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Author: ClimbingOut One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308557  
Subject: Re: 1st time poster Date: 9/15/2005 3:10 PM
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Call your credit card companies RIGHT now and find out three things:

1) What is the formula for my minimum payments right now?
2) What is the formula for my minimum payments in the future?
3) What date is the minimum formula changing?

You need to know this information always. It's not something that changes frequently like your interest rates but it does change.

For instance, and this is pretty common, on one of my CC today the minimum payment formula is interest on 30 day average balance + 15. On December 31st that changes to interest on 30 day average balance + 1% of average daily balance.

If you go into this with the idea that your payments are going to double, you have the wrong idea. Yes your payments are going to be higher, maybe doubel, maybe less maybe more. Why don't you know what it is going to be? Why aren't you calling them? :)

Refusals to lower the rates could be based on many things. Maybe they are just annoying jerks like my BofA card. Maybe you have a history of late payments, Maybe the overall debt balance is too high. Ask them why you aren't eligible so that you know when you can reasonably make another request and have it granted. Keep asking them for a rate increase at least once a quarter until they give in. Then ask for another.

Do NOT transfer a balance to a card that already has a balance (oh that I would learn this myself). You will just end up locking in the existing balance at the current rate (and of course it's variable). Know the rules of the balance transfer. How much is the fee, how long is the rate good for. What will your minimum payment be? What balance category is the transfer going into (be careful that it doesn't end up in category D "Cash/ATM") and what rate will it be at when the promotion expires? How is the fee paid? Is it added to the next cycles monthly minimum or is it financed and if it is financed, which category is it put in? If it's financed can you pay it up front to avoid adding it to a bad balance category? Beware of non-capped fees that end up in Category D because you just screwed yourself.
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