Bank of America credit card conversation

Warning: I'm not too happy right now and there may be some not so nice language in this post.

Wow! So, we have taken the advice of calling our high interest credit cards and asking for a rate reduction.

This woman (a supervisor) will not reduce the interest rate.

What she IS going to do is lower our credit limit. This sucks because it will raise our debt ratio, and in turn lower our credit rating. She says this will help. DH is trying to tell her it won't. She won't listen. We're trying to get someone above her and she is saying she is the top. Bullshit. DH is being really good, calm, persistent, and knowledgeable.

We have been good customers. We have a high balance, they've been making around $200 per month in interest from us, and we want something in return. Instead they fuck us again. Now it's time to take our business elsewhere. The interest rate is 23.99%. Screw that.

Good thing we have a 0% transfer offer. We will be transferring our Bank of America balance to another card and never using them again.

We won't be closing the account, because that could hurt our credit rating, but we will never use it again (other than the occasional tank of gas that gets paid immediately).

edited to add:

Our current balance with this card is $8,762.50
Our current limit is $14,700.00

We owe appx. 60%

She is cutting our limit to the amount we currently owe, hence making us owe 100%.

We are done with Bank of America.

Now that I can post again!!

Here's what has been going on:

Unexpected expenses.
1. Our sump pump died when we got back to town. That was $500. Thank goodness we have an emergency fund! We were able to get it fixed immediately and it didn't affect our finances, we just have to refund the account over the next couple months. We'll do that by lowering our extra credit cards payments a bit. No big deal.

2. Yesterday I was trying to print. It wasn't working. I'm married to a computer guy, so our house is set up a little differently than most. We both have laptops (the kids used to, but we took them away and gave them a desktop that is in the living room, we can see what they are doing at anytime) and then there is a networking computer downstairs.

I don't know if it's really called a networking computer, but that is what I call it. All of the other computers are connected to the main one. It does backups on all of our computers, so if something happens, it's no big deal. It is also connected to the printer. Which means that no matter where I am with my laptop, I can print. (then send one of the kids to the printed downstairs to get it for me)

So, since this 'network' computer died.........A) nothing is getting backed up B) i have to take my laptop downstairs and plug it into the printer.
Most people can live with B ( I can't), but A is a bad thing.
So, Mr. IT hubby is coming up with something. I hope we don't have to buy a new one. Our emergency fund is equipped for that!

3. We don't have a 3 yet. But doesn't everything come in 3's?? Please be the dryer. I really want a new dryer!

Next on the list of going ons.............
I think it deserves a separate post. This one is a little depressing and it's time to end it.

Full Disclosure: Credit Card Debt

Here we go:

I'm going to list each credit card, the balance a year ago, the balance today, and the interest paid and the rate.

Credit Card..... 120/30/07 .... 11/30/08....... Interest......... Rate
Wells......... $7,152.87....... $ 5,887.66....... $1,072.54 ....13.9%
Chase ........ $14,962.23 .....$11,066.55 ......$1,991.12 .....14.51%
BOA .......... $13,528.08 ..... $10,437.62 ....$2,364.24 .... 24.99%
1st Horizon.. $1,8890.93 ......$1,482.59 ......$199.17....... 11.99%
Lawyer .......... $1,438.54......... $ 0.00 ........ $183.40
DH Sears........ $1,867.85 .........$ 0.00......... $237.60
My Sears......... $915.11.......... $ 0.00 ......... $94.02
Home Depot ... $714.73.......... $ 0.00 ........$ 0.00........... 0%
Medical bills ...$2,000 appx.....$ 0.00 ..........unsure....... unsure

There it all is.
The 2 sears cards had the highest interest rate, so we paid those off first.
Home Depot was a no payment, no interest deal, so we paid that off right before the deal was over.
We could easily pay off the 1st Horizon in a few months, but it is our lowest interest rate, so we are paying $25 above the minimum due every month.
Wells is the second lowest interest rate, we pay $150 per month, about $30 above the min. due.
Chase and BOA used to be close in interest rate and in balance...........we were splitting the payments on them, much higher than is due.
Then BOA jacked our interest rate up, for no specific reason. So, we are paying about $50 above minimum for Chase, and aggressively trying to get the BOA paid off.

We want to pay less in interest over this whole deal, which is why we choose to pay the higher cards first. Most people decide to pay the smaller balance cards off first. But they end up paying more in interest.

My lawyer was on a payment plan of $50 per paycheck. I chose not to pay extra on that because it did not show up on my credit report. So, it wasn't affecting my credit score.

Our total balance owed last year: $44,470.34
Our total balance right now: $28,874.42
Interest paid: $ 6,142.08

Total Paid this year: $ 15,595.92

Wow! It just amazes me 1) how dumb we were and 2) how great we've done this month 3) what we could be doing with that money if we didn't have the debt!!! I mean seriously! We paid over $15,000! I could have a very nice savings account, furniture downstairs, a new washer and dryer, and both kids in private school (instead of just one). And we could have had a family vacation this year.

Our goal is to have the rest paid off by this time next year, but I don't know if that is going to happen. We will definitely have it all paid off within 1 1/2 years.

What would you do with $10,000?

I'll tell you what I did with it over the last 6 months. Paid on credit cards. Since Christmas we have paid off 1/4 of our cc debt. While I am very proud of us.............I'm also pretty bummed about it. I mean seriously!! $10,000.00!!! I think of what I could have done with all that money, but couldn't because of our debt. It angers me.

I could have a very nice savings account, a new washer and dryer, and a new pool.

Instead, our savings account is skimpy, the washer and dryer may die any day, and we are tearing out our pool. (pictures of the pool to come soon)

As I have promised in the past, here is the amount of credit card debt that we owe.
In December it was $41,887.47
Since then we have been charged $3,895.44 in interest (ouch!)
Now our total is $31,888.02

If we can keep up the payments, we will be credit card debt free by December 2010!! But, it will be tricky because I have decided to go back to school for a second degree. So, my paychecks are a little smaller, but we are cutting back even more. Hopefully we can still meet that goal.

On top of paying all of that, I have this in savings (it will be gone in a few months)
$1,800 for house repairs (pics to come)
$2,400 for my daughters braces (her dad will pay the other half)
$2,500 for a new fence - and that's only the back end, can't believe the cost of that!!
and $600 for tutoring for my daughter
leaving us with $1,000 for an ER fund.

Not too bad! I refuse to charge anything! If we don't have the cash for it, we don't get it. I'm ashamed it took $41,000 in debt to finally grasp that concept, but better late than never.

My budget and get out of debt plan

is working pretty well!!! It's not a very strict budget, not near like some I've seen. But, it is good for us. I use Microsoft money and have entered all of our regular bills and paychecks into it for the rest of this year. I've entered an estimated amount for groceries, gas, etc.. That way I can see how it will work. I then entered my credit card payments, started the 'snowball' effect on them and we pay around $1500-1800/month.

We also have $450/month going into a savings account. It is used for non-monthly items such as vet bills, car tags, car insurance, birthday gifts, etc...And once that balance reaches $1200, we take $1000 out to put on a credit card, or move it to our ING savings account.

Our ING savings account is for house repairs. We have around $2,000 in it right now. This summer we NEED to replace that back part of our fence, replace the gutters and boards under them, and do some work on our roof. Those are must-do's. There are a couple rooms I would LIKE to paint inside, depending on how things are going.

We also have another savings account that is our emergency fund. We try to keep it around $1,000. It will be used for brakes on the van, and whatever else comes up.

We have a good sized FSA. Since 3 out of 4 of us wear glasses, we are not worried about not using the money and losing it. Both kids usually get glasses at the end of the year, and if there is money left, I also get a new pair.

We have NOT used our credit cards since December!! That is the month we had our "WE ARE FUCKED" moment!! I am very proud of the progress we have made. I will post a semi-detailed report of how bad it was then, and the progress we have made in just 4 months.

As far as fun money goes, we also do this differently than most people. I have a very flexible job. I can work anywhere from 20 to 40 hours a week. So, in our budget I put the amount for a 25 hour work week. If I work more, I divide that amount in half. One half either goes to our emergency savings or a credit card, and the other half I cash. I use that cash for eating out, drinking, a new shirt or pair of shoes, or whatever.
I believe that has really helped me succeed. If I wasn't able to do those things, I'm pretty sure I'd have the credit cards out again. It's a reward for myself.

DH's fun money is similar. His paycheck is direct deposited. So much goes into our joint account for paying bills, so much goes into that non-monthly bills savings account, and so much goes into his checking account.

It may sound odd and maybe even a little difficult, but it sure has been working for us! Just wait until you see the results!

This weekends goals/to do list

To hold myself more accountable, I'm putting all out there for the world to see.

1. Laundry
2. get kids to do chores
3. payroll
4. payroll taxes
5. get business paperwork together for taxes
6. take daughter shopping to spend gift cards
7. go to home depot and get new blinds (mom gave us $ for Christmas)
8. get DH and son to clean fish tank
9. balance checking account
10. pay bills
11. clear off desk
12. figure out which credit card to start paying down first. I keep going back and forth on this one. The highest interest one, or the one with the lowest balance.

To expand on the credit card debt. There is much controversy in the financial world on how to pay your credit card debt down.

Some say to pay off the one with the smallest balance first, and just keep moving down the line. They this this gives a person a sense of accomplishment because they can see they have less debt by having less bills every month. But, in the end you will have spent more money, because your highest cards may have the highest interest.

Others say to pay the ones with high interest off. In the end you will be spending less money, because you will be paying less on interest. But, you don't see the immediate relief if those cards are the ones with the highest balance.

Maybe one if these days I will start posting my progress on this, right now I'm embarrassed by how much debt we have.
Over the last couple months, I've been making spreadsheets and such to keep track of our debt and I think I've finally came up with one I like. If I stick to my plan, we should be good by 2010. By good, I mean our credit card debt close to done. They doesn't include student loans and such.

I'm only paying the minimum on student loans because I can write that interest off on my taxes. After credit cards are paid, I will move onto those.

Ok, I think that is enough for this post, better get that laundry started!!