NT Fam what do you know about credit cards? vol. debt to my eyeballs

[runningfishy]

OK guys so last summer I took a trip to San Fran and decided to live outside of my means and ran up a platinum citicard with a $1200 limit. That card had no interest for a year and the year is now up.


I paid the card 3/4 off last month but car troubles have me at $1184 in the hole again. Today I signed up for a bank of America card with an $800 limit with 0 interest for a year. I think I am going to use all $800 to pay off the citicard and pay the remaining $384 myself. That way Ill owe $800 interest free and have a year to pay it off. Is this smart?


Btw, I am a 20 year old college student working min wage. Every now and then I make lump-sums of money from working camps and whatnot so I should be able to do this, right?

As some has said, it's extremely terrible of you to fall into this habit of rolling over your debt. Ultimately, the debt spiral will KILL YOU, just like it has w/ many other things.
Fortunately, it is manageable and easily fixed if you can change your habits.

What you want to do is just pay off the principal and evaluate your liquidity needs. Know how much you spend, and what you spend it on. Make adjustments.

As far as all the credit card transfer goes, it's terrible for your credit and it's a sign that you are going under-water.

The best solution is to ask your folks to pay it off, if your savings can afford it, then tap into it. The interest rates on credit cards are just absurd!!

 

[runningfishy]

I'll throw in my advice and what I would suggest. I can't believe there's so much mis-information here and terrible advice in terms of habit.

1) A credit score is meaningless if you cannot even handle liquidity needs of your day to day life. Why worry about borrowing money, when you cannot even handle your current situation? A good credit score will come naturally through good habits. A bad one is a manifestation of terrible habits!

2) Rolling over debt does you no good if you cannot understand liquidity. It buys time, but in the end, if your OUTFLOW out paces your INFLOW, then you'll always be in debt.

3) I have NEVER EVER in my life heard of people PAYING for a credit card. LOL That's just a joke and a bunch of headache. There are plenty of financial services out there that will offer you products for free, and even give you incentives that 'make' sense. I WILL NEVER PAY a bank for a credit card. The whole approach in getting a bank to WAIVE a stated fee in the agreement is STUPID. What I mean is, if you sign up for a credit card that requires you to PAY THE BANK, then you'll forever be stuck in a 'stated' loop hole of TRYING to APPEASE the bank, so that your fee is waived. Dont' be silly! There are plenty of better ones out there.

4) The purpose of a credit card is to provide liquidity and convenience. Using it to finance something you cannot afford will get you into more trouble.

The PRINCIPAL is what you must always look at. If you don't shave it down, you'll forever be stuck in the debt spiral. Stop being macho, and stop making dumb decisions. Again, why are you worrying about a credit score? While that is important, in this low interest rate environment, banks are looking at whether or not you have the capacity to pay your monthly payments. A reserve fund is a MUST. Ultimately, you would want to make sure you have a fund that'll support you from 6months to a year. Given economic conditions, I would say, some people have been out of real work for years!

 

[g00dmusic]

I don't know if it's been mentioned or not but....DON'T BE LATE on your payments!  From what i've seen, it'll give you a hefty late fee AND will terminate that 0% interest you were holding on to.  You can call and have them reverse that late charge if it was your FIRST (and only) late payment - either than that don't be late famb..