Did Your Bank Flip You “The Bird”?
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After years of aggressive solicitations offering low balance transfer interest rates for the life of the loan, Chase recently sent thousands of its customers payment increase letters.
Here’s what it means on a monthly basis:
Balance: $10,000
Old Payment (2%): $200
New Payment (5%): $500
Previously, the amount of the payment was approximately 2% of the balance - now it will be 5% and the only way you can keep a lower payment is to close the account and take a higher interest rate.
I moved my car loan to a Chase card 2 years ago at 3.99%. Last month the payment was $187 and I paid $301. Continue reading
Should I Close My Credit Card?
This is part of our Financial Literacy Question and Answer series
Question: I have an extremely low APR (6.24%) with one credit card company, and am pretty good at making my payments on time, if not early. However, another credit card company has raised my APR to 29.99%. They’ve offered to close my account at a set APR of about 3% or so but I’m afraid of how it will affect my credit. What can I do about it? Thank you! ~ Renee
Answer: Hi Renee, that’s a great question. Normally I would discourage you from closing your credit cards because it can hurt your credit score.
However, if I was in this situation, I’d take the hit on my credit score for the short term and get that 3% interest rate! If you owe $10,000 and your minimum payment is $260, it will take you 11 years and you’d pay $24,231 in interest!
If your interest rate is 3% and you continue to pay $260, you’d have it paid off in about 3 years and the total interest would be $527! That’s a big difference!
In time, your credit score will recover and, you’ll save a lot of money in the meantime!
You may want to get my Pay Debt Quickly so you can create your own debt payoff plan. It’s fun to see what a change in interest rate or increasing your payment will save you in interest charges!
Are Credit Cardholders Finally Getting A Break?
I’m sure many of you have opened your credit card bills to some nasty surprises in the last year; surprise interest rate increases and nasty lower credit limits - even for those who pay on time!
Last month, President Obama signed the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CCARD) also known as the Credit Cardholder’s Bill of Rights that’s been called “sweeping legislation that reforms the credit card industry” and a homerun for consumers. Is it? Let’s see… Continue reading
Unemployed? Top 5 Tax Traps!
If you’re unemployed, you’ve got a lot of company out there. AND, there are some tax traps that could make your financial a lot worse. Avoid these common tax problems now!
- Tax Trap #1: Unemployment Income isn’t taxable. Sorry, the tax man does wants a cut of the action even when you’re unemployed. The easiest way to handle the taxes is to have them withheld just like a paycheck.
- Tax Trap #2: Killing Your Golden Goose When You Raid Retirement Accounts.
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