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Edit: doublepost
maskenfreiheit fucked around with this message at 01:41 on Mar 13, 2017 |
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Aug 13, 2011 20:51
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Mtheory fucked around with this message at 07:57 on Mar 27, 2022 |
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Aug 13, 2011 21:57
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Well, if you're that far gone already, what's another $10?  Dang, though, is there a live bankruptcy thread I can change the link to? If not, maybe someone more knowledgeable than me can make one.
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Aug 13, 2011 22:55
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My fiancee and I are trying to pay down all our credit cards, using the "Debt Avalanche" method. One element of our (loosely-conceived) plan is to use these balance transfer checks that our Citi cards keep sending us to take advantage of the 0%APR(3% up front), and have it paid off entirely before the real AR kicks in. The "catch" is that at present, our highest-interest card is... Citi. It occured to me that we should be able to do the following: 1) Use one of the balance transfer checks, and write it out for the amount currently on the Citi card. 2) Deposit it into our checking account 3) Transfer the funds onto our Citi card. It would increase the balance by 3% initially, but it would zap our highest-interest card. Is there a hidden flaw to the plan that I'm not seeing? Some technicality that I've overlooked? Are these checks just a trap, or is it possible to use them responsibly to lower your interest rates while paying off your cards?
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Aug 15, 2011 02:20
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Doc Faustus posted:My fiancee and I are trying to pay down all our credit cards, using the "Debt Avalanche" method. One element of our (loosely-conceived) plan is to use these balance transfer checks that our Citi cards keep sending us to take advantage of the 0%APR(3% up front), and have it paid off entirely before the real AR kicks in. Make sure that a check made out to a person is not treated as a cash advance, but other than that I don't see why it wouldn't work. I know you can't do a "balance transfer" from the same card to a lower interest.
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Aug 15, 2011 02:44
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It's my new favorite forum! I'm 28 years old, and for one reason or another, I've decided to finally start taking more than a passing interest in my personal finances, and possibly start some investing. But first things first, I have a little credit card debt I'd like to pay off. I carry 2 cards, a Citi and an Amex. The Citi I pay off every month because I only use it at places that don't take Amex. The Amex I used to pay off every month, but I currently have about 4k of debt on from some vacations I took earlier this year. I did have about 6k of debt on it, but I've been slowly paying it off. I also have about 10k of savings in a savings account that is earning me pretty much NO interest (I think I've earned about a dollar on it this year.) Is there any reason why I shouldn't take 4k from the savings account and use it to completely pay off my Amex? Once that's done, I plan on keeping about 2k in that account as an emergency savings fund (though I'll probably move it to a savings account with a better interest rate). And then I'll use the other 4k for some kind of investments yet to be determined (stocks, money market accounts, not sure yet - still have lots of reading to do.) Anyone see any problems with this, or have any recommendations? I feel like I've already learned a lot just from poking around this forum, and I haven't yet even picked up any of the recommended books.
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Aug 15, 2011 04:44
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The main "concern" I would have with that plan is if $2K is really enough to cover 3-6 months of expenses for you at 28, but you know better than us how much you spend every month. If you have cheap / free rent and are a budget food shopper it's certainly possible. But unless you have really major expenses or that credit card rate is astonishingly low, I think that the $4K of your savings would be much better served in paying that off than sitting around in a low-yield savings account. If you haven't started saving for retirement, that's definitely where I would begin with your extra money (the excess of whatever you decide you need for emergencies) once the credit card is paid off. Roth IRAs are usually the vehicle of choice, but I would definitely earmark your money for long-term savings rather than short-term growth. The ages between 20 and 30 are really important for starting retirement funds. Edit: And obviously if you're planning to take expensive vacations in the future, better to plan and save up for them rather than put them on a credit card. Credit card debt is just an anchor around your future life!
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Aug 15, 2011 04:56
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Thanks for the advice! As far as retirement savings go, I have a 401k with my employer that I put 5% into each paycheck, and my employer matches 75% of. I also have a 401k from my old job that I never did anything with when I left ~2 years ago, but I'm currently in the process of looking into how to roll that money over into my current 401k. As far as saving for future vacations go, I think there's just a mental hurdle I need to get over. The old me was happier seeing 10k cash money in savings, despite the fact that I had 4+k in debt and was paying 50+ bucks a month in interest. I need to get over that mental security blanket of having sums of money more or less stuffed under my mattress while I keep paying interest every month.
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Aug 15, 2011 05:12
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I'd say pay off the credit cards immediately and start saving more every month to make up for it. Want to give us an idea of your budget?
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Aug 15, 2011 13:13
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OldSenileGuy posted:Thanks for the advice! As far as retirement savings go, I have a 401k with my employer that I put 5% into each paycheck, and my employer matches 75% of. I also have a 401k from my old job that I never did anything with when I left ~2 years ago, but I'm currently in the process of looking into how to roll that money over into my current 401k. I don't think you are saving enough for retirement. You should be aiming for around 10-12% (or more if you can fit it in your budget). Save now and get used to not having that extra money, and it will be much easier down the road. Posting your budget would help us help you a lot more.
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Aug 15, 2011 15:21
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OldSenileGuy posted:I also have about 10k of savings in a savings account that is earning me pretty much NO interest (I think I've earned about a dollar on it this year.) Is there any reason why I shouldn't take 4k from the savings account and use it to completely pay off my Amex? A huge part of getting on the right financial track is just identifying your long-term goals and setting a budget to make sure you're on the right path towards them. This is especially important for retirement, but it's also good to have a clear idea of other big-ticket goals (vacations, a house downpayment, etc) so you can give yourself an incentive to not blow your money on stupid poo poo.
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Aug 15, 2011 17:10
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$90k debt, $115k annual family income. Would you guys recommend purchasing a home ($150-$200k, 20% down) or paying off all debt first?
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Aug 15, 2011 22:53
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Qaz Kwaz posted:$90k debt, $115k annual family income. Would you guys recommend purchasing a home ($150-$200k, 20% down) or paying off all debt first? I'd substantially bring down the debt before considering a house. Use the difference in debt payments then on making your mortgage 15 years rather than 30.
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Aug 16, 2011 00:03
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Qaz Kwaz posted:$90k debt, $115k annual family income. Would you guys recommend purchasing a home ($150-$200k, 20% down) or paying off all debt first? Depends almost entirely on what kind of debt it is and what rate it's at. Student loans at 2%, meh. Credit cards at 29.9%, gently caress yes pay the debt off now.
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Aug 16, 2011 00:47
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I have 3 credit cards: a Visa (limit $500), an Amex (limit $1500) and a Mastercard (limit $1000). I use the Amex for 90% of purchases and the Visa for the other 10% and I don't carry a balance on any of them. Anyways, I recently got an offer from my bank to increase the credit limit on my Visa from $500 to $17500, which is ridiculously high in my opinion considering I'm a recent grad with ~14k in student loans and a job that pays 22/hr. My question is, should I accept this increase? It's not a particularly good card, but that limit increase is much, much more than anywhere else has offered (Amex would only bump me from $1000 to $1500). The biggest purchase I can see myself making in the next couple years is around $2-3000 so I don't really need a limit of that size, but is it a good thing to have a large limit and not use it?
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Aug 16, 2011 01:19
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Based on my understanding, having a large credit limit but not using much of it can help your credit score, but it's really more about your own spending habits and how much you trust yourself. If you think you're a person who would see that credit limit and would be tempted to buy things you usually wouldn't because of it, it's probably better to stick to what you have to remove that lure. But if you don't think you would spend much more with it than you do now, then I personally don't see a problem with it. It can definitely make life easier if you say, saved up for a nice vacation and need credit card room to pre-purchase the package online or something. I personally put almost everything I buy on my credit cards (including monthly parking, rent, medical bills etc) and pay them off every month rather than using checks because that way I get rewards / cash back. But I also know I'm the kind of person who doesn't spend a lot of money, so that's the real litmus test.
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Aug 16, 2011 01:28
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I'm not worried about being tempted to buy a bunch of crap so that's not a problem. If I decide to cancel it later would there be any major downsides? Will having that limit prevent me from getting other lines of credit?
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Aug 16, 2011 01:35
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Freeze posted:My question is, should I accept this increase?
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Aug 16, 2011 01:39
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moana posted:Yes. At the very least, it will probably improve your credit score. At the very most, having lots of credit makes it possible for you to change your identity and escape to Central America after you get brainwashed by the CIA and framed for a murder you didn't commit. I will admit that the thought of immediately taking out a $17500 cash advance and fleeing the country to start a new life did cross my mind.
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Aug 16, 2011 01:44
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Freeze posted:I will admit that the thought of immediately taking out a $17500 cash advance and fleeing the country to start a new life did cross my mind.
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Aug 16, 2011 01:51
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Freeze posted:I will admit that the thought of immediately taking out a $17500 cash advance and fleeing the country to start a new life did cross my mind. That temptation never goes away, my friend.
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Aug 16, 2011 01:58
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Freeze posted:I will admit that the thought of immediately taking out a $17500 cash advance and fleeing the country to start a new life did cross my mind. Me too...
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Aug 16, 2011 02:01
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T0MSERV0 posted:Depends almost entirely on what kind of debt it is and what rate it's at. Student loans at 2%, meh. Credit cards at 29.9%, gently caress yes pay the debt off now. 100% student loans at ~3%. Using a debt snowball calculator we would end up paying everything off at the same time, either getting a house first or clearing debts, then getting a house. The house would have a lower monthly payment, but more maintenance costs. Then again, it might be nice to get a jump start on having a house, with that giving us more motivation to get debt free.
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Aug 16, 2011 02:24
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KennyG posted:Either way you aren't going to be able to refi that car loan anytime soon. You may be ahead just paying down the car loan. As Zeta and many others would comment, it's not the 11% that's killing your finances right now. What is the status of the medical bills? Are they still accuring interest/penalties? The medical bills are just sitting there. I get offers from the collection agencies to pay it off for 75% less and receive a free toaster or something. It's definitely other things killing my finances. I pay one full unemployment check for my health coverage alone, and rent+utilities is 33% of my income. Why would I not be able to refinance that car loan? When the medical bills are paid off wouldn't that change my debt to income ratio enough to get approval?
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Aug 16, 2011 02:51
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Qaz Kwaz posted:100% student loans at ~3%. Using a debt snowball calculator we would end up paying everything off at the same time, either getting a house first or clearing debts, then getting a house. The house would have a lower monthly payment, but more maintenance costs. Then again, it might be nice to get a jump start on having a house, with that giving us more motivation to get debt free.
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Aug 16, 2011 03:24
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Red Monkey posted:The medical bills are just sitting there. I get offers from the collection agencies to pay it off for 75% less and receive a free toaster or something. What does it mean that you are getting back $3000 from your school loans? Is this your money or is it that your student loans were for $3000 more than the school needed? If it was the latter, I don't think it is smart to borrow it and like most people take upwards of 10 years or more to pay it back. It is just way to easy to go through 3 grand. Assuming it is actually your money, since you are unemployed, I would hang on to it. If you wanted to use $300 or $400 to settle the medical debt and still have $2700 left over, that's cool, but it would also be fine to wait until you are employed to settle it. I would not pay off the medical bills with the plan that it will improve your credit or debt to income ratio enough to be approved for a loan refinance. It is next to impossible to be approved for anything when you are unemployed (unless you got a cosigner and that opens up another  )What is the car worth? The quick answer is to sell it and get something way cheaper. That said, you will have an emergency fund, and it sounds like even without it, you were treading water. You don't need to sell it tomorrow, but if in a few months you are still unemployed and you are using chunks of the money to live, you need to consider it.
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Aug 16, 2011 04:35
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TheShineNSB posted:This might be a good question to ask the people in this thread. Yeah. Since I'm all about learning from each others mistakes, learn from mine. I wasn't entirely debt free when I bought 3 years ago. First winter was awful. I had this enormous clunking oil furnace and it barely made it. My plan was to save up for it. Instead I had to borrow $15000 of the $20000 it took. I have been skimping for the last 2 years and finally was debt free until the last couple weeks. But in April my cat needed surgery that cost $1000. In May I had to put $500 in my car and I needed a new kitchen sink and the bathroom drain clogged. That was another $500. Then in June I had to to $1200 in emergency repairs to my sagging porch. Days after that a pipe corroded and I had raw sewage pouring in my basement. Then a hot water heater broke. I was able to have the plumber fix both things at the same time, but that was another $2300. Meanwhile my fridge has been having problems but I was hoping it would hang on until I could clean up the mess over the last 4 months. It couldn't. I came back from a weekend away to a fridge full of spoiled food. I had to stuff it with dry ice and go back into credit card debt to get a new fridge. Granted my house is about 120 years old so more can go wrong, but still, life is so much easier when you can just write a check and make a problem go away. It is a good thing for my cat that she got sick in April when the emergency fund was still looking pretty.
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Aug 16, 2011 04:51
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Zeta Taskforce posted:What does it mean that you are getting back $3000 from your school loans? Is this your money or is it that your student loans were for $3000 more than the school needed? If it was the latter, I don't think it is smart to borrow it and like most people take upwards of 10 years or more to pay it back. It is just way to easy to go through 3 grand. The $3k is an extra amount I took to live off of. Unemployment runs out in Jan and my job outlook is fairly grim. Since it is borrowed money, what do you recommend to be done with it? The car is worth $9k, and my ex is already signed onto with me. She wants her name off of it yesterday. I explained to the lender that I, and I alone, had been paying it consistently the past 2 years. I did this in hopes they would take her off of the loan, but they said the only option is to refinance. If I sell the car, does the buyer just take over the loan?
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Aug 16, 2011 05:40
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Red Monkey posted:The $3k is an extra amount I took to live off of. Unemployment runs out in Jan and my job outlook is fairly grim. Since it is borrowed money, what do you recommend to be done with it? Take over the loan, probably not. More likely he would get his own loan (or just pay for it or whatever) and you would still be on the hook for the original loan amount less whatever you sell the car for. In this case, if the loan is worth 9500 and the car is worth 9000, he'd give your bank a check for 9000 (either his money or via a loan on his end) and you'd give them a check for 500 or sign a new loan for the remainder. The bank would need all their money before they'd release the title, so the process would involve more hassle then if you owned the car free and clear, but it's not a huge deal. The catch here is that depending on your credit and the delta between the car value and the loan amount, you may need to come up with the cash for the difference. If the difference was thousands of dollars and you had good credit, you could probably talk the bank into a signature loan for the amount. If the difference is less than 1000 bucks and your credit is bad, they may want their money up front. The fact of the matter is that the bank already kind of has a signature loan for the amount that you'll be asking for, because if the car loan is worth more then the car it's not like the collateral covers that amount of money anyway - if you can make them see that they're not really changing their position, you might be able to talk them into the new loan. If you're serious about selling the car, the first thing you should do is go talk to the bank and find out how much they'll be willing to work with you on selling it. If you need to pay the difference in cash yourself and want to get out from under this car, then it sounds like the student loan money would serve you here and improve your cash flow. Keep what you need in cash to pay the loan remainder, and then go get yourself a $1000-$1500 beater and buy it outright. Then take the money that would have been your car payment and don't spend it on stupid poo poo - fix your other credit issues, pay the student loan back, whatever. T0MSERV0 fucked around with this message at 12:35 on Aug 16, 2011 |
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Aug 16, 2011 12:32
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T0MSERV0 is spot on about the logistics of how to sell the car and how they won't just transfer liability for the note. I just don't like the idea of you taking the student loan money to live on. It's not a question of morality, if that's the only way you can eat I understand. We can still be friends whatever you decide to do. I know you feel cornered and having this money would be a short term relief. But what I don't like is how long it takes to pay it back, that it is not bankruptable if the worst happens, and it will just be another burden. That said, if you need to use $500 to get out from this car and use some of the rest to buy a cheap car, that is a no brainer. It is worth trading a couple thousand in student loan debt to get out of $9500 in car loan debt. If you don't have this payment anymore it should be easier to eat and keep your lights on.
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Aug 16, 2011 17:28
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Qaz Kwaz posted:100% student loans at ~3%. Using a debt snowball calculator we would end up paying everything off at the same time, either getting a house first or clearing debts, then getting a house. The house would have a lower monthly payment, but more maintenance costs. Then again, it might be nice to get a jump start on having a house, with that giving us more motivation to get debt free. The fun that is owning a house aside, yes please go check out the home ownership thread and realize the not-so hidden costs of owning a home, the finances are likely in favor of buying a house. As Zeta implied, owning (or paying the mortgage on) a home can be filled with all kinds of unexpected, expensive surprises that you never thought about as a renter. If you currently make $115k as a family, you are eligible for the Student Loan interest deduction if you are fileing jointly (just barely). That's about $2,500 off this year and will go down obviously the more you pay it off. With the Mortgage interest deduction you can take a $150,000 loan at 4.5% and get $6,750 deduction. I'm too lazy to look it up, but I think you're in the 25% bracket which would save you $2,350 in taxes a year. It is feasible that actually taking out another $150k or so to buy a home would not be a bad decision. You are spreading yourself thinner and taking on more risk. It isn't a "OMG! NO! WTF are you thinking?!" situation, but it's very fact/region/situation specific. Even with further information it could be a judgment/risk call.
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Aug 16, 2011 17:47
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Zeta Taskforce posted:T0MSERV0 is spot on about the logistics of how to sell the car and how they won't just transfer liability for the note. How do you feel about using student loan money to pay off credit cards? Also, before Doc Faustus and I actually execute our plan to use 0% APR (3% fee) balance transfers to pay our cards, I just wanted to verify: If we write ourselves a $2000 balance transfer check from a credit card, then cash it and immediately put the money toward that credit card's balance, it will pay off the high APR balance first, right? We just wanted to be sure we wouldn't immediately pay off the 0% APR balance and get stuck with a 3% fee and nothing to show for it. Edit: If this balance transfer thing works, we'll save about $1200 on our Avalanche plan. So I hope it works! Edit 2: Doc Faustus and I are still afraid that taking it as cash will be different from a balance transfer. On my "balance transfer offer" page there are two options: "Pay off creditors" and "Get money for personal use". I can't find any other terms on the page aside from those offered. Also, for some reason the checks they sent me by mail have a 17.24APR after the promo expires (we'll be paid off by then) but my standard APR and the APR offered online with the balance transfer is 15.99. Weird! dopaMEAN fucked around with this message at 19:16 on Aug 16, 2011 |
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Aug 16, 2011 19:06
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dopaMEAN posted:How do you feel about using student loan money to pay off credit cards? How does a $2000 balance transfer save you $1200? Red flags are going off in my head though. I'm sure people do and they get away with it, but if you can't pay a credit card they can't do that much. They can report you to the credit bureau, they can call you. But they will also be likely to settle once you are able to clean it up. If you can't pay a student loan you can put it into forbearance, but that's about it. You can never settle on them, bankrupt them. If you can't pay them they will take your tax refund.
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Aug 16, 2011 19:22
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Zeta Taskforce posted:How does a $2000 balance transfer save you $1200? Sorry, our plan is as follows: First, take out the $2000 for my balance and pay that off. Then take out another $1500 for the rest of my cards. Do the same for my fiance's balances, with his card, which has a few grand in credit. We both have identical transfer offers for our two cards.
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Aug 16, 2011 19:24
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dopaMEAN posted:Sorry, our plan is as follows: So you are looking at taking out $7000 or so? How much were you intending to pay per month on the debt?
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Aug 16, 2011 19:31
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Zeta Taskforce posted:So you are looking at taking out $7000 or so? How much were you intending to pay per month on the debt? We're paying $425 a month on the debt ($9600- though some of that will get refunded after a conference), though we were going to focus on paying the transferred debt first, since the Citi cards have the highest APR of all of our cards. I just checked my avalanche thing, and I was telling you guys the wrong number: We had two spreadsheets going, one with a hypothetical, one with what we were doing. I got them mixed up, I think it's closer to $700. It's hard to know for sure, since it will take us a year longer than the balance transfer offer to pay off our cards. I need to figure out exactly how much we can pay off by October 2012 and just transfer that much. I'm usually great with math and spreadsheets, but credit card calculations make my head hurt. Edit: also, my fiance has taken out more loans than he needs to live. We were thinking of putting those toward the debt. Edit 2: At the minimum, I think we'll transfer the entirety of my Citi balance, since it doesn't hurt me to have that go back on my citi card. Then I'll have 3200 in credit left for extra transfers if desired. I think his credit limit is $5000? Maybe? But he has 0 balance on it right now. So he does not stand to gain by getting money stuck on there past October 2012. dopaMEAN fucked around with this message at 19:51 on Aug 16, 2011 |
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Aug 16, 2011 19:44
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T0MSERV0 posted:Take over the loan, probably not. More likely he would get his own loan (or just pay for it or whatever) and you would still be on the hook for the original loan amount less whatever you sell the car for. In this case, if the loan is worth 9500 and the car is worth 9000, he'd give your bank a check for 9000 (either his money or via a loan on his end) and you'd give them a check for 500 or sign a new loan for the remainder. The bank would need all their money before they'd release the title, so the process would involve more hassle then if you owned the car free and clear, but it's not a huge deal. It's frustrating that I spent $4000+ already, have a nice car, and I'm looking at not only losing it but maybe having to pay to do so. I guess it's a positive thing when you look at it as $9500 in debt gone? The Blue Book value of the car in "Good" condition (I think it's excellent, but playing it safe) is $10,600 so that's not bad right? I could potentially sell it then pick up a beater or a motorcycle? I'm just worried that a beater car is going to require constant maintenance. I trade car payments for car repairs. Also, I'll admit that I would be embarrassed driving around some POS. There's nothing I'm missing with paying off of the medical debt and refinancing?
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Aug 16, 2011 19:55
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Red Monkey posted:It's frustrating that I spent $4000+ already, have a nice car, and I'm looking at not only losing it but maybe having to pay to do so. I guess it's a positive thing when you look at it as $9500 in debt gone? So that means you are going to spend $4000+ over the next couple years? Do you think that whatever beater you are going to get is going to cost $4000 in repairs? If you ever do come across something that dramatic, you can just get a different beater. What are comparable cars actually selling for? KBB and NADA tend to puff up values. That way every dealer can advertise that they are below blue book. You have no ability to refinance and even if you did it's not going to help that much. As for your embarrassment, can't help you there 
Zeta Taskforce fucked around with this message at 21:20 on Aug 16, 2011 |
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Aug 16, 2011 20:05
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Zeta Taskforce posted:So that means you are going to spend $4000+ over the next couple years? Do you think that whatever beater you are going to get is going to cost $4000 in repairs? If you ever do come across something that dramatic, you can just get a different beater. What do you mean I'm going to spend $4000+ over the next couple years? I was saying that's how much I've spend so far. I'm confused. I just have had bad luck with cars before this one so I'm worried about history repeating itself, heh. I looked at autotrader and carmax, exact same make and model in similar condition. None had less than 78,000 miles and the price for that one was $12000. One with 83,000 was selling for $10,800 and another with 94,000 selling for $11,000, another 57,000 miles at $16,800. Mine has had regular maintenance, oil changes, new tires, etc. on schedule since I purchased it.
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Aug 16, 2011 20:20
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Red Monkey posted:What do you mean I'm going to spend $4000+ over the next couple years? I was saying that's how much I've spend so far. I'm confused. When you said you spent $4000, I assumed you meant the payment. Will you not be making another $4000 in payments? It is a rare used car that needs so much work that it equals a car payment.
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Aug 16, 2011 21:24
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