Wednesday, February 20

Incentive Credit Rates Making Sense

I find it hard to believe but I'm finally looking at a situation in which it makes sense to take advantage of temporarily low credit card rates.

To give you a bit of background, I've been forced to quietly carry some credit card debt for years now. Luckily, I do have a low interest credit card, but it's still a noticeable drain on my finances. Anyway, as my last post suggests, I've been offered a good job. This means I've finally broken down and decided to move to a city that actually has a demand for my skills.

While this is terrific it does mean that I'm going to have a lot of expenses to deal with. I'll have to find someplace to live and that generally means paying two months rent up-front. Until I find a permanent home I'll have to stay somewhere -- and I don't intend to live out of my car for any length of time. Hmm, I'll have to spend a lot on gas until I've finish relocating too. In short, there are a million little things that are going to cost me extra for the next month or two.

The plan?

Pay off a large chunk of the existing debt on my credit card. Then, I'll pay for all these new expenses using the same credit card while I have access to very low interest rates. Either way, it's the same cash out of my pocket. So, by funneling my payments through the credit card I'll end up with the same total balance but it will be financed at a much lower interest rate.

Once I get settled into the new job and get a few paychecks under my belt I'll be able to whittle away at my debts. It should be interesting to see what happens when a decent income collides with frugality instincts honed by half a decade of living with less. I can't wait!

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6 comments:

ihadtocomment said...

i hope you dont think im being too personal but did your gf and new baby live in the car with you? or was it a matter of staying in different cities while you looked for a job...

Frugal Guy said...

LOL, no.

Anonymous said...

You could try weekly budget motels that include food,shower,tv,cable tv and mail ect.. for cheap until you can find a place. You could also do a debt consolidation loan after being on the job for awhile and get your debt down. There is also Consumer Credit counseling that could reduce payments and debt. Good luck and Congratulations!! Did you know David Letterman and Jim Carey lived out of thier cars for a long time??? Don't be ashamed!! YOu will make it!!! Annette

Frugal Guy said...

Hi Annette, thanks for the note. Those are good ideas - and I've probably done most of it at one point or another.

For example, I just got some temporary shared accommodation which will be fine for me until we can all move into a new home here.

On the credit side, several years back I had to default on payments to all creditors except my bank. Eventually I was able to contact my creditors and make a deal and get those defaults cleared up.

At this point the only creditor I have is my bank. They offer a line of credit and a credit card... which have been extremely important to keep over the years.

Perhaps more information than most people might need, but I've mentioned things like having a "selective defaulting plan" so I don't mind sharing that I had to do that myself.

Presumably though, all that is now a thing of the past!

And no, I didn't realize those guys lived out of their cars. That's awesome, thanks for telling me that.

Anonymous said...

Have a great weekend and I hope your good luck keeps up!! Things are getting better for me with all of your helpful tips! Thanks, Annette

karibear said...

There is another way to get around the credit card interest thing. There are a lot of cards that offer six or more months of interest-free usage, and that includes transferring balances from other cards. Then you can do it again before the 'free' time is up - and hopefully, by then you'll have paid it off.

As for the living in the car, BTDT. It's a lot easier if you have a small pickup with a camper on the back, then you can actually SLEEP. When I did it for the longest period, about 6 months, there were 2 of us, along with 5 large dogs. It's impossible to find a rental that will take that many dogs, and we eventually traded the truck for a mobile home. Much earlier I lived in an MG, and that wasn't nearly as comfortable. ;-) And maybe, just maybe, it will have a propane stove and you can do a limited amount of cooking. It's a trade off, the cost of gas against comfort, ability to cook, hot coffee, etc. But people still do it - plus, depending on your ISP, if you have WIFI, you can hook up almost anywhere.