How an impulsive move is again changing our debt snowball.
Crazy how just a few clicks of a mouse can change an entire plan, but yesterday that is exactly what happened! On a bit of a whim, I decided to apply for a new credit card that was offering balance transfers with zero percent interest for 21 months. Although it also charged a 3% fee for making a balance transfer, it was the 21 months of interest-free that pushed me to click submit on the application. Not even 60 seconds later, an approval of $10,900!
We have had one pesky credit card company that, despite our phone calls begging and pleading for an interest rate reduction, they would not budge. In fact, even with a sterling record of paying them on time every month, they continued to raise the interest rate. Such a nice way to treat their long-time customers. With that, we became even more determined to part ways! It was making us sick to see how little of our payment was going towards the actual balance and it was past time to do something about it!
With a balance of $12,604 on this credit card, my approval of $10,900 for the new card wouldn’t cover transferring the entire balance, but it came close. I transferred $10,570 which brings the higher rate credit card down to just a smidge above $2,000. While doing this did cost a 3% fee of $317.10, the amount we will save in interest will far outweigh that cost.
What to do with the remaining $2,000? That balance has now taken the #1 position in our debt snowball. How soon we can pay that off it yet to be determined, but the sooner, the better! While this transfer didn’t make the $12,604 magically go away, it does buy us 21 months of interest-free time in which the entire payment will now go towards the principle.
I’m sure this change won’t be the last one we make while we battle our debt. Much like reviewing our budget on a monthly basis, the actual debt itself also needs a monthly review. Our goal to get out of debt hasn’t changed, but there are times when making an adjustment to the plan can be beneficial.
Have you had success in transferring a balance or getting an interest rate decreased? Paying off debt is a battle, and there are times a change in strategy is in order!
I have had no success in getting the cards to lower the interest rates. And the hike is due to the federal interest rates going up (which I have blogged about) As for doing a balance transfer, I am not opposed to doing, but I would have to close the card that cleared the balance so that I would not be tempted too. I too have thought about it, but as per Dave Ramsey says, I would only be moving the debt. I don’t have the discipline like others to do balance transfers. Now that is not saying that I would NOT do it, but my CC balance is over 40K so it would not benefit me at this time.
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We have had another card that did give us a lower fixed interest rate for six months. We recently called them after those six months were up and they again gave us another lower fix rate for six months. Since starting this journey we have become very disciplined in not wanting to ever see any of our balances increase, so no temptation there. I want credit cards out of our lives for good!
I hear you. I can’t wait until the credit card debt is done. That will be the debt I pay off last.
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Are you paying your debt off smallest to largest or are you doing something else?
I’m following the debt snowball method, but the largest debt is the Discover Card.
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We have (gulp) two of these blasted cards. With an offer we received in the mail today, we may be transferring both remaining balances and doing a slight shift in our snowball. Less interest being paid means the faster we can eliminate our debt. No worries about charging them back up again. We will be closing both accounts ASAP.
My husband and I each have a credit card with Capital One with crazy high interest rates. I’ve been with them since I was 16 – never a late payment! I was able to get them to reduce my interest rate by 3% but only for 7 months. When I called after the 7 months, not only would they not continue the reduction, but they increased the original interest rate by 1.2%! I was furious. Now we’re trying out hardest to get them paid off asap. I haven’t tried to transfer to a 0% card, because usually the transfer fees negate any savings for us. Our balances aren’t too high ($2k-$4k) so not a good enough savings to open another credit account. I was put off with how poorly CapOne treated long time, good standing customers though. Can’t wait to close those accounts out!
It was Discover who did the exact same thing to us, but they wouldn’t budge at all! Given how much we owed and where they fell in our snowball, this balance transfer will save us thousands. I wish you the best in getting Crapital One out of your life for good!
Capital One is the worst credit card bank ever. They are just hideous. I will never get a credit card with them again.
Rhitter94 recently posted…On Bi-Weekly Progress Report – 08/20/2017
Capital One is one of the few cards we have never had.
I had great success with this technique in clearing our credit card debt. I wish you luck with yours!
Thank you, Patti! I feel like our debt snowball got a $200 monthly raise by eliminating so much interest.
I did several balance transfers in order to assist with clearing my credit card debt. This was several years ago, but chase offered a 1% balance transfer fee for 6 months or something like that. I used it several times and it was great because my bank of America MasterCard had a ridiculously high interest rate.
I didn’t see too many without transfer fees. The ones that did generally only offered 6 months of zero interest. I feel confident that we can pay off our credit card debt in 21 months.