Time to Rollover My Credit Card Debt

I’m not interested in playing credit card arbitrage, but it looks like I’m going to be engaging in it whether I like it or not.

If you notice I updated my debt progress bars… we had to put more money onto another of my credit cards… with a nearly 15% interest rate. This happened for two reasons: 1) Mr. A bought machinery for his business which increased his business debt. Perhaps I shouldn’t include his business debt since this is a personal finance blog. 2) Mr. A’s previous employer hired him to do a job but has terms of Net 30.

We could have negotiated for 50% down and 50% when the job was completed, or payment in full when the job was completed, but a number of factors swayed our decision.

Mr. A believes that his previous employer is the type of person that will give him more business, if he doesn’t “rock the boat”.

Also, he felt it would make us look more prosperous, if we could do business like everyone else does. After all this is his ex-employer, who loved the work he did, but wasn’t willing to pay him more than $15 an hour. So it’s like a pride thing.

I can understand that. I sat down and figured out our money situation and we will make it financially until that money comes in if we’re careful with our budget.

Now, back to the credit card arbitrage. As far as I can tell, the expert in this field is Madison from My Dollar Plan. As of December 2007, her credit card balances were $223,270!

She says in this Credit Card Arbitrage Q&A post, that she applies for 10-15 new cards the same day. I’ve posted a comment to ask why she applies all in one day.

The last time I set out to transfer the balance from one credit card to another, it seemed to take me weeks. I will need to be a bit quicker about it this time. I hope I’m correct in remembering that the FIA credit card moves up to 9.5% interest in November. But as Madison says, in order to prevent having to pay interest fees, you have to know exactly when to pay the card off.

Once I got my nerve up to apply for the card, the company only gave me $4000 credit. I have other cards that have much higher limits, and my bank gave me a $20,000 line of credit recently, which we haven’t touched. My “personal banker” said she was giving it to me, “just in case.” The interest on the line of credit is 9%. Anyway, I’m not sure why the card limit was only $4000. It shouldn’t have been due to my FICO scores which I haven’t checked since October 2007 when they were all over 800.

I wondered if it would be possible to raise the limit, but I wasn’t sure it would be okay to ask. Madison says the way to increase the limit is to reallocate funds from one card to another, but the cards have to be from the same company. I actually have three cards from Chase, and I did that one time, but not on purpose. Actually what happened was I needed more room on the card, and when I called to see if they could raise my limit the guy said he saw that I had another card with them, with a zero balance, and he could move some of that card over to the one I needed more money on. Does that make ANY sense at all?

Right now I need a card to move the 15% interest card over onto. By November I need to move ~$8000. So I guess I need to apply for one card now, and at least two cards in the next six weeks. I wonder if I should just apply for all three right now. Madison, since you’re getting to retire at the ripe old age of 29, do you have any suggestions for me? 🙂

Yours Truly,

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2 thoughts on “Time to Rollover My Credit Card Debt

  1. I would call the company that has the card @ 15%, and let them know you’ve got offers for balance tranfers at a much, much lower rate (let them figure out how low by offering you their best deal, rather than giving them the amount). See if they will lower the rate without you having to transfer the money… even if they only knock a few points off, it might end up being cheaper than what the transfer would cost.

    Also, beware of the 3% transfer fee that comes along with most transfer offers… some of them set a *minimum* of per transaction, which could end up being more than 3%…

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  2. GoliathDebtor – that’s a good suggestion, I will keep that in mind if Plan A doesn’t work out. I have an offer for 0% interest for up to 15 months, *no transfer fee*, no yearly fees and I already have a card from this company which has a zero balance and $13,000 limit. Once I apply for this card, I’m going to see if I can get them to reallocate the new card with $12,000 from the old card, a suggestion that Madison makes. Thanks for visiting and commenting! 🙂

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