kol | On the subject of credit (Reply)

Credit cards have always triggered a low grade terror reaction— needless to say, I’m one of the very few people in my family who haven’t gotten themselves overwhelmed with debt, and the first credit card I ever opened I never used. But I realized in 2009 credit cards can be useful if you know how to work them, and I opened a rewards card through my bank, paying off the balance twice a month. It was nice to be paid $5-20 bucks a month just for using the card, and I always put that money right back to paying the next month’s balance. Basically, Kol was uber!responsible.

Then 2012 hit and I realized I had an urgent need for some high ticket items. I made more money in 2011 than I’ve ever made before, thanks to being a supervisor for 5 months of the year, so I still had a good amount in my savings account in February of 2012, even after the east coast trip. I could have bought a used laptop and a used bike and been done with it, but I decided instead to open up a new credit card & pay that balance down instead. This turned out to be a very good decision, as I ended up making nearly $6,000 less in 2012 than I did the year before and ended up putting additional credit on the card (Bells & whistles for macbook pro & new bike, $200 2 year domain payment, Giants tickets for 3 people, my mom’s 60th birthday presents (new ipad, assorted converter boxes & cables for the apple tv my aunt bought), clothing for work, assorted shinies).

All and all, it was over $3,000 dollars I put on CC #2 in a year I made considerably less than expected. But I was still on track for paying it off with a few months of having to pay interest. Then October came. And in October CC #2 informed me that the APR rate was going up to 22.99%, and my deferred interest would be jumping up to that rate. So I went from facing pocket change in deferred interest to nearly $400 dollars, and with an interest rate of 22.99% each month. This was not a good situation to face, but I could only throw as much money at CC #2 and keep getting that balance down.

And I faced February at the point I could actually pay the entire thing off. But I looked at how hours shake up historically, balanced it against the chances of me landing that better job, and decided it would be wiser to not go in that direction.

And that’s when I started considering balance transfers.

Unfortunately, most of the offers I’d received would have done the same bait & switch as CC #2— get you into a nice, low APR & then jumping it to something ridiculous. And since I want to have a second CC for emergencies, getting a ridiculous APR jump wasn’t going to work for my plans. But all the cards I researched / received offers for in the mail were promising the same things, so my balance transfer idea didn’t seem like it was going to work.

And then yesterday, I got an offer I couldn’t refuse- 0% APR for 15 months, 3% fee on balance transfers, and the keeper— a locked in APR of 12.99%. Needless to say I jumped on that offer, and as long as everything goes okay, I should end up closing CC #2 at the end of this month & have 15 more months to pay off the original debt, which is only $1,102. According to my mint.com account, even if I fall down to a minimum payment of $50, I should be able to close out the balance WELL before the 15 months are up.

And the good news is, I have no more big expenses coming up this year. Suniver.net is paid up until September 2014, bike & computer are in good shape, I have enough work clothes, and unless my health takes a sour turn, my medical bills are well within my savings. AND by July I’ll be in the green for Readercon, too. My savings are good enough to cover the current downtime at work AND keep me motivated to look for a better place.

So yeah, pretty happy with myself— and my credit score-- right now.