So in the interest of saving money, I did a balance transfer on one of my high interest rate cards. For years, I’ve been miffed at this credit card I’ve had at a big bank. I would have canceled the card, but I’ve had it since college. I cancel that card and I cancel my credit history. If I shut down that card, my credit score would plummet.
Still, I hate the card at the big bank. It’s interest rate was 11.9 percent. I know it’s not the worst but I knew I could do better. After shopping around on sites such as bankrate.com, I found a card that could do a balance transfer and give me a 4.99 percent rate for the life of the balance. Mini-yay. I can’t give myself a high five because debt is debt, low rate, high rate, it’s still money you owe someone.
I did the balance transfer, but I’m a little upset that it had a $99 transfer fee. I tried to fight the fee, but I lost that battle. Since I’ve transfered the money, the big bank has increased my credit limit by $4,000. I really don’t need a higher credit limit, I needed a lower rate. Meh.
I have one other card with a balance but that rate is 2.99 percent. I *heart* that card. It’s with a credit union so I don’t feel like they are "sticking it to me" every chance they get. But still, I look forward to the day when I don’t have ANY balances. I know that day is coming, soon. *thinks positively*
So, what’s your credit card situation? Are you happy with your rates? Do you do balance transfers? Are you one of the good people who don’t carry balances? I showed you mine, show me yours.
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{ 13 comments… read them below or add one }
I’m not sure what my interest rates are because I don’t carry balances. Once upon a time (2001, I believe), I used a balance transfer to lower the rate of my car loan (I think it was ~7% back then).
Balance transfers aren’t good or bad, in an of themselves but I’ve seen numerous people do a balance transfer to secure a lower rate only to charge the original card back up.
Savvy, I envy that you haven’t carried a balance since 2001! More of us should follow your example.
Our balances are zero — but our interest rates are horrible! The hubs didn’t really think about credit before he met me — so his is outrageous — 30 percent or something. (it’s also a big bank card and they always charge overages for everything. The only reason we keep it, is that he’s had it for 10 years). Mine are better compared to that — about 13 percent — but not great.
Luckily, we’ve stopped using them. It’s great peace of mind to know that there’s not that extra bill every month!
I owe like $200 on my credit card for recent purchases. I limit my uses to dinners or plane tickets. That’s it. And dinners have to be over $50. I have only charged one such dinner on the card this year. So, very happy. Plus, my card has those reward points so every dollar I spend translates into a $20 or $30 gift card to any restaurant or retailer I choose. So, I think that offsets the rate. I don’t even look at the rate because I pay off my credit card every billing cycle.
Hi Frugalista,
I have never done a balance tranfer. I do not carry a balance on my card, as soon as that bill comes in I pay it in full. I feel the way you do I hate knowing that I owe something so I just pay it off.
However, I am ashamed to say that I dont know what my interest rate is…..yikes.
You are doing a great job and your balances will be a thing of the past before you know it.
Product Junkie Diva
Dear Frugalista -
Like so many people coming out of college, I was given credit cards (Miss Visa and Mr. MasterCard) and charged away like a lunatic.
Of course, since one taught me the basics of credit and spending, guess what happened? I got stuck with huge interest rates on four cards and mind-boggling monthly minimum payments.
Things were so bad I barely had two food stamps to rub together.
My savior was a credit card consolidation company that brokered lower interest rate deals with my credit card company, and gave me a monthly lump sum to pay off. Three years later, I was debt free — and now only use (and have) an American Express charge card.
For those who have crazy debt on their credit cards, sign up with a debt consolidation service. If not, you will be in the old folks home still paying off those shoes that you bought on sale 30 years ago.
The lesson is: If you cannot afford to pay what you buy in full by the end of the month, you cannot afford it.
Sign up with a debt consolidation service, get a charge card, and cut up your credit cards.
I have less than $1,000 in credit card debt and use a debit card for many routine grocery store purchases.
I have spent years living frugally and it is a way of life now. Do you really need cable? Gasp. Some people can’t live without it, but I watch a lot of DVDs and free public access television.
Although I love to eat out, I don’t do it often. And I think long and hard about major purchases.
If you’re deep in debt, you can’t build wealth.
Ok, clearly, the FF readers are pretty fab. Does anyone carry a balance these days? If so, come out and comment. Strength in numbers.:)
Well, I currently have 40000 in credit card debt. Two months ago it was $66000. Within the next 2 weeks it should be under 40K. Anyhow, my husband and I easily racked up debt buying just useless crap! And I got sucked into a designer purse addiction and spent $21000 in less than a year on purses (much of it on credit). The majority of our current credit is balance transfers with locked in rates ranging from 5.9-8.9%. I have one card I am aggressively paying off (my largest balance of 14K) that has a variable rate of around 10%.
I would also like to say that no one NEEDS a debt consolidation service. It can dramatically hurt your credit score. I am deep in debt, but make pretty good money. We were just pissing it away. Now all of our extra income every month goes to credit cards. We don’t NEED a consolidation service.
My 66K of credit card debt will be eliminated within 18 months…possibly less…shoot already eliminated 26K in 2 1/2 months. After those are paid off we’ll tackle the 71K in student loan debt.
Yay. Twiggers! So glad to have found you. And you have the right attitude about paying things off. And student loans, hmm, yeah. I shall post on those soon.
I carry a balance. I put myself on a plan to pay it off about a year ago, which includes paying off any new charges within 30 days. I’ll be finished by September (around the same time I finish paying off my student loans)
My interest rate is 14% and I earn miles that I use for at least 1 free plane ticket per year.
The key to a good balance transfer offer is to make sure that there isn’t a balance transfer fee (otherwise it just sucks).
Currently I don’t have any carry over balances on my credit cards. I recently paid down all of my credit card debt and NEVER want to look back!
Im proud to say, I do not own a credit card. No worries