Credit Cards

Right. I'd never suggest not keeping one around for emergencies. That is assuming of course that one can actually stick to that ideal.

 

Dave Ramsey's take on it:

http://worldnetdaily.com/index.php?pageId=34911

 

Cut up the card then go to your bank, get a personal loan and pay off the credit card in one big payment and then pay off the loan at a lower rate.

Then get another card for emergencies and put it in your freezer in a bag of water. Once it is frozen, you will truly have an emergency credit card. The good thing is as you are defrosting the card for an emergency, you will really have a moment to decide how big of an emergency it is and whether you need to use the card or not.

 

With american express you have to pay it off every month. They don't roll over balances except for certain business accounts but I don't use them for that. American express makes their money on their membership fees. Their points and service is the best, especially when you move up to business gold or platinum. Then there is always the legendary Amex Black that I want to have some day.

Someone else told me about them accepting mortgage payments for points but I have not heard anything from Amex about it.

 

Holly, 12% is ridiculous. What you need to do is open another credit card account that does balance transfers for 12 months at 0%. They are everywhere. I get them in the mail almost everyday.

They will transfer your entire balance to the new card and give you 0% interest for a year so you can pay it off. Don't use the card in the meantime.

As for the old card, don't close the account. Just cut the old card up. It actually hurts your credit to close a revolving credit account. Also, once you let the account go dormant for a while, they will start offering you better terms as they will figure you have gone with another bank.

 

Correct on all accounts.

NEVER cancel your card. Old lines of credit help your credit score. Just cut the damn thing up. By the time your NEW 0% card's initial offer is over, the OLD cards will be begging to take you back...probably with another 0% offer.

And Holly...put your savings in an ING online account. It links to your checking, but takes 24 hours to access the money. Great interest rate and no fees. The 24 hour delay SHOULD keep you away from it!

 

The AMEX card I have doesn't require me to pay it off each month. I do anyway, but it doesn't require me to. It's one of those hotel reward AMEX cards. The best part about that card is the online payment feature. I can dispute a transaction online and it's worked every time I needed to do so.

 

I am talking about Amex small business cards. They have a great points system but require you to pay in full every month to get them. Online and over the phone, amex is the best customer service.

 

I used to play that game switching my balance around to low or no rate cards. That was great until I got to the point that my debt to income ratio was poor and my credit suffered enough to prevent me from getting any more of those cards. Now I am stuck paying high rates....

 

I'm not recommending playing the shell game with multiple cards. I'm just suggesting that she do a 0% balance transfer and use the 12 months to pay it off interest free.

It will give her a cheap way to pay off her balance and get her a new lower rate on her old card or the new one.