Consumer Debt Sucks

28Aug08

Yeah, thats all I’ve got in me for a title this morning. Its true though, it really does. Mine stacks up in the form of plane tickets, premium denim and pretty dresses. Even scarier, I remember when I opened those cards, not long ago, and instead of a $20,000 limit, it was $2000. How they jump from two to twenty in as many years as I can count on one hand is beyond me. Oh, the college years. 

Anyway…over at Budgets are Sexy, J is talking about a buddy of his who had a hefty amount of credit card debt which his special lady inspired him to get rid of (this rings true with me, but in my case, its my boyfriend who reminds me that it is ridiculous to be paying finance charges). J gives some tips for where to start this debt elimination process (staring with: don’t add to it!) and it inspired me to do a little double checking on where my finance charges are.

Most of my debt sits on two cards, and I have a third card with nothing on it (is that okay to do? have a card around with nothing on it? or is that ultimately a bad move for my credit score?) Card #1 holds 3/4 of my debt and has a finance charge of 12.3% – Card #2 holds the last 1/4 and has a finance charge of 13.99% (which, totally surprised me) – I just got a promo for the third card, 4.9% interest rate on balance transfers, so I think it would behoove me to move what I can from card #2 to that card and then work on getting card #2 out of the picture. Seems to me like a good strategy…but what about those interest rates? Y’all think I can negotiate those?


Filed under: consumer debt, goals, money   |  5 Comments

5 Responses to “Consumer Debt Sucks”  

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  1. 1 J. Money on August 28, 2008 said:

    Hey! thx for linking :) And i’m glad you’re thinking about a game plan! i’d totally call each of them and just ask to have it lowered and see what happens, usually they’ll at LEAST drop it 1 pt or so.

    And for the 4.9% xfer, hell yeah i’d do it! just make sure to check about the actual xfer fee (sometimes it’s $0, but mostly it’s like 3% of the total amount being charged up to liek $75 or something). It would be worth it if it’s good for an entire year too! then you can xfer again and so forth – just be sure to NEVER make a payment or they’ll hit you with the higher rate (do you know what that is btw?)

    As for having more cards open with nothing on it, it’s actually HELPS your credit! The more credit you have open, and the less amounts you have on them total, the better you look :) So those old $2k limits that are now $20k is GREAT for you! it makes the amount you owe compared to your open credit better sexier than before – as long as you’re not using more of that credit now.

    so yeah, sorry this is so long….word vomit, ya know?

  2. 2 savingcent on August 28, 2008 said:

    To never make a payment??? Do you mean never make a late payment?

  3. 3 FruGal on August 29, 2008 said:

    The more credit you have available to you certainly does help your credit rating, as J says. I also find it handy to have an empty credit card at my disposal, so that if I have an emergency and am short on cash I can use the credit card and then pay it off as soon as I get paid so that I don’t get charged interest.

  4. 4 budgets are sexy on August 29, 2008 said:

    @savingcent – oops! yup, a LATE payment. wow, that really came off bad eh ;)
    @Frugal – agreed 100%. helps divide things up a bit too.

  5. 5 savingcent on August 29, 2008 said:

    Thanks for the tips :)


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