Friday, 15 August 2008

I Must Be Doing Something Right

In the last week or so I've had three letters from my numerous credit card providers.

The first one offered to switch my card over to a Platinum card, oooh Platinum - shiny! The old me might have been tempted, but the new me checked the fine print and found that the interest rate was over 7.5% higher than I’m already paying, and the ‘benefits’ are of no interest to me or my lifestyle. So thanks, but no thanks.

The second one was offering to double the credit limit on that card, but the interest rate is 19.89% so why would I want to do that? Not to mention it’s one of the cards I've already paid off, so thanks, but no thanks to your ‘generous’ offer. Reminds me I must cancel that one this week, probably not what the bank was hoping I'd do.

The third one offered to increase my limit by $6,000. Like I need more credit at this point! That said, I did consider this one for a moment as the interest rate on this card isn't too bad, it's only 10.49%, so I could potentially balance transfer one of my other higher interest cards (my current focus card is 13.99% for example) and save on some interest charges while I pay them both off?

Even if I do nothing, it’s good to know I’m doing something that is working in my favour. I figure the more debt the banks want to get me into, the more I’m on the right track by getting rid of it!

Credit cards work differently here in Australia to how they do in other countries, like the US. Your total available credit limit impacts your borrowing power for things like mortgages and car loans, so it’s actually better to cancel cards as you pay them off or reduce your limits as you go, just as Ugly Debty has been doing. I guess I’m becoming a ‘preferred customer’ myself these days!

What do you think? Just say no, or should I take the offer and consolidate and save some interest?

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  1. I'd take it and save the interest, and keep cancelling the cards as you pay them off.

  2. Is it 10.49% on balance transfers for the life of the transfer? if so, I'd take it and consolidate. It also "feels" nicer to have less cards. Doesn't it make you just want to ask them to read your blog?

  3. I am looking into consolidating my cards to one of the low interest rates cards. I only problem is if I can't get the balance paid off by the time the low interest rate offer expires. This whole mess I am in scares me to death. You can take a look at my blog. I am new to this but I have to start somewhere. Taking responsibility is my firt step. The second step is to implement a plan of action. I have to get those interest rates lower and work on consolidating the number of cards. I have ripped up all my cards that this point. Any suggestions you have would help.


  4. @DebtLessDuty - I'd start with finding out exactly where you stand with each of your debts, and make sure you're up to date on all of them. Then I'd suggest listing them from lowest balance to highest, and after paying the minimums on each, throw everything else you have at the lowest balance.

  5. jerry@leads4insurance.com12/9/08 18:15

    Just keep them up to date so it doesn't lead to higher interest down the road and that will make a huge difference. As long as you are making progress like this you will have some insurance that you can reach your goal, no matter which route you choose to follow. Good luck!