The Credit Blogger

Hello-

My how time flies when you are having fun.  It’s already March and many new year’s resolutions are either long gone and forgotten or you’ve already done something about them.  I’m still concentrating on getting my credit card debt paid off.  Had a couple of setbacks this past month though.

I started doing my taxes and found that I have to pay about $7,000 in taxes for 2008.  Ouch.  Since I am self employed, I am supposed to be sending in tax payments in each quarter which are estimates because the government cannot wait for its money so it can start spending it like crazy, hundreds of billions at a time.

And then my 94 Camry is on its last leg so I am in the market for a new used car.  I got pre-approved for an $8k auto loan at 5.4% and I withdrew $4100 from my whole life insurance policy so I have a budget of $12,000 for a car.

However, I don’t want to spend that much for a car if I can help it.  I can use some of the insurance money to go to my tax bill.

So I may have to cut back on my aggressive debt cutting practices so I can get a car and start paying on my tax bill.

In credit card news, my Discover Card now has a balance and they lowered my interest rate to 9.24%.  They offered me a balance transfer offer of 5.9% until Feb 2010 with a fee of 4% with a max of $150. Ouch.  It seems like just a couple months ago the fee was 3% with a max of $100.  They have to make their money somehow right?

I went onto a balance transfer offer calculator to determine if this was a good deal.  You can run your own numbers here: http://www.creditcards.com/calculators/balance-transfer.php

It said I would save almost $500 during the balance transfer offer net of the $150 balance transfer fee and would then save about $21 a month in interest after the offer was over.  So I transfered my USAA balance at 12.5% to Discover and now I have about $900 left to pay on my USAA card and get that one paid off.

So here’s the credit card debt report for March 2009:

USAA $908.48
Discover $9497.11
Bank Of America $15851.51
Chase $13746.62
AT&T Universal Card $9182.60

total credit card debt as of March 2009: $49,186.32

total credit card debt as of Feb 2009: $49,869.27

difference from Feb to March: $682.95 8-(

That’s not a lot.

I need to start making some more money so I can pay off my debts faster.  And then I’ll have a bigger tax bill next year.

Have a safe and happy spring break.

-Adam

The Credit Blogger

Hello-

Time for another look at how much credit card debt I still have left to pay off.  I’ve been focusing my efforts and extra payments on my Universal Card since it has a special 6 month promotion of 9.9% on my balances that do not have a special rate.  After the six months is over, the rate jumps back up to 15.9% or so depending on the LIBOR rate.

So after that happens, I am thinking about transferring the balance to my Discover Card which increased my credit limit to $10,000 and has a short balance transfer offer of 4.9% for 6 months and then it goes to the standard rate of 15.9% APR after that.

I also got a nice rate increase letter from my Chase card this month.  They are not happy with the profitability of my account so they want to raise my rates to 19.99%.  Since I am not a profitable customer because I pay all my bills on time and do not give them the pleasure of charging me late fees or over the limit fees or any other crap fees they can think of.  So I have to write them a letter and opt out of their high rate offer and keep the special lifetime balance transfer offers I have with them at 3 and 4% APR.

And there are rumblings that USAA is increasing rates too for a lot of their customers to improve profitability of their credit cards but I have not received a letter yet so let’s cross our fingers.  If USAA does increase its rates on my card, I will have to opt out of that too and I will be left with my Discover Card as the only one I can use.

So one way or another, I will not be able to use plastic in the near future at all.  Which is not necessarily a bad thing.  Since I used those plastic cards too much to get in a mountain of debt in the first place.

Enough about that, let’s take a look at my current credit card debt for Feb 2009:

AT&T Universal Card: $9697.17

USAA: $10,167.73

Bank Of America: $16,057.08

Chase: $13,947.29

Discover Card: $0.00000000000000!

Add it all up and you finally get under $50,000! $49,869.27

Total credit card debt started with: $62124 Feb 2008

Total credit card debt paid off in last 12 months: $12,254.

My income went up in Jan so I should be able to make a few extra payments in big chunks to take a nice bite out of my Universal Card so I can stop paying so much in interest charges each month.

Thanks for reading,

Adam

The Credit Blogger

Hello-

Happy New Year!

It’s 2009 and time for people to make the New Year’s Resolutions – lose weight, stop smoking and get out of debt.

I’ve been reading this book by Scott Bilker about talking your way out of credit card debt – in it he has transcripts of calls that he made to credit card companies to get his debt reduced.  He made calls to waive late fees, lower the interest rates and get better offers.  Sometimes it worked and sometimes it didn’t.

He pointed out that the calls usually didn’t take that long – maybe 5-10 minutes.  And then he calculated how much interest he saved on that phone call, and usually it came out to earning several hundred dollars an hour becuase each call only took a few minutes.

I recently did this with all my credit cards and I wasn’t so successful.

It seems the financial crisis and huge credit losses the banks and credit card companies makes them want to extend less credit and be less generous with their credit offers even though prime is so low right now – currently at 3.25%. The banks and credit card companies are trying to recoup their losses from the bad customers by making the good customers pay higher rates.

I have 5 credit cards – Discover, Bank of America, Chase, ATT, and USAA.

The only one that was able to reduce my rate for any period of time was ATT and they are closing my account soon anyways because their computers show I am a bad risk.  They reduced my purchases rate from 15 to 9.9% for 9 months.  They had a rate of 7.9% for 6 months but I went with the longer term because it saves a little bit more.

Discover card offered to extend a balance transfer offer from April to August but no waiving that 3% fee that can cut into your savings.  $100 just to transfer a balance!

And then I called USAA and the rep said that USAA was raising rates on all customers by 2% on February 1st. And that I should have received a letter.  No letter.  That’s crap.

So because they made bad investments, they have to charge higher rates for their good customers – nice way to treat your customers.

So all in all, I wasn’t too thrilled with talking my way out of debt, maybe in a different market environment I would have had better results.

Don’t let that stop you though.  If you have a good payment history and a good credit score – call your credit card companies and see if you can get your rates reduced.

You don’t need to pay more interest than you have to.

-Adam

The Credit Blogger

Hello-

I just finished sending in a payment for the remainder of my Discover credit card balance to get it paid off.  Yippee!

Here’s the scheduled payment:

The posting date is December 25th, so I guess it’s a Christmas present to myself.

In Feb of this year, the balance was almost $6,000.

I just finished making my payments for the year for all my other credit cards trying to get my balance under $50,000 for the year and let’s tally the numbers:

Discover Card: $0!!!!!!!

USAA: $10,247

ATT Universal Crappy Card: $10, 342

Chase: $14,109

Bank Of America: $16,089

Total outstanding credit card debt end of December 2008: $50,787 (

Guess I didn’t make as many payments as I thought I did.

At least I got one credit card totally paid off.

If you haven’t already heard, there were some new regulations passed down to the banks and credit card companies that are supposed to make it easier on us consumers.  The biggest one I like is the no more universal default clause.  I hated this one.  If you make a late payment on one card, all your other cards could penalize you.  How fair is that?

The other one that I liked was the applying your credit card payments to the highest interest balance first.  I have several low balance transfer offers for the life of the balance transfer on some of my cards and they charge 3 or 4% interest and other balances on that same card for 18% interest and the payments I make go to the lowest interest rate offer so I pay much more in interest while I have that outstanding balance.

I just want to get these cards paid off so I can stop flushing money down the drain to these greedy credit card companies in interest charges.

Total credit card debt started with: $62124 Feb 2008

Total credit card debt now (December 2008): $50,787.

Total credit card debt paid off this year: $11,337.

Looking forward to getting over $25,000 of credit card debt paid off in 2009.

Wishing you a Merry Christmas and Happy New Year!

-Adam

The Credit Blogger