Here’s the deal: I am very low on money. I’ve got bills coming out of my ass, and not enough income. I’m in the process of trying to get a second job, but it’s not like it will happen tomorrow…and even on the off chance it does, it could still be weeks before I get a paycheck from it. It’s so bad that I’m filing out the forms to have my student loans deferred because I qualify for the economic hardship deferment. And being that I am obviously horrible with money (how else could I have gotten myself in this mess? (well, two former douchebag roommates that owe me over $1000 in back rent and a former landlord owing me over $1000 in back security deposit also helps the situation…)) I have a credit card with some debt on it. Not as bad as those debt reduction commercials advertise, I’m still below $2,000 (I did make at least one smart move when I got it, and gave myself a small credit line.)
But I made the mistake of missing a payment at one point (due to moving and mail not getting forwarded on time and my bank taking over a WEEK for an online payment to go through. WTF is that shit? I can send a check myself faster than that so what’s the point?) So that was all the excuse they needed to jack up my APR to over 20%. Now I’m thinking it might be smart to get a new card, because they all seem to advertise 0% APR on balance transfers for at least a few months. On the other hand…is that a good idea?
I figure I would immediately destroy the card, because it’s sole purpose would be to NOT have a large APR on my existing balance. I would keep the old one for emergencies (I don’t even carry it around in my wallet.) So if that IS a good idea, what’s a good card to get? I currently have an Amazon Visa, so at least I can get a whopping $25 gift card every now and then ( :rolleyes: ), but I know pretty much every card now has some kind of bonus. Discover has “cashback”, which from what I understand is basically the same as my Amazon Visa, but it’s money directly to me, not in the form of a gift card to Amazon.
I don’t think you will be able to qualify for the 0% now that you’ve had a late payment. The best advice I can think of is: if you’re in a hole that’s over your head, it’s time to stop digging. You may want to contact a credit counseling service like Consumer Credit Counseling. They help you learn to budget, and can get the interest on your existing debt lowered or even no interest. I’m speaking from some experience here; I lost my home 7 years ago when I became unemployed and couldn’t find another job that paid as well as my old one.
Well I’m certainly not doing that. I’ve been trying to save money, but with $450 in rent every month, $210* for a car payment, $100 for insurance, $650 for student loans (hopefully I can at least get those to go away) and over $100 min. payment to the credit card (and we all know that only paying the minimum barely (if at all) reduces the overall balance on the card,) plus food, gas for the car, etc…I’m losing more than I’m making. And like I said, I can’t get a second job right away and starting getting more money in the bank tomorrow, it takes a few weeks, so I’m just trying to do as many small steps as I can hoping they’ll add up to something substantial.
*Before anyone suggests it, no, I can’t sell the car. For one, it was a fucking lemon when I got it, so I paid too much for it and wouldn’t even come CLOSE to paying off the loan if I sold it, and two, it would be impossible for me to get around without it. It would take over an hour to get to work (currently takes ~15 minutes,) and when I get out of work, it’s late at night and the buses aren’t running anymore, so I have to be a fucking mooch and bum rides from coworkers, none of whom live near me. Plus, I am frequently driving down to my parents place ~45 minute away to visit them, help them around the house, etc…
If you’re that close to the edge, getting more debt is a Bad Idea. You may not be able to, anyways. I couldn’t even get an overdraft a few months ago, and that’s seven years after going through similar events (see below).
Check out Dave Ramsey’s advice on getting out of debt. Basically, his steps are:[ol][li]Get current on your bills.[]Build up $1000 as an emergency fund so that you don’t have to borrow any more if some mishap occurs. Do this while making minimum payments on the bills.[]Pay off your debts in order of smallest to largest. (This makes psychological sense since it provides ‘wins’ quickly). Sell things if necessary.[]Start saving 15% for retirement.[]Save 3-6 months’ living expenses.[]Save for college funds for kids, if applicable.[]Pay off the house.[*]Then, you can invest.[/ol]Admittedly, much of the later parts of this list are a long-term plan, but the first three steps are what you should look at. [/li]
I wish I’d known this when I flamed out in debt seven years ago. As it was, I did what is in Ontario known as a ‘consumer proposal’, an orderly repayment of debts. Three years ago, after five years of threadbare struggle, I paid the last of that debt off.
However, I still had problems, because I didn’t build up an emergency fund. I was still short many weeks, and I let myself get into a nasty loop at the payday lender. I eventually got out of that, and have since built up an emergency find to keep from borrowing.
If I’d heard about Dave Ramsey earlier than last Christmas, it would have made a difference.
Okay. If you can get another card and transfer your existing card to it for little or no interest, do so.
Do NOT close the old account. You need “old” accounts on your credit report to boost your rating. DO stick it in a drawer somewhere and don’t use it. The fact that it has a high APR does not affect your rating.
$100 minimum on <$2000 debt seems high. If nothing else, contact the cc company to see about getting that reduced. Ask about reducing the APR as well. Some will do it simply because you ask if there’s nothing besides a single late or missed payment.
<Back to derail>
If you’re not sure that you can use it only for the stated purpose of transfering the balance to take advantage of the lower rate, don’t do it.
Getting another credit card will solve nothing until you discipline yourself first, last and always. Time for a severe accounting of all your income and expenses.
This may well be violating board rules, but heck. Live dangerously.
CC issuers are absolute whores. They will offer 0% to Anyone. On. Their. Mailing. List. Personal experience speaking, I right now have 9 credit cards. No fees, and I’d have a lot more if I felt more often inclined to fill out their stupid “pre-approved” forms with whatever financial fantasy that amused me that day. This does have a practical side: if you’re paying attention, you can jump your account around several different issuers depending on who’s offering the best “promotional” rate.
BEWARE!: there is often a % fee for transferring balances, so you need to work this in when calculating your actual interest rate paid. It’s not zero, but I have NEVER paid over 9%, on a real basis, and usually a lot less. Beats 19.99%, or 27.99%, or whatever they’re charging these days.
YMMV, and good luck!
In terms of your student loans, have you consolidated them? If not, talk to your student loan company about consolidating. You might increase your payoff time but decrease your monthly payment, and you can always make extra payments when you’re in a better position.
That said, if you have already consolidated, then the hardship deferment is the way to go. Take what you’re not paying there and put everything you can toward paying off other debt, seriously.
I would not get another credit card if I were you. I think that, despite saying it would be destroyed that it would get stuck in a drawer and then “emergencies” would come up - and I say this as someone who’s done this and am once again kicking my debt load down.
Mathematically, that makes sense, but we’re talking psychology here. Paying off small ones fist gives you successes early and makes it more likely that you’ll keep going.
One late payment and they jack your interest rate up?
I made a late payment once (just because I was absent minded). They charged me like a $30 late fee. I called them up (it took me forever to talk to a real person. GRRR!) basically told them “my bad and I’m sorry” They in turn waived the late fee with out much fuss at all.
I wasn’t even aware that they are allowed to raise your interest rate. Isn’t all that stuff under contract? :dubious:
Most credit card contracts say something like “From time to time we may alter the interest rate and will notify you of these changes”. In other words, they can do what the hell they like.
For ages I wasn’t paying attention to my credit cards, and was coasting along paying off the minimum on one of them. When I actually bothered to read the statements I was astonished to find that the rate had been increased from 14.9% to 24.9%. That was one of the things that spurred me into getting my finances into order.
I applied for a new card with a 0% balance transfer offer. I have now paid off half the balance that I was paying 24.9% on, and the rest is on 0%. It’s saving me something like £80 a month. :eek:
I second getting a new 0% card. You can save a lot of money that way especially if your interest rate is high. FYI in my experience most “reward” cards like Amazon and United etc. tend to charge higher interest rates in general and be less flexible about late payments. If your other credit is good, one late payment shouldn’t make a difference when applying. I once had** loads ** of credit card debt but after transferring to cards with 0% I’m free and clear now. Yay me! But you have to be disciplined.
And start getting tough with the people who owe you money - there’s enough there to pay off your credit card debt!
Well I am in the middle of suing them, so I’d say that’s pretty tough. But it’s a long process. Currently waiting on a court date.
And I just did one quick online application (I didn’t accept it, just wanted ot see what it would tell me) and Discover didn’t give me the 0% transfer, but it did offer 3.9%. I’ll try a couple more to see if I can get a 0.
And like I said, I’m not even going to throw this card in the back of a desk drawer “for emergencies,” I’m going to cut it into pieces and throw it away so I KNOW I’ll never use it. Well…that might be too harsh, maybe I’ll just give it to my parents to hang on it.
We’re almost done with Baby Step 2 of Dave Ramsey’s plan. You pay off the lowest amount first, regardless of interest rate, because that gives you the quickest Attaboy! Being debt free isn’t just mathematical…it’s psychological. It’s learning how to think differently about money.
bouv, are you sure you can’t get a second job? Even delivering pizzas a couple of nights a week will go a long way toward getting a jump on this. Getting another credit card is just moving the deck chairs around…you’re not really attacking anything.
I think bouv is saying that he/she can’t expect to get a second job and have the commensurate paycheck right away, not that a second job is impossible.
If disciplined, moving debt from a higher to a lower rate of interest is a little more than rearranging deckchairs, but it does carry certain risks.
I’ll add that this is not just about thinking; it’s also about the emotional aspect.
When I was in debt and broke, I would buy lottery tickets. I was hoping to be rescued. Now, I didn’t buy a lot of lottery tickets, because the disappointment when I didn’t win was crushing.
After I paid off my debt, I found that I’m not interested in lottery tickets any more. I had rescued myself.
The other thing you can do is call and ask them to lower the interest rate. The worst they can do is say no, the worst you can do is cancel the card, which you were going to do anyway.
Yes, call them and tell them you’re looking at an offer for 0% and see what the first card will do. DO NOT close this account. It is established credit history that helps you the longer you have it open. Frankly, I’d try that first before I applied for another card.
The most important thing about the teaser rates (the 0% rate things) are how long they last, if they charge a percentage to transfer, and if there is a fee to transfer, and what the rate is when the intro period is done.
Can you raise deductibles on your insurance and lower your premium?
