Post #155,100
5/13/04 11:01:35 PM
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Credit Card payoff
A while ago my wife ran up some serious CC bills. Serious would be an understatement. They were HUGE. $20K huge. She was pissed off at me, and went a little crazy. She was handling the bills, so she buried them, paying minimums (sometimes), juggling funds, etc.
I discovered it went they were way past due, having gone to collections.
So I tool over the finances, and started juggling as well. But my juggling included talking to the CC collection agency. They tried to get me to take additional loans, secured by my house, and offered a 66% payoff, ie: I pay them 66% and they wipe the rest. I refused, figuring it would be better to deal with it without my house being on the line. We worked out a short term low payment plan, to be renegotiated in 6 months when I freed up some funds to pay more.
After 2 months of small payments, they called me back. They offered a 33% payoff. WOW! How can you refuse that? So I juggled a bit more, and payed it off. The only downisde is the forgiven amount is taxable income. But well worth it.
So keep this in mind. If you get in too deep, stick to your guns. Don't ignore them, and continue a good faith effort to pay what you can. After a bit, you can renegotiate a huge savings.
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Post #155,101
5/13/04 11:22:21 PM
5/13/04 11:23:49 PM
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FYI, you should know this.
If you purchase a large ticket item at 0% interest, then DO NOT purchase additional items later for non 0% interest.
Don't do what I did...
Purchased 1st computer 0%. ( 12 month plan )
Purchased 2nd computer 0%. ( 18 month plan )
Purchased 3rd computer 0%. ( 18 month plan )
Purchased $250 worth of stuff. (no plan)
Now the credit card company is applying my $100 a month payments against the large 0% purchases and continues to charge my account at 15.9% APR interest each month for the $250 of "other stuff".
So, I've got to pay off all this stuff much more quickly than 12-18 months, because the $3.30 a month for the $250 is going to cost me a fortune. And my guess is that they will probably bump the interest rate later, too.
Stupid! Stupid! Stupid!
Do I pay the entire balance off from savings? Or just suffer for a while?
Glen Austin
Edited by gdaustin
May 13, 2004, 11:23:49 PM EDT
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Post #155,103
5/13/04 11:57:56 PM
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Ask yourself this.
Are you making more with the money in savings than you lose in interest payments?
If the answer is yes, then pay it off over the long run. If not, pay it off all up front.
Tired of lying in the sunshine staying home to watch the rain.
You are young and life is long and there is time to kill today.
And then one day you find ten years have got behind you.
No one told you when to run, you missed the starting gun.
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Post #155,311
5/15/04 12:42:06 PM
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Another dip into Savings...
We're going to pay it off with savings, but after this, we don't have much left.
The interest is lower on savings than on the debt.
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Post #155,343
5/15/04 10:05:40 PM
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You're better off in the long run that way.
It doesn't make it feel any better, I know, but it either saves or makes you money long-term, depending on how you look at it.
-YendorMike
[link|http://www.hope-ride.org/|http://www.hope-ride.org/]
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Post #155,370
5/16/04 3:05:41 AM
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Not necessarily
There is a definite value in maintaining a fixed cash cushion as an "insurance policy". If you don't need it, you lose the opportunity cost. If you do need it, it is invaluable.
Cheers,
Ben
To deny the indirect purchaser, who in this case is the ultimate purchaser, the right to seek relief from unlawful conduct, would essentially remove the word consumer from the Consumer Protection Act
- [link|http://www.techworld.com/opsys/news/index.cfm?NewsID=1246&Page=1&pagePos=20|Nebraska Supreme Court]
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Post #155,381
5/16/04 9:33:53 AM
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True 'nuff.
Speaking as someone who hasn't had that cushion in years, it's just normal for me not to think of it, really.
-YendorMike
[link|http://www.hope-ride.org/|http://www.hope-ride.org/]
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Post #155,133
5/14/04 10:04:17 AM
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Another gotcha
Bought some furniture for 0% / 6 months. Five months in, called and paid over the phone so there would be no question about whether they received the check. Two months later got a statement for the several hundred dollars in interest I owed. WTF?
The phone payment cost $5. Instead of taking a payment of the total payoff amount plus the $5 as I asked them to, they took payment for the furniture only and left $5 on the account. And said I now owed the back interest. I'm still fighting with them. Twice I've called and had people on the phone tell me they'd remove the interest charge and I could just pay the $5, and twice I've gotten bills that still have the several hundred.
===
Implicitly condoning stupidity since 2001.
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