Further Developments
Ξ February 6th, 2008 | → | ∇ Budget, Debt Payments |
BofA has changed its mind. Now they love me after all.
It’s amazing how when you drop your balance down a month away from zero they suddenly take interest. Was it really only a week or two ago that they decided that I was only good for 18% interest? Ahhh, but now my balance has dropped by over $6k they love me again. I got a letter in the mail from them today with the cash advance checks included. If I use the checks, the amount I use them on is 1.99% interest until Jan, 09. Even if I make them out to Cash.
That means that I could pay off my Student Loans with them, effectively freeing up about $600 per month in extra Snowball Ammunition. That means that I could throw a SmackDown at the Air Conditioner with my Income Tax Refund, followed by a thirty day payoff (or thereabout).
I can only see two problems with this idea though:
1) The proportion of debt to balance would be about 90% on that card, and it would hurt my credit rating until I brought it down.
2) The balance that is already on this card would be paid off after the 1.99% portion, so I would be stuck with the interest on it every month, although it only works out to about 20-30 dollars per month for it.
and potentially, 3) If I were to be late on a payment the entire balance would go up to the current 18% rate.
The benefits include: 1) Adding an immediate $850 per month to my debt snowball, minus the new payment to BofA (rough estimate $250 per month) for a net increase of about $600 per month added to my debt snowball.
and 2)Getting rid of Sallie Mae once and for all. To me, Sallie Mae is one step under the IRS, because if you should ever default, they can put a hold on your state license, which I need to work. To be honest, I would rather pay a higher interest rate to be rid of dealing with her. But in this case it is much lower than what I was paying her, so I still come out ahead.
Neutral is: 1) The balance transfer fee is $90 maximum, but the monthly debt interest payment to her is over $100. This not only neutralizes the balance transfer fee, but also the interest that I would have to continue paying on the current BofA balance.
I believe that this is really a winning situation for me, and I intend to initiate the cash into my bank account tomorrow, and send in a giant payoff on Monday or Tuesday, whenever my current Sallie Mae balance posts to my account.
That is, unless someone on here can explain why this would be a bad idea to do. I don’t really see a downside to it though.
on February 7th, 2008 at 6:51 am
I see no problems. It is a great offer, especially when the cost is less than the incurred interest from Ms. Sallie.
on February 14th, 2008 at 8:21 am
I got something like that too with Capital One. I begged them for months to reduce my rate after they hiked it up, to no avail.
Then I got some money and was able to pay off the card,…then not even two weeks after taking the card to zero I was magically given a 0% balance transfer offer for 12 months. Fairy dust!!!!!