Balance transfer on credit card to save interest?

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iDude
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Re: Balance transfer on credit card to save interest?

Postby iDude » Sun Mar 10, 2013 8:54 am

I wanted to post an update here, and mid-stream thank everyone here who has inspired me to get this far and beyond...

Yesterday I sent off the payments that zero out one credit card, and pull the balance on the other down to what it was early last year. In other words, one of my two credit cards is done, hitting the milestone that I set middle of last year. :rock: And even better, on the other card instead of 12.9% interest, I'm paying 7.9% on $4K of it and 0% on the rest (and should be able to pay of "the rest" before it resumes 7.9% next February). My credit rating is climbing, so next I'm going to look at refinancing my current 6.5% car loan to something that'll probably be under 2%.

One thing that has factored heavily for me so far that I don't generally see in the discussion of debt paydown strategies, is that getting a little breathing room on existing credit can open up options to renegotiate or refinance interest rates on the rest of it, and in that way further accelerate the snowballing. In my case it has gotten my monthly credit card interest payments from about $400/mo to $25/mo with only about 40% of the actual credit card debt actually paid off so far.

Mario
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Re: Balance transfer on credit card to save interest?

Postby Mario » Wed Apr 03, 2013 2:00 pm

Nicely done. Congrats man
http://debtblag.com

Track my fiscal fitness with $0.5 million in debt: http://getrichslowly.org/forum/viewtopic.php?f=11&t=61052 Latest update: As of April 16, I've paid off $21,400 in credit card debt this year (after starting with $35k)

iDude
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Re: Balance transfer on credit card to save interest?

Postby iDude » Tue Apr 01, 2014 1:10 pm

Another quick update. Late last year I refinanced the car loan from 4.9% (dealership) down to 2.75% (credit union), with no fees. 8) This morning I sent in the payment that will zero out my total credit card balance, bringing my credit utilization to 0.0%. :rock: So, milestone #2 reached, and milestone #3 is zeroing out the (current $14K) car loan balance.

Now, a(nother) question. CreditKarma (so, TransUnion) gives me a credit rating of 763 currently (with a current credit utilization of 6% by the way, the payment hasn't been processed yet). I have A scores other than "number of accounts", where with five open and seven closed accounts they're giving me a C. I'm not opening accounts just for the sake of raising my credit rating, but what else would be dropping me down from 850? The mortgage and car loan balances?

alohabear
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Re: Balance transfer on credit card to save interest?

Postby alohabear » Tue Apr 01, 2014 1:33 pm

iDude wrote:Now, a(nother) question. CreditKarma (so, TransUnion) gives me a credit rating of 763 currently (with a current credit utilization of 6% by the way, the payment hasn't been processed yet). I have A scores other than "number of accounts", where with five open and seven closed accounts they're giving me a C. I'm not opening accounts just for the sake of raising my credit rating, but what else would be dropping me down from 850? The mortgage and car loan balances?


Could be the loan balances. Or, it could just be time. How old is your oldest account, and what's the average age of all your accounts? My understanding is this also affects you credit score.

iDude
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Re: Balance transfer on credit card to save interest?

Postby iDude » Wed Apr 02, 2014 3:01 am

alohabear wrote:Could be the loan balances. Or, it could just be time. How old is your oldest account, and what's the average age of all your accounts? My understanding is this also affects you credit score.


Oldest is 24yrs, average is 11yrs. They give me an "A" for that. :geek:


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