Are 0% Cards Still Available?
October 4, 2008
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This is part of our Pay Debt Quickly series sponsored by
PDQ Pay Debt Quickly kit.
Question: Cindy, I have over the past few years been rolling over funds from one 0% credit card to the next. I now have one for $8K expiring in a few months and have not seen any offers come in for low interest rate credit cards. What do you recommend? My credit score is very good, around 750 last time I checked and I am not in a position to pay it off. BTW, you helped me restore my credit score, remember? ~ Lucy
Answer: Hi Lucy, I do remember and 750 is a terrific credit score. Unfortunately, it is going to be tougher and tougher to find those 0% credit cards. You can blame the sub-prime mess for it, too.
In many cases, the banks are going using their credit card division profits to prop up their other operations. That means less good deals for consumers.
Take a look at Card Ratings.com run by my friend Curtis Arnold and get the best card you can find even if it’s not at 0%, although Card Ratings.com is still showing a number of 0% cards out there. Hopefully those good deals will come back especially for those with great credit ratings like you!
Warmly, Cindy
P.S. Curtis has written a new book How You Can Profit from Credit Cards: Using Credit to Improve Your Financial Life and Bottom Line.
Lower your Interest Rates? SCAM WARNING
October 3, 2008
This is part of our Pay Debt Quickly series sponsored by
PDQ Pay Debt Quickly kit.
The other day I got a call from “Mastercard and Visa” offering to lower my interest rates. “Yippee,” I thought.
But, I was immediately on guard because I know that Mastercard and Visa are separate companies and I didn’t think they’d be working together. Not that I know this for sure, but that’s what came up for me.
The guy told me that a lot of people are cancelling their credit cards because of high interest rates and the banks would rather lower the interest rates and keep the customers. He asked me if I had any cards with balances over $5000 and interest rates higher than 10%.
I laughed and said, “I don’t know.”
He said, “You don’t know if you have balances over $5,000?”
I said, “I don’t know if I have interest rates over 10%.”
Then I asked him if I would have to give him my credit card numbers.
Click.
I guess not.
Just a reminder to be aware of anyone who calls you looking for personal information. Legitimate companies, banks and the government DO NOT do that! Getting lower interest rates sounds like such a great thing that it’s easy to be taken advantage of.
It is OK to call your creditors and ask for lower rates. If you’re making the call to a verifiable phone number (such as the one on your credit card statement), go ahead and provide the information requested to identify you. They’ll probably ask a number of questions to verify that it really is you who’s calling.
Warmly, Cindy
P.S. Please pass this warning on to your friends and family.
P.S. Scam artists are also calling about the Economic Stimulus Money from the government.
NO ONE will call from the government about this check!
Credit Card Convenience Checks
October 2, 2008
This is part of our Pay Debt Quickly series sponsored by
PDQ Pay Debt Quickly kit.
Question: I am contemplating using a convenience check from my credit card company instead of taking out a personal loan from my credit union. The convenience checks carry a 3.99% interest rate for the life of the loan. However, a personal loan from my credit union would carry a 10.25% interest rate for the life of the loan which can be no longer than 5 years.
I am thinking about borrowing between $10,000 to $15,000. I have about a $400 balance on my credit card and would pay that balance off completely if I used the convenience check and resolve not to use the credit card again until the “convenience check” loan was paid.
I don´t have any debt obligations at the present time and was wondering which route would be the best route to go. Thanks in advance to any advice you could provide. ~ John
Answer: Hi John, excellent question. I can’t tell you exactly to do without knowing more info, but I can ask some questions that might get you thinking more broadly and lead to the answer that is best for your situation.
First, what will you be using the $10,000 - $15,000 for? How do you plan to pay it back?
If you pay it back using the minimum payments (15,000 loan at 4%), it will take you 209 months to be rid of your debt. In that time, you will pay $2,275.87 in interest. (play with it yourself at BankRate.com). This is a minimum payment of 2.5% of the balance or $375 per month.
If you take 5 years to pay it off (like the personal loan from the credit union) (found at BankRate.com), it will cost you $276.18 every month.
Interesting with the 2nd calculator: if you pay $375 per month, you’ll pay it off in 43 months.
Another thing to check is the fine print. Can they raise your rates if you are late on any other bill? This is a new “twist” many credit card issuers are adding (see previous article on Universal Default).
Just be sure what you are able to afford in terms of payback and the use of the money. Set aside reserves for the life’s usual “emergencies” like home/auto repair, medical expenses, job layoff or reduction, etc. Please don’t use the money to create additional lifestyle expenses like purchasing a boat or airplane or fancy car. These “toys” are far more expensive to keep up than the initial payment!
Hope this helps. Let me know if you need more info.
Warmly, Cindy Morus
Pay Debt Quickly
October 1, 2008
“Is Worrying About Your Bills and Debts Keeping You Awake Night After Night?”
January 7, 2009
3:00 - 4:00 Pacific/6:00-7:00 Eastern
Cost $29 Early Bird Registration by January 2
$39 after January 2
Class will be held on teleconference line to preserve your privacy (long distance charges apply)
Did you know that if you can pay all your bills on time, all you really have to do is change the way you pay your debts - using the money you already make!
Learn how to outsmart the credit card companies, get off the credit card debt roller coaster and create a new way of thinking and behaving about money that will change your life forever.
Step-by-Step Debt Elimination Plan available from instructor.
Fiancee has Lots of Debt
October 1, 2008
This is part of our Pay Debt Quickly series sponsored by
PDQ Pay Debt Quickly kit.
Question: My fiancee has a lot of debt. I’ve already helped her get out of some of it, but I’m not sure if this is a good situation to be married to. What should I do? ~ Sheldon
Answer: Hi Sheldon, you’re right to be concerned! I’m sure many of our readers can give you some good advice. (Readers can comment below).
My advice is for you to be very concerned. I have lots of divorcing couples in my office who say “I paid off his/her debt before we got married.”
Here are some questions for you to think about:
- How did she get the debt?
- What has she done to get out of it?
- What is she doing now to get debt free?
- Has she changed her money behaviors?
If she’s continuing the patterns that got her in to debt and looking for outside help (you), it’s a situation that will probably not get any better and you might find yourself in my office looking for divorce financial help.
Please encourage your fiancee to straighten things out before you commit to the marriage and if she’s unwilling, “RUN“. We all know the statistics on what money problems do to a marriage. Set yourselves up for success, not failure.
I’d be happy to work with you, too. As a Certified Divorce Financial Analyst, I much prefer to help couples before they end up in divorce.
Warmly, Cindy Morus
P.S. A good book to read is David Bach’s Smart Couples Finish Rich.
