I have until I pay it off? The reasons I'm hesitant to open a new card are: It can hurt my credit to apply for more credit and opening a new account lessens the average age of my credit file. Is it worth the drop in score? Is it a big drop?
 

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I use 3 credit cards and my motto is :Always pay off your full balance by the due date! I don't care what the interest rates are. Of course, I like cards with no annual fees.<br><br>
But back to your situation...20% interest rate is very high. I don't think getting a new credit card will be a problem if you can pay off the balance. I don't know how much monthly balances on average you accrue on your credit cards, but I would recommend reducing the balance (i.e. reducing the amount you spend on your cards each month) if possible if you cannot pay off the whole amount each month.
 

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Discussion Starter · #3 ·
That was my motto until I had to quit my job because of sexual harassment, then couldn't find another. I blew through about 6k in my savings and racked up the credit card debt when I was unemployed for a while and took a job with a pay cut of 2/3. Like now, I made less than I needed to survive. I won't be done with training for my promotion for another 3 weeks or so.<br><br>
In the last 3 months, I've racked up about $1,000 in debt from Sweet Pea's cake incident ($350), gas ($55-60 every time I fill up), and food (for me and my pets). I'm trying not to use my card at all, but I'm making $9 an hour and it's impossible. Luckily my car will be paid off in June, but I also have to move out on my own soon, which will cost anywhere between $600-1,000 a month. This promotion is going to save my butt, hopefully. I'm also going back to school in the fall, so that's going to cost me money and I'll have to cut back on my work hours. It's impossible for me to be debt free right now, I just don't have the means. Being poor sucks.
 

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<div class="quote-container"><span>Quote:</span>
<div class="quote-block">Originally Posted by <strong>danakscully64</strong> <a href="/forum/post/2850961"><img alt="View Post" class="inlineimg" src="/img/forum/go_quote.gif" style=""></a><br><br>
I'm thinking about opening a new credit card with 0% interest and transferring the balances from my other 2 cards (about $5,400) to the new card and paying it off within a year (which I almost certainly can do with my new promotion). My interest rate on both cards is 20%. My credit score is very good, my interest rate went up from 11% to 20% after the economy crash. Very, very irritating, I've never been late on a payment.<br><br>
What do you think? Should I get a new card or just keep paying the 20% interest I have until I pay it off? The reasons I'm hesitant to open a new card are: It can hurt my credit to apply for more credit and opening a new account lessens the average age of my credit file. Is it worth the drop in score? Is it a big drop?</div>
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I say get the new card and use it like you've outlined if there are no balance transfer fees or other high fees. It should not be a big drop and you may get a boost when you pay the balance off.
 

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Discussion Starter · #5 ·
Thanks <img alt="" class="inlineimg" src="/images/smilies/smiley.gif" style="border:0px solid;" title=":)"> I get tons of credit card offers from Chase, I'm probably going to go with them. I wonder if they have some of rewards card that will work for me (no annual fees).<br><br>
Chase seems to have a 3% transfer free, can you recommend a company that doesn't?
 

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<div class="quote-container"><span>Quote:</span>
<div class="quote-block">Originally Posted by <strong>danakscully64</strong> <a href="/forum/post/2851026"><img alt="View Post" class="inlineimg" src="/img/forum/go_quote.gif" style=""></a><br><br>
Thanks <img alt="" class="inlineimg" src="/images/smilies/smiley.gif" style="border:0px solid;" title=":)"> I get tons of credit card offers from Chase, I'm probably going to go with them. I wonder if they have some of rewards card that will work for me (no annual fees).<br><br>
Chase seems to have a 3% transfer free, can you recommend a company that doesn't?</div>
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I can't name one with no transfer fee. I like chase for credit cards; I have the Amazon one and earn a lot of cash back or Amazon certs. I'd go with the 3%; you'd still save money over the 20%!
 

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Discussion Starter · #7 ·
<div class="quote-container"><span>Quote:</span>
<div class="quote-block">Originally Posted by <strong>*AHIMSA*</strong> <a href="/forum/post/2851037"><img alt="View Post" class="inlineimg" src="/img/forum/go_quote.gif" style=""></a><br><br>
I can't name one with no transfer fee. I like chase for credit cards; I have the Amazon one and earn a lot of cash back or Amazon certs. I'd go with the 3%; you'd still save money over the 20%!</div>
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Thanks <img alt="" class="inlineimg" src="/images/smilies/smiley.gif" style="border:0px solid;" title=":)"> I think I'll call Chase this weekend (once my voice is back) and ask questions.<br><br>
I'm trying to figure out the difference between the Freedom Card and Slate. Freedom gives you rewards, Slate seems to focus more on getting rid of debt. Hmmmm.
 

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Read the fine print and make sure you understand all the different circumstances that will trigger an automatic increase in your rate. They may promise 0% for a year, but there are likely all sorts of different stipulations that they will write into the contract that will allow them to invalidate that rate and start charging much more. Confusing consumers and getting them to trip up is how they make their money.
 

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Discussion Starter · #9 ·
Thanks <img alt="" class="inlineimg" src="/images/smilies/smiley.gif" style="border:0px solid;" title=":)"><br><br>
A bit ago, my aunt suggested going to the bank and just getting a low interest loan and paying off the credit cards. I'll have a fixed rate and it will be lower than what any credit card company could offer. Does anyone know much about this? I was thinking about taking out $5,000 and having it be a 12 month loan. I can just pay it off faster in large chunks. Thoughts?
 

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The bank loan might be a good idea, but unless you have a savings account and a steady work history, you might not have the required collateral. Also, you lose the flexibility you have with a credit card should you lose your job or have any more large expenses.<br><br>
You might want to contact your current credit card company to see if they will reduce your interest rate based on your good payment history. Sometimes talking to someone helps.<br><br>
Definitely read the fine print if you get a new card. These companies want to make money. Look to see if the 0% that applies to transfers has a time limit.<br><br>
Good plan to get rid of credit card debt! It's such a burden.
 

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In terms of your credit rating, if you close the other credit card accounts, they should *theoretically* be removed from your credit score calculation. So, yes, definitely transfer the balance, call the CC customer service and close the accounts (Leaving a zero balance is not closing them).<br><br>
Also, when you switch to the new credit card, cut it up to avoid the temptation of buying more stuff and increasing the balance. You may be able to pay $5400 off in a year, but what about $6400 or $8400?...<br><br><b><span style="text-decoration:underline;">Also, make absolutely certain you can pay off the $5400 within the specified time frame.</span></b> I've heard of some companies that will retroactively nail you with all of the interest they would have earned over that 12 months if they had been charging you a normal interest rate.
 

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<div class="quote-container"><span>Quote:</span>
<div class="quote-block">Originally Posted by <strong>danakscully64</strong> <a href="/forum/post/2850961"><img alt="View Post" class="inlineimg" src="/img/forum/go_quote.gif" style=""></a><br><br>
What do you think? Should I get a new card or just keep paying the 20% interest I have until I pay it off? The reasons I'm hesitant to open a new card are: It can hurt my credit to apply for more credit and opening a new account lessens the average age of my credit file. Is it worth the drop in score? Is it a big drop?</div>
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I don't know enough about this from the US financial perspective to give you ultra reliable advice, but just from a general perspective, I would transfer to a new card with a low interest rate with no catches (like raising the interest rate after 6 months), destroy the new card when it arrves so you don't rack up any more debt and apply for a DEBIT card. That way, you can use it like a credit card, I.E you aren't paying for things in cash, but it comes out of your bank account instead of being charged up in credit.<br><br>
If you find that when the new CC arrives you are unable to bring yourself to destroy it, beware, because that's usually a red flag that you are going to start charging credit again at some stage and you will go back to where you started. <img alt="" class="inlineimg" src="/images/smilies/undecided.gif" style="border:0px solid;" title=":-/">
 

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there's another way to skin the cat. i got a card from capital one, no interest on charges. then you charge all you current expenses on the new card, and pay the old ones off with ALL your paychecks. since my monthly expenses are thousands every month, it's easy to move my money this way. of course, at the end of the period (in my case a full year), there's a high rate. the idea is to kill the balance before that.<br><br>
even if you move it at the 3%, you'll save if the intro period is long enough.<br><br>
but consider the trend here. if you blew through your 6k and then you charged 5k, that's 11k for someone who is single, etc, and should be able to get by on very little. this should tell you something. don't charge on multiple cards, because this can get away from you very quickly.<br><br>
if you have debts, you are a slave to the bank. my motto is never me, never again.
 

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Having a perfect credit score is overrated imo. Mine is excellent, but I wouldn't hesitate to trash it, temporarily, if it were in my financial interest to do so. For instance, mine took a hit recently because I chose to take out 3 more lines of credit at 3 different department stores in order to save an additional $750. I'm not planning to take out any loans in the near future, so I don't care. I already have a very low interest rate on my home loan, which won't be effected, of course. Keeping perfect credit would have cost me $750. Not worth it!<br><br>
Unless you are planning to use your credit score rent a place (once you're in you're in) or take out a loan, I wouldn't worry about it. Do what makes the most financial sense for you. If you want to buy a house in a few years, there are lots of things that you can do to bring up your score.<br><br>
I'm no expert, but this strategy has worked for me. <img alt="" class="inlineimg" src="/images/smilies/smiley.gif" style="border:0px solid;" title=":)">
 

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Discussion Starter · #15 ·
Thanks everyone for the replies!<br><br><div class="quote-container"><span>Quote:</span>
<div class="quote-block">Originally Posted by <strong>Beancounter</strong> <a href="/forum/post/2851489"><img alt="View Post" class="inlineimg" src="/img/forum/go_quote.gif" style=""></a><br><br>
In terms of your credit rating, if you close the other credit card accounts, they should *theoretically* be removed from your credit score calculation. So, yes, definitely transfer the balance, call the CC customer service and close the accounts (Leaving a zero balance is not closing them).<br><br><b><span style="text-decoration:underline;">Also, make absolutely certain you can pay off the $5400 within the specified time frame.</span></b> I've heard of some companies that will retroactively nail you with all of the interest they would have earned over that 12 months if they had been charging you a normal interest rate.</div>
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Wait, so if I close the accounts with no balance on them, they stay on my credit score?<br><br>
That's confusing... It's not a loan, so how would I get charged interested for not paying off the card in a year?<br><br><div class="quote-container"><span>Quote:</span>
<div class="quote-block">Originally Posted by <strong>Nishani</strong> <a href="/forum/post/2852186"><img alt="View Post" class="inlineimg" src="/img/forum/go_quote.gif" style=""></a><br><br>
destroy the new card when it arrves so you don't rack up any more debt and apply for a DEBIT card. That way, you can use it like a credit card, I.E you aren't paying for things in cash, but it comes out of your bank account instead of being charged up in credit.</div>
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I've had a debit card for 8 years. The whole point of a credit card is to use it when needed, which I did. I'm not a frivolous spender, never have been, but college books, vet bills, and car repairs sometimes exceed my annual income (which is insane). Mason's 5 day vet stay cost me $1,500, which is currently more than I make in 2 months.<br><br><div class="quote-container"><span>Quote:</span>
<div class="quote-block">Originally Posted by <strong>papayamon</strong> <a href="/forum/post/2852217"><img alt="View Post" class="inlineimg" src="/img/forum/go_quote.gif" style=""></a><br><br>
But consider the trend here. if you blew through your 6k and then you charged 5k, that's 11k for someone who is single, etc, and should be able to get by on very little. this should tell you something. don't charge on multiple cards, because this can get away from you very quickly.<br><br>
if you have debts, you are a slave to the bank. my motto is never me, never again.</div>
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11k is super easy to go through in 2-3 years when you drive a car, have pets, and are in college. Easy. In the last 2 years, I've spent almost 3k on vet bills alone, not including the cost of their food, shavings, replacement bottles, new cages, etc. It adds up. I charged about 1-2k in books and tuition. I needed a new water pump and other stuff for my car, that's another 2-3k. Part of that money from my savings went to car payments, insurance, gas, etc. When you make 8-10k a year and need to make closer to 18k (which is still below the poverty line), it's tough to get by. Plus food costs, clothes, gas, doctor visits, personal care products, etc. Not really sure how a single person still can get by with very little, I think 10k still isn't enough, especially living somewhere were rent is 1,100k a month for a 2 bedroom apartment.
 

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<div class="quote-container"><span>Quote:</span>
<div class="quote-block">Originally Posted by <strong>danakscully64</strong> <a href="/forum/post/2855534"><img alt="View Post" class="inlineimg" src="/img/forum/go_quote.gif" style=""></a><br><br>
I've had a debit card for 8 years. The whole point of a credit card is to use it when needed, which I did. I'm not a frivolous spender, never have been, but college books, vet bills, and car repairs sometimes exceed my annual income (which is insane). Mason's 5 day vet stay cost me $1,500, which is currently more than I make in 2 months.</div>
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Then basically, it sounds like you can't afford credit - even more reason to cut that card up when it arrives, else you're probably going to be in debt for the rest of your natural.
 

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Discussion Starter · #17 ·
<div class="quote-container"><span>Quote:</span>
<div class="quote-block">Originally Posted by <strong>Nishani</strong> <a href="/forum/post/2855544"><img alt="View Post" class="inlineimg" src="/img/forum/go_quote.gif" style=""></a><br><br>
Then basically, it sounds like you can't afford credit - even more reason to cut that card up when it arrives, else you're probably going to be in debt for the rest of your natural.</div>
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That's my point, I have to have credit. If I didn't, I wouldn't have completed my classes at community college, Mason would be dead, Sweet Pea could have died from the cake incident, I would have lost my car, and job. I'm getting a promotion, so I'll be making enough to get by (hopefully) and not rely on credit (hence the thread). Making $9 an hour sucks, as does being unemployed for a year. Fingers are crossed for $$$ this year. <img alt="" class="inlineimg" src="/images/smilies/smiley.gif" style="border:0px solid;" title=":)">
 

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don't close your old zero balance accounts. keep them open and charge on occaisional small charge on them, then pay it immediately. length of time accounts are open figures into your credit score. unused credit is gold, used credit is poisen. the big reason you want a high score will be purchasing a home. it's not buying anything else, but it all depends on what you want out of life. the banks want you in debt.<br><br>
i can assure you in later years that owning a home free and clear and having no debt will give you a lot of freedom. of course, what weighs into the mix is you'll probably end up getting married, etc at some point. if i could go back in my life, i'd have been a lot more systematic about my approach to debt and spending. unfortunately, you can only go forward. i've got my mortgage down to 38k now, and that still seems like a fortune. the house i do own free and clear is sitting empty, like 20% of the homes in florida, and i can't sell it. what has me trapped is that 38k loan on my farm. this real estate disaster in florida has really hammered me. if i had been smarter about handling my money, i'd have no debt at all now. i could take months off work at a time.<br><br>
when it comes to money, there are no easy answers. money has wings, and flies away from us all <img alt="" class="inlineimg" src="/images/smilies/smiley.gif" style="border:0px solid;" title=":)">. if i were you, i'd start doing a lot of financial reading from the carry no debt gurus.<br><br>
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Discussion Starter · #19 ·
That's what I thought, keep them open. Will do <img alt="" class="inlineimg" src="/images/smilies/smiley.gif" style="border:0px solid;" title=":)"><br><br>
I'm trying to get out of debt, hence the thread. I won't be using my credit card once I start serving. I have 2 more years left of school, then I can get into a career. What sucks is I have to get into debt with student loans soon, so my goal is to pay off credit card debt first. I'm REALLY good at managing my money, the problem is having enough of it to manage. In 2 weeks, if I pass my server final, I can start picking up shifts. <img alt="" class="inlineimg" src="/images/smilies/smiley.gif" style="border:0px solid;" title=":)"> Being poor sucks. People keep telling me to get food stamps, but I don't feel right doing that. I was going to be homeless in 2 months, but the promotion saved by butt.
 

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Food stamps isn't just for the homeless, it's for people who need assistance. You would be surprised at who you know that has food stamps.
 
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