Credit Card ??? I'm dumb.

[thebanich]

So in my younger and dumber years (right before I left for college) my mom told me to get a credit card with a very low limit to start building my credit (LOLOLOL) so I did and I was smart with it for a little while. Then right before I graduated college (apparently it made me more inept) I got another credit card with a higher limit and had both. I wasn't carrying a balance on it either until grad school. Then I paid for one semester on the card because I had a job and should have paid it off in 3 months. Then my life went up in flames and I quit the job (and the program) and had almost $3,000 just sitting on a not low interest card.

Here I am 5 years later and I still have a pretty nasty balance sitting on one of the cards and a low one on the other. I've finally gotten my credit out of the shitter but one card has a 15% interest rate and the other has a 12% rate. No rewards and I never actually use the cards. I'm just trying to pay them off and I'm failing.

My bank is currently offering a balance transfer (no fee) with 3% for a year and then the lowest rate you can get is (9.99%) on the travel rewards card. I can't figure out if its worth it. I really want to get out from underneath Capital One's stupid thumb but I'm not sure what rate I would qualify for with the new card.

Any advice?  (Also, if you have a time machine I would really like to go back to 5.5 years ago and kick myself in the shin)

[kbmama]

I would apply and see what interest rate you get. If it is higher than 12% and you don't anticipate paying a significant amount off in the 3% year, it doesn't make sense. If you decide against the bank's offer, you may want to transfer the balance from the 15% card to the 12% card though, unless they charge a fee for such transaction.

[Deleted]

In your case, I'd worry less about the rewards and more about getting the lowest possible interest rate while limiting balance transfer fees. But before you do anything, run a few calculations here: www.bankrate.com/calculators/credit-cards/credit-card-payoff-calculator.aspx

First see how long it will take you to pay off your current cards at their current rates and balances. And then run a couple hypotheticals with the potential new interest rates. You don't want to set yourself up for failure - find a payment that is actually doable and yet one that pays down the ccs in the fastest amount of time.

[Deleted]

Also, don't beat yourself up. I was in your same boat for years - I carried high balances on credit cards even when I knew better. It's a hard habit to break. Step one is stopping the use of credit cards. Step two is working out a budget that covers your monthly living expenses, unexpected items and also makes progress on paying down the cards. That's REALLY a difficult thing to do, but you can get there.

[thebanich]

Jan 20, 2015 9:42:48 GMT -5 @bruxannie said:

In your case, I'd worry less about the rewards and more about getting the lowest possible interest rate while limiting balance transfer fees. But before you do anything, run a few calculations here: www.bankrate.com/calculators/credit-cards/credit-card-payoff-calculator.aspx

First see how long it will take you to pay off your current cards at their current rates and balances. And then run a couple hypotheticals with the potential new interest rates. You don't want to set yourself up for failure - find a payment that is actually doable and yet one that pays down the ccs in the fastest amount of time.

The bank has another card that could potentially drop the rate another percentage point but that is all. I've looked around for other better options and there isn't anything I could find in the way of lower rates.

I don't use them at all. I haven't for about 3 or 4 years. I don't even have the actual cards. I really wish there was a way to determine how much my rate would be before actually applying for it.

[Deleted]

Would you be able to get one of those cards with a 0% intro rate for 12-18 months? I don't know what your credit is if you would able to but when I was in college I got myself into about $10,000 in credit card debt. I opened a card that had an intro rate of 0% for 18 months and transferred all the balances to it (there was a small fee but worth it for the 0%) then I figured out how much o had to pay to have it paid off before the intro rate disappeared and I did that. I was living at home still so I was able to put the majority of my pay towards that debt.

I would say transferring to the lowest rate possible is probably your best option and then do a budget to see how much you can pay each month and how long it will take you.

[socomama]

Can you find a card with an introductory 0% interest on balance transfers? Suck it up and pay the fee for your high balance card, but then make it up with a year of interest free payments. I don't know how much your balance is, but it may be worth it. In that time, focus on getting your other card completely paid off and pay as much to the balance transfer as you can afford to.

[thebanich]

Jan 20, 2015 10:09:01 GMT -5 @acesup said:

Would you be able to get one of those cards with a 0% intro rate for 12-18 months? I don't know what your credit is if you would able to but when I was in college I got myself into about $10,000 in credit card debt. I opened a card that had an intro rate of 0% for 18 months and transferred all the balances to it (there was a small fee but worth it for the 0%) then I figured out how much o had to pay to have it paid off before the intro rate disappeared and I did that. I was living at home still so I was able to put the majority of my pay towards that debt.

I would say transferring to the lowest rate possible is probably your best option and then do a budget to see how much you can pay each month and how long it will take you.

I think there are a few with 15 months intro rates but I don't think I could pay off the one high balance in that amount of time and this I'd be right back where I am with a high(ish) interest rate. It is a thought though... I may just have to wait to do that until DH gets his raise this fall. Then I could afford to do the higher payment and get rid of the debt in that amount of time.

[thebanich]

CREDIT CARDS AND COLLEGE STUDENTS DO NOT MIX.

Unless your a smart student who is open and honest with your parents about being in financial trouble.

[HelloSweetie]

Jan 20, 2015 10:16:44 GMT -5 thebanich said:

CREDIT CARDS AND COLLEGE STUDENTS DO NOT MIX.

Unless your a smart student who is open and honest with your parents about being in financial trouble.

Truth. I had a low limit to buy books and pay off each quarter and then I decided to quit my summer job and raised my credit limit to cover me until my school job started again. Then I lost my roommate and had to keep using it for rent. Then I lost my job and who knows what else I had to put on it until I got another one. This was over the course of a few years but it added up. We paid it off before we got married but it's slowly climbed back up and we carry a low balance again.

[ghostmonkey]

Jan 20, 2015 10:15:22 GMT -5 thebanich said:

Jan 20, 2015 10:09:01 GMT -5 @acesup said:

Would you be able to get one of those cards with a 0% intro rate for 12-18 months? I don't know what your credit is if you would able to but when I was in college I got myself into about $10,000 in credit card debt. I opened a card that had an intro rate of 0% for 18 months and transferred all the balances to it (there was a small fee but worth it for the 0%) then I figured out how much o had to pay to have it paid off before the intro rate disappeared and I did that. I was living at home still so I was able to put the majority of my pay towards that debt.

I would say transferring to the lowest rate possible is probably your best option and then do a budget to see how much you can pay each month and how long it will take you.

I think there are a few with 15 months intro rates but I don't think I could pay off the one high balance in that amount of time and this I'd be right back where I am with a high(ish) interest rate. It is a thought though... I may just have to wait to do that until DH gets his raise this fall. Then I could afford to do the higher payment and get rid of the debt in that amount of time.

Have you looked at getting a loan? Even unsecured, it's generally a lower rate than the credit cards because you cannot make additional purchases and it has a set payoff date. 

Have you called the credit card company at all and tried to negotiate a lower rate? 

[thebanich]

Jan 20, 2015 11:06:37 GMT -5 ghostmonkey said:

Jan 20, 2015 10:15:22 GMT -5 thebanich said:

I think there are a few with 15 months intro rates but I don't think I could pay off the one high balance in that amount of time and this I'd be right back where I am with a high(ish) interest rate. It is a thought though... I may just have to wait to do that until DH gets his raise this fall. Then I could afford to do the higher payment and get rid of the debt in that amount of time.

Have you looked at getting a loan? Even unsecured, it's generally a lower rate than the credit cards because you cannot make additional purchases and it has a set payoff date. 

Have you called the credit card company at all and tried to negotiate a lower rate? 

I haven't done either of these things but will look into the loan. And possibly grow a pair and call. I hate talking to people.

[davidbowiesbulge]

I work for a bank and agree with the other posts about going with a loan. The big thing is the fixed rate. I would look around to see who has the lowest APRS and see what type of fees they may have. Most banks have all their numbers online so you don't have to worry about make many calls.

[Deleted]

Don't really have advice to add but wanted to let you know I did the same dumb college student credit card thing you did. Free sub for filling out application was a no brainer!

Most expensive meal of my life in the end.

[thebanich]

Thanks guys. I really appreciate your input. I'll look into all suggestions and talk to DH.


Now if I could just get the student loans to fuck off....

[sunnysideup26]

I agree with trying to get a loan. We did this a few years ago and got a really low interest rate through our bank. If I remember correctly it was around 2%. The interest rate on the credit card was really high, so it worked out well to pay off the whole credit card at once and then have the payments on the loan set up through the bank. Good luck! I hope it works out!

[bakingbetty]

Been there, done that and thankfully, came out on the other side... you can, too!

Def agree with the others above me to ask your bank about a loan - you can put up a car as collateral if you absolutely have to, which means they will take a lien against your vehicle and could reposes it and sell it to pay themselves back IF you default on your loan. Scary? Yes. But if you have steady jobs and live within your means, this shouldn't be a huge risk for you. Just a thought that a girlfriend told me they recently did to get ontop of their CC debt.

We xferred CC balances from high-interest cards to a lower interest card and it made a whopping difference in how quickly we paid our debt off a few years ago. I say this is a great option for you, even if the intro rate of 3% runs out, the life of the card is still only 9.99% and that's significantly lower than your current 12 and 15%.

Best of luck!!!