I've got a question for anyone who has paid off their credit card or who has switched companies. I'm getting molested by my current credit card company. 24% interest. I'm not in default on payments but have been late on some payments and of course that's the penalty. I want to pay it off but at that interest rate I can't get ahead. It seems that when I send in extra, they figure out extra charges to eat up that payment and my balance remains the same.

Now for the question. I'm holding two offers from other companies that want to offer me 0% for 12 months and 7.99% after that..... unless I'm late or miss a payment, then it goes to 24%. Should I switch over companies and cancle the first card? Or should I just stick it out, try to raise some more money and pay it off? (We're not talking a huge amount here, about $3K).

 

I'd shop around for a card that has a lower interest rate and no penalties for late payments or balance transfers. Check with your bank too. Many banks offer CC with acceptable rates. Having a bank account with them may give you some benefits.

On many CC's, balance transfers carry a different rate than purchases. Watch out for that.

 

It probably wouldn't hurt to do this once. However, switching back and forth between companies will affect your credit rating. Negatively.
Make sure you get the lower interest rate first. Just because they offer it doesn't mean you will get it. I think if you look at the fine print it will state that the rates vary depending upon your credit rating.
It would also be interesting to find out what other fees or charges they are adding. They can't charge extra if you are not late.

 

You could also borrow the money to pay it off. A signature loan, or home equity loan will have a lot lower interest rate and will lock you into a definite repayment schedule. If you go this route I would also find another card with a better rate, and avoid carrying a balance on it if possible.

 

Plus, these options are tax deductible.

 

Try Capital One. I transfered a large balange at 4.99% for the life of the balance. No fees but if Late, can go as high as 24.99% (all companies are now doing this)
C.O. charges 3% of ADB (average daily balance) for minimun payment but you will see the balance drop every month. So far, a good experiance with C.O.

 

Many suggestions posted here I have tried. I personally think the best may be to take out a home equity loan if you have one, and go that route. If you file itemized, its tax deductible. ( You did spend some of it repairing your house, right? )

Credit card companies are stooping to even new, sleezier lows, offering low interest credit cards, but buried deep in the agreement is the right to raise your interest rates tremendously if you are late. They are even burying it in the agreement, that if you are late on your Home Depot payment, your Mastercard and Visa cards can raise their rates on you , too, even though you have been paying them on time.

 

I'm wondering if that applies to balances you transfer from a card because of high interest due to late payments.

 

Quote: Many suggestions posted here I have tried. I personally think the best may be to take out a home equity loan if you have one, and go that route. If you file itemized, its tax deductible. ( You did spend some of it repairing your house, right? )
I agree. Best to get rid of that card that is robbing you and NOT replace it with another that can rob you. If you want a card, get one that charges a small yearly fee and does not offer a payment option, a card where the entire balance is due each month - that will keep you out of trouble. Good luck.
Dono

 

Check the fine print for transfering balances, some company's will sock it to ya if you don't pay it off within a couple of months.

 

Yep, Better believe it. Why do you think you receive all those offers in the mail, to transfer your balance to a new card, phone marketers, and their nightly calls, and email guzzlers that spam your email accoints wanting you to transfer? Because they benefit more than you.

 

You keep getting offers because they want your money. Plain and simple, you run your balance up, the interest gets high enough that you make your minimum payment and then they love you as you pay and pay and pay. I would grab the 0 percent and work on paying it down as quick as possible. Then if the rate goes up look for another. Changing your cards will not lower your credit. Late payments and high balances will though.

 

Did The home equity loan to get rid of the balance on the cards. We had Discover, Cap One, Home Depot and Sears. About 8K on all four. After paying them off, we did twhat we should have done years ago.....CANCEL THE ACCOUNTS!!!!
The only card now is Cap One @ 4.00%.
If you cant pay for the purchase at the end of the month, then you can't afford the card!!!

 

On the home equity idea, sounds attactive but..... Wouldn't the closing costs on top of the interest charged on top of the 3K owed initally cancel out any benefit? Also it occurrs to me any interest paid does not come back at tax time. Yeah you get to deduct it from your income but that's pre tax. For example (with round made up numbers) say $100 interest paid over the year. After figureing the return I don't get the $100 back. I get the tax on the hundred back. IOW. in a 28% bracket I get $28 back. Am I wrong here?

 

Sounds about right to me. That's why (if you're only talking about 3k), I would go for the 0% and pay off as much as I could, as fast as I could. If you are paying 150.00/month now at 24%...how much of that is interest? If you take the same 150.00 and put it on a 0%...how much of that is interest.....like they say..do the math.