interest

As you know from my previous budget related posts, I have accumulated some credit card debt, and Im working to eliminate it.  So, when my limit was cut and my interest rate was increased by one of my credit cards, I began shopping around for a new one.  Here’s what I was looking for:

• 0% interest – This was a requiremtn, as it would allow me to devote more resources to the principal while still paying the same amount.
• No annual fee – I dont need to pay to join thier “club”.  I could be paying them interest down the line, why should I pay them a fee to pay them interest?
• High enough balance to complete my transfer and close the card

These things used to be easy to find, but with the recent activity in the markets and the credit tightening, they have become something akin to a coelacanth in modern day credit carts.  Either way, I decided that it was worth a look, and headed to this balance transfer site and began my search.  I found a card that said it would offer me 6 months on a 0% balance transfer APR, and ~12% interest after that.  At that point, everything was better than what I was currently getting, so I called and signed up.  (I always call because if I dont like the terms they give me over the phone, I tell them not to bother, and resume my search.

So, I call them, and they say that I’ll be approved and will soon send me the card, and all that other information they send you.  I opened the card, found my limit to be drastically lower what I was told to expect, so I was a bit annoyed about that, but didnt really take any action after that.  I couldnt transfer my whole balance, so i figured i’d close it when I got a chance, and put the matter aside.   Fast foreward one month, and I get a bill from the comany.  I considered this odd, as I didnt use the card.  I open it to find a wonderful $60 bill.  I was confused by this, and immediately went to the statement, to see what I was being charged for.  Most of the bill was an annual fee, but there was a portion that would go to “insurance” incase something were to happen to me that would prevent me from paying for my bill.  I had remembered being adamant about not being enrolled in this, and I was unhappy to find out that they have ignored my requests.  I decide to call and cancel.

Enter this article at five cent nickel on the effects of credit hopping and changing different cards to lower your balance.  Then, later that same day, I read an article from frugal dad on not letting fear guide your financial decisions.   Each article is great and makes good points, but ultimately, the decision is yours.  How mad do the credit card companies have to make you for you to finally tell them to shove it? I personally have little time for them, and will take whatever they want to give me.

When I called them, I talked to 3 seperate people, and each of them said they “regretted that I had to close my account, and asked if I would reconsider my decision”.  Once I told them that I wouldnt, the final person that I talked to offered to take $20 off my fee.  No, that’s still a bad deal, and no, I dont want it.  So, they cancelled my account, then preceeded to tell me about how their bank was “global” (note: they dont have any branches in my city, county or region.  In my opinion, they are not even local).  After I told them ‘no’ on this, they decided to try to sell me health insurance (twice), other bank services (twice) and then, asked for an office number to contact me at.  It was at this point that I really started to grow agitated, and I let the lady on the phone have it.

I said “what do you need my phone number for if Im no longer an account holder”

She said “well, just in case we need to contact you with future offers”

me: ” I dont want any future offers, and I dont want any current offers.  Please dont contact me, and have a good day”

This left me with a lesson that I had been reading about since I started reading finance blogs, but had yet to see first hand.  Make sure that you are living below your means, because being poor (and needing access to credit, in this case) is very costly.  If you pay as you go, then you can control your destiny and your financial future.

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