Posts Tagged ‘debt ratio’

Coming out of Avoiding Negative to Gaining Positive mode

January 5, 2008

I was hesistant the other day to put purchases on my SWA credit card because I didn’t want to go back into a credit card debt.  So I put a few things on there (gas, groceries,etc) and immediately paid it from my checking account.  Now that I got a lot of the 16% debt down (see previous blog), I am aggressively putting all my bills on there and including my wife’s bills so I can get free airline tickets.  Basically, I gotta spend $16K/year to a free ticket.  Which is basically a 2.5% return on purchases.  I valued the ticket at $400 because of the flexibility.

This is in essense passive income because I’m spending the same amount as I would have otherwise, but now I’m getting something back.

Let me know if you find a better cash back card.

End of Debt Consolidation Tunnel Starting to Emit Light

January 4, 2008

Today was a breakthrough that gave me a little bit of piece of mind.  I was supposed to pay about $350 tomorrow for my Bofa CC which had about $9K on it.  I missed the payment last time and it knocked me back a bit mentally.  But they went from $135/mo to  nearly $400.  I paid $130 a few days back which they vollied back to me with a 5 extra day grace period, but was still insistent on the full amount.  I started my hsbc card a few days back along with my 2nd wamu and 2nd chase cards.  Then the hsbc card came in the mail approved (0% til 12/08)!  Then I logged onto the bofa acct and about $2400 was paid from my wamu 1 cc.  So the nervousness about that amount instantly vanished.  The balanced dropped down to about $6K.  Then transferred another $2.5K to my hsbc which should go through w/in a week or so.  So interest per year went from $1800 to $1400 (monthly: $156 to $121) on just the 16%.  I’ve got 2 more pending cards with 0% hopfully approving soon.  I’m assuming that together it’ll be about $5K.

So then I will transfer the remaining bofa debt to the $4.7K debt on the usaa (limit $13K) and then transfer all that back to the bofa at 5% for the life of the debt. Then that will be my highest interest rate.  Not bad eh.  It all happened within one month.  Well, not really, as I spent the whole year making sure I paid my cc’s on time which allowed my fico score to go up by 100 points.  That allowed me to get the 0%s.  My debt ratio is about 40%.  If my second wamu card comes through, then I’ll use it for my checking overdraft and not really put anything on there.

Also, I told my wife that I will transfer her 18% over to one of my 0% cards, but that doesn’t look possible right now.  I can put it on my 5% card in about a month.

I can’t believe that this is just a simple game of chess.  Not at all like playing Kasparov.

Why did I neglect this for over a decade?!?!?!?