Sunday, July 18, 2010

Dancing the Credit Card Shuffle. Again!

If you were reading me a year ago, you know that I jumped at a credit card offer to transfer one of my $8200 credit card balances to a 0%-for-nine-months new card. The cost of the balance transfer was $50.

Well, I've done it again!

I got an offer from HBSC (where I have my emergency account stashed) for a 0%-for-12-months-balance-transfer.

There are some downsides to this: (1) the transfer fee is $246 (3% of the amount transferred); and (2) the new card has a credit limit of $10,500 so my "credit used to credit available" ratio may impact my credit rating.

BUT the reason I went forward is that my net savings over 12 months will be $813. The card from which I'm tranferring the balance charges 15.99% interest, by far the highest interest credit card I have.

These kind of financial transactions always strike me as tricky and generally make me nervous. But the card, when it arrives, is going in the freezer with the rest of my credit cards.

8 comments:

Sharon said...

You can do it Grace, you just saved yourself $813.00. That's real money. Just close your old account out so you are not tempted to use it!

Nicole said...

Good luck! And keep up the good work!

Great job keeping those cards frozen.

Sandra said...

That is a great offer, but see if you will be charged interest on the $246 transfer fee? It's great that you are saving $567!!

Grace. said...

Sandra--I did check on the interest. If by some miracle, I could pay the entire balance off, there would be no interest--apparently this card does that only on cash advances. This particular balance transfer has a fee of 3%, but interest doesn't start until after the first due date. I've been paying around $88 a month in interest previously, so I won't have that for a year, but I will have the 3% charge. Over 12 months, I will have net savings in excess of $800, which is why I'm doing all this in the first place.

mydebtcomeback said...

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Grace. said...

Glad to hear it. I admire the fight you're making against your debt and your willingness to share the stumbles along with the successes.

Anonymous said...

Now that the grandkids are out of the house, you should be able to divert all the money you were spending on the excess costs to debt repayment. The utilities and grocery bills should have dropped substantially and that money should make a big dent in the remaining debt. Keep focused and remember "no" is a perfectly acceptable answer to requests for money from the kids and grandkids.

Grace. said...

Anon--you are correct that my utilities have gone down. Significantly. Two months ago, my electric bill was $157. This month (the first full month with the grandkids gone)it was $59! I expect similar reductions in my water bill as well. And it IS all going toward the debt.