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Discussion Starter #1
Hey all,

Have a question to pose. As with many other Americans, we of course have some credit card debt. Probably a little too much. Well, we are working to pay this sucker off once and for all.

We have the opportunity to put more than 50% of our debt onto a card that offers 0% interest for the first 12 months. The rest of our debt is currently at an average of 6-7% which is not bad considering we have consolidated a few times with promotional rates that are held until paid off.

Would you take this offer up and pay as much as possible on the card that would still have the interest? Or, would you pay as much as possible on the card with no interest?

I think with the best case scenario I could get another card approved for 0% interest for the balance of our debt and pay as much we possibly could in the next 12 months and then be back at the 6-7%.

What do you guys think? We pay much more than the minimum on our 1 credit card and will continue to do so. I have figured a couple things out and going the 0% interest rate with the 50%+ side of my debt could in the end save me about $1000.

What would you do.
 

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I would take that and pay as much as you can toward what ever CC has the interest while paying the minimum on the 0% card. It just makes more sense from an economic standpoint. Any time you can avoid interest, it's a good thing. The CC company that is willing to acquire part of your debt is actually HOPING you will do that so they can make a profit, too and retain you asa future customer; in turn making even more of a profit. Take advantage of that for now.

What is the rate of the 0% introductory rate card AFTER the first 12 months?
 

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You should always put the lion's share towards the highest interest. In the long run this will save you the most... Get a loan calculator - I like to use wheatwords loan spread calculator. That way you can see the interest you are paying over the course of any loan and balance it against others....
 

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How do you like the phrase "Guaranteed return"? You'll guarantee yourself a return of 6-7% if you pay off that debt first.

You actually lose if you pay off debt that's 0% interest since you'll be paying with today's dollars which are worth more than future dollars thanks to inflation.
 

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Do you have an actual *plan* to get rid of the debt? I'm only asking because I think most people say they will pay as much as they can w/o giving a specific number that they will stick to every month. I would really suggest to write a plan down (that you can and will stick to) that gives a start date and a date that it will end. There are lots of web based calculators out there that can help you with computing the interest to get it on paper. Watching the balances fall each month is really a great feeling.

With that said, yes you should move it to a no interest card, but make sure you aren't able or willing to add more debt - your trouble will all be wasted. Get it taken care of. The road to being debt free can be rocky, but it's nowhere near impossible to get it taken care of once and for all. Good luck!
 

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VdubTX, what you're describing is a proven technique for commited people to get out from under credit card and other debt. Just as you might refinance a mortgage for better interest rates or shorter terms, you can literally refinance your credit balances with new creditors offereing better terms, even if only for a short while. Indeed, you will save yourself the cost of 6-7% interest paid on your debt if you do it.

But, you have to do it! Do you see how I mentioned the word "commited" when describing whom this works for? You've got to be there, every month, willing to sign that check or press that 'pay' button online. Planning your budget in line items of obligations, neccessities, and luxuries is an easy way to do it. Debt, rent, the mortgage, utilities... these are obligations. Groceries and gas are neccessities... sometimes hamburger has to replace filet mignon on the shopping list just as taking the bus on occasion saves you some gas. Movie tickets and new CDs are luxuries... have you been buying them on credit?

That's the next step: quit using the credit cards to buy what you cannot otherwise pay cash for. Unless you're getting cash back or major league benefits otherwise, you might not even care to use a credit card. If you do, use it wisely instead of cash with a commitment to pay the balance due every month with the cash you're not laying down for the things you buy.

You'll be stunned at just what you're able to afford once you've fought your way out from under debt. I'm speaking firsthand when I say I've been in your shoes. Commit to being debt free! Eat peanut butter if you have to because it is so worth it on the other side!
 

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I paid all my CC with my student loan reimbursement.... there isn't any credit card with that low interest :lol:
Now insted of paying the CC's I pay more on my mortgage. I will take care of the student loan later, with better job and higher income :)

If I were you I would pay the CC as soon as possible with putting minimum on the interest free card. Of course put as much more as possible on the interest free card too. Anyway, whatever you put on the 0% CC, you pay your dept, the other charges you APR, so the faster you pay them off the less APR you would pay.
If you will not pay the 0% card in 12 months, try to transfer the remaining balance to another 0% card at the 10-11 month.... :)

Remember, when you pay them all off, don’t close them... better use for gas or sth. When you close too many cards at one time, it does not have positive feedback to you credit score. Never close your firs CC card, this one is the most important one.
good luck

:thumbup:
 

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1 key to paying them off is on the ones that you are only paying the minimum, it may go don't over time, but don't lower your payment. If it starts at $100 a month and as you pay it off it drops to $90, keep paying the $100. You are used to the payment and you will pay the debt off faster.
 

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Funny thing, once you stop carrying a balance, you become the credit card companys' SECOND WORST customer (only thing worse is deadbeats who default on their debt or go bankrupt). I have not carried a balance for many years now, over that time all my cards have jacked up my interest rate and increased my annual fee. I have actually been TURNED DOWN for low-interest, no-fee cards because they see my credit report and can tell they're not going to make any money from me.
 

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Discussion Starter #11
91 16V Jetta said:
Do you have an actual *plan* to get rid of the debt?
I do have a plan. I have a set amount that I will pay to the credit cards that is actually close to double the minumum payments would be. I am tracking to get a major bonus in October that will ALL go towards the debt.

We are definitely commited to getting out from under this and have taken all of the correct steps to do that based on everyone's advice. We have stopped putting anything on the card and do not carry it anymore.

Thanks for the advice everyone.
 

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^^Lots of good advice here. Pay the highest interest CC off first, then the next highest, and so on.

If you have no short-term investments capable of making 7% net income annually (and nobody does these days) Put everything you've got into paying off that debt - making the minimum payment is not sufficient. Pay the CC debt until it HURTS. No mods, no eating out, no silk ties, no gold watches, no cable, no dsl. Ramen noodles and tap water are your friends right now.

You can't win with investing, until you are debt free -- the CC debt costs more in interest than your investments will make.

The more paying off the debt hurts, the sooner it will be over. Then you can get on with the better things in life.
 

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No MODS? Now that is going to get painful :cry:
 

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Using debit cards can be a high-risk endevour. Banks are far less responsive to fraud reports. Several friends and family have lost money (hundreds) when someone got their debit number are used it. Credit Cards, while generally evil, do protect you better from fraud. They can also provide extras like rebates, warranties, etc., which if used wisely and paid off every month, can provide benefits without the cost of finance charges.

CYA: read your agreements carefully.
 

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it sounds like you know what you need to do. good luck.
 

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Good Luck. My wife and I had to do this. It goes slow at first, but it gets better as you get near having the cards paid off. It is like total liberation.
 
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