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Author: BorderPatrol Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308881  
Subject: "Tool" advice, please. Date: 4/23/1999 1:03 PM
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*sorry for the long post*
Hello to all the CC regulars, and other lurkers. I'm new to the message board area, though I've been reading the Fool web articles for a few months.  I have a specific question which I'll ask first, and then include other background info for those who want to know "the rest of the story."  Thanks in advance.  I'm excited to jump into the CC group!

The Question: Just yesterday, I received "The Offer" -- 3.9% on balance transfers until May 2000 with Citibank, and no anual fee (of course, the rate on new purchases is much higher-15.65%).  I have $4,500 on an MBNA at 13.9%, and I hope to transfer as much over to the Citibank as possible.

I'm definately of the thought that credit cards, and credit in general, are tools that should be used Foolishly to thier maximum advantage.  Don't fret, I don't think that carying a balance on a credit card is ever advantagous... but I wouldn't mind playing the frequent-flyer game at a later date, like when I have cash on hand to make major purchases.  (More background details below.)  

Back to my problem--I have not called Citibank yet, though, because I'm worried that they won't clear me for a 4.5k credit limit, since my credit is pretty high.  I have a car loan and a school loan, and four CC's -- MBNA(9.4k limit), Discover (3.5k limit), USAA (2k limit) and CapitalOne (400.00 limit).  I know what you're thinking.  Four cards!  More foolosh than Foolish.  BUT I only cary debt on my MBNA, and I pay the others off monthly.  I just got the USAA, mainly for emergencies only. I bank with them, and have a debit card I prefer to use, and my long-term stratigey (sp?) is to have this as my principle card for convienence.

Just yesterday, I nuked my CapitolOne (who needs 'em?) and had MBNA lower my credit limit to 8K (they receintly raised it to 9.4k from 8.4k... how kind of them).  I'm pretty certain that I want to go adead with the Citibank card, and transfer as much as I can from my MBNA.  (Any comments/concerns about this?) I think it would be smart to wait a week or so to call them, however, just so that when Citibank sets my credit limit, they will see that (1) my CapitalOne is closed, per my request ;), and (2) my MBNA credit limit is down to 8k form 9.4k.

Should I wait to call Citibank, or am I just being too concerned about all of this?  Also, is Citibank a *particularly* horrible outfit to work with?  I'm anxious for any advice/comments you may have.  Thanks.

--
Extra background info.  Sorry again for the long post, but you may want to also know that...
I spent last night going over old CC message board posts from the last 2-3 weeks or so, following a few of the old threads, so that I could jump in with the flow.  I'm very excited to be participating.  I'm a message-board neophite, so please be patient with me!  You all seem like a great, helpful, lively (read "pleasantly opinionated") group.  I'd go on with how great you all are, but then someone would have to put a fork in me!!

I'm 28, and I just got out of law school.  Like a few others, I ran up the CC's in school, and I've been paying them off as fast as I can ever since landing my first "real" job.  I have lost of school loans, but the rate is low, and my life-time earning potential has greatly increased, so I don't mind the school-loan debt.  The CC debt has to go, however, ASAP.  This is particularly true because my feiancee (ouch! sp?) is extremely debt adverse.  She gets hives just thinking about all the bills she is marying into. No need for a pre-nup for me! (I never would, anyway).

Anyway, thanks for your advice with my problem.  I'm all ears.
--"Border Patrol"  (aka Gino)
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Author: IndecisiveFool Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9104 of 308881
Subject: Re: "Tool" advice, please. Date: 4/23/1999 1:20 PM
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Your message is not too long, just too wide. :)

Just be sure to not check the Table Data box when submitting a post.

..IF

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Author: SpaceEngineer Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9105 of 308881
Subject: Re: "Tool" advice, please. Date: 4/23/1999 2:25 PM
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Your message is not too long, just too wide. :)

Just be sure to not check the Table Data box when submitting a post.

..IF


...or use a carriage return from time to time.

I think you may be overly concerned about what Citibank is going to think. There's also no telling how long it'll be until reducing the numbers of cards and credit limits shows up on the credit reports - or even if it'll show up -- they are not required to report anything to the credit reporting agencies (CRAs). (This is why it's a good idea when you do something like that to specifically ask them to report it....and to check your reports from time to time and contest any inaccuracies with the CRA.)

Anybody else have an opinion or experience. I doesn't seem to me that the $1400 reduction in credit is a grossly large amount compared to your overall available credit.

I have the same offer from Citibank. Don't dilly-dally, because I recall it was a limited time offer. (I'm not taking them up on it because I have nothing to transfer.) If they don't approve you for the entire $4500, they should transfer the amount of the limit. You'll still be ahead, and since the minimum payment on each card is probably a percentage of the balance, and each probably 2-3%, the total of your required monthly payments shouldn't suddenly increase. (And you are paying more than minumim anyway, aren't you?)

Not getting a limit on a balance transfer equal to the transfer requested has hurt some people. For example, you have $7000 remaining on your 7% car loan, and are paying $300 a month. You decide to transfer the loan to a 3.9% CC deal, but they only approve you for $5000. Now your minimum payment on the CC is $150/mo., and because you still have principal on the car loan, you still have to pay $300/mo. on that, for a total of $450 a month now. You've accelerated payment on the debt, which will save you money overall, but if your monthly income can't handle the other $150/mo. then you're in trouble.

Congratulations on you engagement and being blessed to have a fiancee with an aversion to debt.

John

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Author: WildcatFool One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9110 of 308881
Subject: Re: "Tool" advice, please. Date: 4/23/1999 3:16 PM
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Welcome to the boards! And congratulations on your engagement!

I, too have an MBNA card, and so far they're my least un-favorite CC company. They've generally been fair with me. Citibank we've not been so lucky with (mostly selling our name, not Customer Service problems).

What I'd do is call MBNA and get them to lower your rate. I've done this twice, and all it's taken is the usual "I've got another card with a fixed lower rate. I like your company but I'll move the money in a heartbeat for the lower rate I just got from these other guys." threat. Both times they've offered me the current teaser promo (4.9%, 6 months). Not as good as a permanent rate drop, but the CS agent even said, "Call back in six months and we'll se what else we can do."

This move will get your teaser rate with a single phone call and eliminate the hassles and risks of a balance transfer.

Get the Citibank card anyway, though, so you can use it if MBNA either refuses or, when the teaser's up, won't give you another teaser.

Good luck!

Unrelated Happy Dance: My wife just got a 7.5% raise! Even more dirt to bury those debts with!!! Woo Hoo! :-)

WildcatFool
:-)

Disclaimer: I've also never *been* a problem with MBNA - no late payments or anything else... a "good" customer with about $10k+ generating income for them :-(


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Author: NoDepression Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9123 of 308881
Subject: Re: "Tool" advice, please. Date: 4/23/1999 4:53 PM
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Your message is not too long, just too wide. :)

Ha! Quite amusing!

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Author: TMF2Aruba Big funky green star, 20000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9124 of 308881
Subject: Re: "Tool" advice, please. Date: 4/23/1999 4:55 PM
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Your message is not too long, just too wide. :)

NEVER....NEVER use this line when answering a wife's question of:

"How do I look?"

; )

Tony
...but I still am...

Off2Aruba

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