Blog Entries

Credit Card Debt, September, 2009

admin@dueminder.com — Fri, 02 Oct 2009 07:00:00 +0100

It was a really crazy end of summer and beginning of the school year, so I've had little to no time to update the blog. My debt reduction plan has slowed to a crawl over the last three months, and I've only made minimum payments in that period. The good news is that my current interest rates are very reasonable, with 5.99% being the highest of the 3 active accounts. I've been paying roughly $625 per month in payments with a roughly 92% payment efficiency. That means $575 per month is [...]

Credit Card Debt - June, 2009

admin@dueminder.com — Thu, 16 Jul 2009 07:00:00 +0100

This month, I was unable to achieve my full commitment of $1500 towards reducing debt. I achieved just less than half of that. The biggest factor was the purchase of a used car, which we needed now with 5 working drivers at home and only 3 cars.

The biggest news for June is my shift in strategy in which account to carry the debt. I had written about the HELOC consolidation loan, and it turns out that was temporary due to an even better idea (better for now, anyway).&nb [...]

401k Loan for Debt Consolidation?

admin@dueminder.com — Thu, 16 Jul 2009 07:00:00 +0100

I've written before about using a home equity loan or line of credit (HELOC) to transfer debt away from credit cards. Last month, I discovered another possibility for those with a 401k account at work. Most 401k accounts let you take a loan against the funds, usually up to around 50% of the value in your account. For me, there was also a $125 origination fee. I have to say up front that experts I admire generally frown on this strategy. There's a good discussion [...]

Appeal Inquiries to Raise FICO

admin@dueminder.com — Mon, 22 Jun 2009 07:00:00 +0100

About a month ago, I received an alert from my Equifax service that my FICO score had dropped 16 points... argh!!! I logged in and found that my most recent credit application from early May had triggered an inquiry limit, and flagged me as a consumer desperately seeking credit. Well, it is true that I have applied for credit more over the last 2 years than in any period of my life, but it has not been in desparation. Over the last 2 years, I've purchased a home and a townho [...]

The Latest Scam

admin@dueminder.com — Fri, 12 Jun 2009 07:00:00 +0100

Over the last week, we've received numerous phone calls from Kohl's, the department store we occasionally shop at. We last received a call last December when my wife's account was overdue. But we know we're current on the account, so we did not answer the phone. We figured it must be a telemarketing campaign, especially since they never left a message. Finally, curiosity got the best of my wife, and she answered the phone last night. Well, it seems they were just [...]

HELOC for Debt Consolidation

admin@dueminder.com — Thu, 04 Jun 2009 07:00:00 +0100

I have 2 accounts that have come off of introductory interest rates recently, and now stand at 13% (Discover) and 15.9% interest (Bank of America). I have seen my average interest rate jump from a superb 2.4% up to mediocre 12.6%. Usually, I wait for a new balance transfer deal to come around, but I haven't had one good enough to take advantage of. I have a Citi balance transfer offer of 0% for 9 months, but it requires a 3% fee up front. Adjusting for the fee, the act [...]

Credit Card Debt - May, 2009

admin@dueminder.com — Sun, 31 May 2009 07:00:00 +0100

Its been a while since I've written. My debt reduction plan has taken a bit of a hit the last 2 months. First, I was trying to refinance the house, and had locked in at 4.875%. I decided to not roll expenses into the loan, which meant I needed to come to closing with some cash. I decided to stick with minimum credit card payments for the month of April. Well, my plans unraveled when my FICO dipped to 698 due in large part to Bank of America slashing my credit limit from $24,000 to %6,500. [...]

Credit Card Debt - April, 2009

admin@dueminder.com — Fri, 01 May 2009 07:00:00 +0100

Here's my credit card debt summary for the month:

Plan summary and account list for kvan's plan 'Credit Cards'

Summary of Credit Cards for user kvan Total Balance $39,193.09 Payment Efficiency 92.04% Minimum Payments $559.00 Total Savings $37,893.01 (17 Years, 7 Months) Monthly Commitment $1,500.00 Total Payments/Fees $44,977.12 / $5,784.03 Kicker Payments $941.00 Payo [...]

Never Waste a Crisis

admin@dueminder.com — Sat, 18 Apr 2009 07:00:00 +0100

Is anybody else baffled by the huge profits announced recently by Wells Fargo, JP Morgan, and other big banks? I was scratching my head for a while. We've just been through the worst financial system meltdown our country has ever seen, including massive bailouts as a last-gasp effort to keep many banks operating as viable businesses. How can impeding insolvency suddenly change to massive profits, in the span of a few short months?

If you think of what's happened in the [...]

Credit Card Debt - Mar, 2009

admin@dueminder.com — Tue, 31 Mar 2009 07:00:00 +0100

Its been a busy and eventful month for me. I achieved a short term milestone, as I had planned, to break under the $40,000 credit card debt level. I thought this would bring a sense of accomplishment, but the joy was small and short-lived. $39,204.92 is my new number, and I guess it still looms large. Still, as I write this, I do feel a moderate level of achievement. The plan is working, as I've carved away about $24,000 from my highest debt level.

What I think is keeping my m [...]

Canceling Account Hurts FICO

admin@dueminder.com — Mon, 16 Mar 2009 07:00:00 +0100

Generally, if you carry balances on your credit cards, canceling one of the accounts will hurt your FICO score. One key factor in the FICO calculation is the debt utilization ratio, which shows how much of your available credit you are actually using. If the total of the limits on all your cards adds up to $20,000, and your balances add up to $10,000, you have a utilization of 50%. That doesn't sound too bad, right? Actually, that is relatively high in the eyes of the [...]

A Tale of Two Plans

admin@dueminder.com — Fri, 06 Mar 2009 07:00:00 +0100

On the SavingAdvice forum this week, a user presented the group with his debts, asking for advice on the best way to pay off his credit car and auto loan debts. He has $15,000 in savings which could be put to use, and is thinking he should use $11,000 of it to pay off the loan on his SUV. The question is, which of the debts should he pay off now, and which ones should be paid over time? Here's his note:

Need help...I may have ability to pay down debt!
Hi, I want to thank you [...]

Raw Deal from GMAC

admin@dueminder.com — Wed, 04 Mar 2009 07:00:00 +0100

A co-worker and friend of mine told me an almost unbelievable story about his home equity line of credit with GMAC Mortgage. He and his wife recently had their 4th child, and wanted to build an addition to their house. They received a $50,000 line of credit with a small book of check to use to pay contractors. At some point, they ran out of checks and requested more from GMAC. Within a week or so, they received checks and the wife wrote a $5,000 check to a contractor, [...]

Credit Card Debt - Feb, 2009

admin@dueminder.com — Sat, 28 Feb 2009 07:00:00 +0100

It was another decent month of steady debt reduction. I paid out my commitment of $1,500, and am now within a month of breaking through the next big barrier, the $40,000 debt level! It doesn't sound that exciting that my debt will be $39,300 or so, but I am savoring the solid progress and look forward to the small victory.

My Bank of America card now has a new balance transfer offer... 1.99% interest through November. My WaMu card is coming off it's 1.87% intro rate in another month [...]

New FICO To Improve Fairness... Some Day

admin@dueminder.com — Wed, 18 Feb 2009 07:00:00 +0100

Gerri Willis, author and host of CNN's "Open House" wrote about the new FICO '08 formula for determining creditworthyness in this article. As you know, the FICO score determines creditworthiness in the eyes of almost every creditor. It determines whether you are approved for a loan, and what interest rate the creditor will extend you. Insurance companies vary rates according to your FICO, some employers and potential landlords also use the FICO to guide the price you get charged for [...]

Card Companies: Evil or Just Greedy?

admin@dueminder.com — Tue, 10 Feb 2009 07:00:00 +0100

Are credit card companies evil, or just greedy? I have often mulled this question over in my mind. Credit card company practices have been labeled "abusive" by many lawmakers and regulators. But how did we arrive at a place where issuers can arbitrarily rate your interest rate, charge outrageous penalties for the most minor transgression, and trim your credit limit or even cancel your account at their whim? Are these companies evil, or is it greed driving this behavior?

I ima [...]

Credit Card Debt - Jan, 2009

admin@dueminder.com — Sat, 31 Jan 2009 07:00:00 +0100

This month was a month of belt tightening, as the post-holiday bills began trickling in. My wife is beginning to understand the depth of my resolve, as I frequently interrogate her on new charges showing up on the checking account ledger or our monthly usage credit card account. She's a good sport about it, and deep down, appreciates the importance of what we're trying to do. I think she especially appreciates my new miserly attitude, as more often than not, it was me bringing home that [...]

Just Say No to Rate Increases

admin@dueminder.com — Wed, 28 Jan 2009 07:00:00 +0100

Over on the SavingAdvice forum, a user relayed his experience with a Citi credit card as they move to increase his interest rate. He currently has a balance transfer rate of 5.9%, plus an ongoing purchase rate at 5.9%, both of which expire in about 2 years. These are good rates. Too good, apparently. Citi sent him a letter, noting that with the hard economic times, it has become necessary to raise his rate to 14.9%. As with all of these offers, Citi allows him to [...]

WaMu Cardholders Beware

admin@dueminder.com — Wed, 21 Jan 2009 07:00:00 +0100

Washington Mutual was the 6th largest US bank when it went under in September. JP Morgan Chase bought the assets which included the WaMu credit card business. I have used my WaMu card only for balance transfer offers, which have been fairly beneficial for me. Today, I received a letter from Chase outlining the new rules as Chase absorbs the WaMu credit card business. I see nothing but downside in the new terms. If you have a WaMu card, you can probably expect the same. Some of the highligh [...]

17 Years to Pay Off $2000?

admin@dueminder.com — Mon, 19 Jan 2009 07:00:00 +0100

Over on the Finance Forums, there's been an ongoing discussion about whether John Commutta's "Transforming Debt to Wealth" program is a scam or not. For those who don't know, the Commutta program is one of several promoting the "snowballing payments" method to accelerate debt elimination. The snowballing payments method is what DueMinder uses: commit to a specific dollar amount, higher than your total minimum payments. As a debt gets paid off, you don't reduce your commitment, but rathe [...]