The Wong Ohana

Aaaaaalrighty then - - - just got my mail, and lo and behold there was a credit card bill. My (not-so-new) favorite pass time. Not paying the bills, but looking for BETTER deals! And guess what I just found! Included in my statement envelope were some “courtesy checks”.

Now, normally this is a thing to be wary of. ALWAYS read ALL the print, in particular the smallest print front and back. This is where hidden fees and charges will appear, just small enough to require a magnifying glass, a boiling pot of some kind of witches brew, hair of newt, and a few spider webs in order to make sure you catch everything there.

Well, I typically tear these up in shreds and throw them away without even as much as a second glance, but what caught my eye today was another offer for 1.9% until October 2008. That, in itself did make me stop take a peek. On further inspection, I see there is a balance transfer fee, but it has a reasonable cap of $75. This means that as long as I transfer over in excess of $2,500 I will be getting less than the standard 3% fee - and if the offer is good enough I KNOW I have more than $2,500 that I can move around.

Now, what is the first thing I’ve been saying you need to do? That’s right. I opened up my SPREADSHEET and took a look to see what the circumstances of my outstanding debt is. What promotional offers do I have , when are they going to expire, what is the standard rate they will revert to on expiration, and of course the balance due. I see that I have one card with what I consider to be a rate higher than I want to pay. I have a 10.9% fixed rate with a high balance. Now some people might say that 10.9% is pretty good, but you have to understand that I’ve been playing credit card BINGO for years, and this rate is unacceptable for me (and it SHOULD BE for you too, once you learn a few solid principals).

The next thing I do is to go back to my promotional offer sheet and look at all that very fine print to see what the rate will revert to once the promotional offer expires. Oh yeah, way at the bottom of the page in the last paragraph - barely visible the print is so small (but then again, maybe its my old eyes having trouble???). I find that it will revert to the standard rate currently existing on this card. So I flip the page, and see that the standard rate is fixed at 9.9% (remember that 10.9% is what I’m interested in lowering). This fact alone makes this an EXCEPTIONAL OFFER, add to that 1.9% for 9 months and I’m ecstatic! Not only can I transfer my ENTIRE balance to the 1.9%, but subsequent to that offer expiring, the rate will actually be 1% LESS than I’m paying right now! I’ve done a few calculations on the amount of interest I’m paying at 10/9% (what I consider to be an obscene monthly amount), and this one offer alone will save me literally thousands of dollars in interest payments over the amount of time required to pay this particular debt in full!

This also means that within the next week (the time it will take for them to transfer the money to my checking account - and YES I did request that lovely service AGAIN), combined with the time it will take to disburse the funds - - - the highest rate I will have on any debt, anywhere (not withstanding my mortgage which is fixed at 6%) will be 4.9% - - - wait, did I just say that the HIGHEST INTEREST rate I will be paying over the next 9 months will be 4.9%????

Do you get how MONUMENTAL that is when you calculate in that if I continue to make the same payments I’m making right now, the difference in the new interest rate will be going directly to knocking down the PRINCIPAL! And that’s where the real savings comes from. The principal gets paid down quicker, thus the total debt disappears faster, and less money goes to the credit card company!

It doesn’t get any better than THIS! Unless and until the day that I’m completely debt free, which is a serious goal I am currently working towards! Now I won’t have to look at any more offers, or make any more phone calls until after October of this year when my 1.9% expires! By that time, I’m hoping that another 4.9 will show up - and who knows - - - it just might because as I pay off each smaller amount, they keep sending me better offers to move funds right back to them!

Another exciting thing I’m looking forward to is that when I pay off this 10.9% balance - this company is going to immediately call me, send me letters, and basically barrage me with offers of better interest rates. Maybe I can even negotiate them to drop my existing 10.9% fixed for new purchases. After all, this rate just isn’t competitive enough for me, anymore is it???? So in order to keep my business, and this is the card I run all my personal and business purchases through - so trust me when I say they definitely want to keep my business, they will have to mkae a very attractive offer indeed! Should be very interesting to see what they come up with!

Now, ask me if I’m a happy camper today??!!!

Filed under: Credit Card DOs and DON'Ts, Personal Finances on January 17th, 2008