If you have a Navy Federal Credit Union Visa card...

[K Frame]

check your interest rate.

Mine was at 10.9%, and I noticed today on the website that rates are "as low as 7.9%" depending on credit score, etc.

Well, my credit score is about as good as it gets, so I called them up. I was expecting a run around, but in less than a minute I got my rate reduced from 10.9% fixed to 7.9% fixed.

[280plus]

Holy crap!! Thanks Mike! I'll check today. The last time I tried to do that they wanted to raise my limit to $10,000 but I wouldn't let them. I'll check again.

[HankB]

[preach mode]Unless you have to use a credit card to cover an unexpected emergency, you shouldn't be paying ANY interest - paying it off in full each month is the only responsible way to routinely use a credit card. [/preach mode]

[K Frame]

Hank, stuff it.

Not everyone is able to remain in the blessed, Godly light with a halo of 0 balance shining over their heads.

Your situation isn't the same as my situation, and neither of our situations is the same as 280's.

This thread is my advice for those who have a specific credit card from a specific issuer.

[280plus]

Zero balance? What is this zero balance? 

Actually, I use the NFCU for every day stuff. Because it IS the highest rate of all my cards I try to pay it to as close to zero as I can each month, so I don't usually pay a whole lot of interest on it. Any chance to reduce the rate even further is always welcome.

Things like $25,000 septic systems and $6000 driveways and $8,000 college expenses (among other things equally as practical) make it tough to pay things off on a monthly basis.

[Firethorn]

This thread is my advice for those who have a specific credit card from a specific issuer.

While, in your case is from a specific user, I'll point out that this is actually true of MOST credit cards.  It's a known fact, presented in many finance articles and financial management training programs that if you have a good record with your CC company, you can often call to negotiate a lower interest rate.  

While I am one of the holy zeros*, I can understand perhaps having to carry a balance occasionally.  If you have to do so, having a ready credit of like 8% is better than 11%, which is better than the default 21% of many cards, which is better than payday loans and pawn shops.

Heck, at 8% in an emergency I'd put the money on my card rather than pull it out of my investments(currently down), as I figure they're going to recover more than .7% a month in the next couple months.

What would I define as an emergency?  Well, if my furnace suddenly failed, costing $3k to fix.  I  can pay that off in ~4 months, but I can't do without heat in March, much less February in ND.  Medical expenses.  Sudden death in the familiy(quick plane ticket home).  Stuff that I can pay off in a couple months, but are beyond my monthly flex(known as 'no future car contribution' or 'no contribution to the Roth this month' which is okay since I was contributing $400/month, which maxes out the roth in 10 months).  $700/month in 'emergency or invest' allows me quite a bit of slack.

1. No/reduced optional contribution to investments(still have 10% contribute to tax-deferred accounts). < $700
2. Less than a month CC debt < $1400
3. Short term CC debt < $3000
4. Pull money out of emergency fund < $12k
5. I'm in trouble.  > $12k

*I have a house payment at 4.75%.  Monthly payment is less than 10% of my income.  I could pay it off next week, but that would require killing my emergency/early retirement/new car fund.

[K Frame]

"Things like $25,000 septic systems and $6000 driveways and $8,000 college expenses (among other things equally as practical) make it tough to pay things off on a monthly basis."

Well OBVIOUSLY you're just not managing your money well! If you were you'd have paid those off with pocket change while investing triple that amount in Consolidated Blumpkins!

[Firethorn]

Couldn't you have put the driveway and septic system into a home loan?  They are capital improvements, aren't they?

And what kind of septic system costs $25k?  (Does some research...)  Oh, it's within reason, OK.

College expenses, if possible, should be in college loans, not CC debt.  Unless the CC is lower

[Dannyboy]

Well OBVIOUSLY you're just not managing your money well! If you were you'd have paid those off with pocket change while investing triple that amount in Consolidated Blumpkins!

Just out of curiosity, do you know that a blumpkin is a kind of fairly gross sex act?

[K Frame]

"Just out of curiosity, do you know that a blumpkin is a kind of fairly gross sex act?"

 

Of course I do. Why do you think I chose the term? I think there's just something extremely humorous about a company named Consolidated Blumpkins...


"And what kind of septic system costs $25k?  (Does some research...)  Oh, it's within reason, OK."

I'm glad you did some research. You ought to try checking out the design and installation price of a sand mound system. Most states require that a civil engineer design and certify a sand mound. My Dad was a civil engineer. Living in a semi-rural area with questionable soil conditions and/or high water table conditions in much of it, he designed a LOT of sand mound septic systems over the years.

"College expenses, if possible, should be in college loans, not CC debt.  Unless the CC is lower..."

Couple problems with that concept.

1. Not all college expenses are bookable to loans. New clothes for college? That's a college expense, but chances are you won't be able to get a college loan to cover it.

2. A credit card, even if the rate is lower, probably isn't a great place to park tuition and room/board costs. Interest on credit cards compounds; interest on most other kinds of loans is simple interest.

[Dannyboy]

"Just out of curiosity, do you know that a blumpkin is a kind of fairly gross sex act?"

 

Of course I do. Why do you think I chose the term? I think there's just something extremely humorous about a company named Consolidated Blumpkins...

Just checking.  I thought it was pretty funny, myself.

[Grandpa Shooter]

What's a credit card?

[K Frame]

What's a credit card?

Well, for some people it's a necessary crutch.

For others, it's an albatross.

For others still, it's a luxury.

For a scant few it's an implement of Satan's might in America today.

For me? It's a TOOL.

Like a power saw, if you use it wisely, it's going to help you immeasurably. Use it foolishly, and you're going to bleed big time.

There's a reason why my credit rating is pushing 800. It's because I've used tools like credit cards judiciously and with an eye towards the big picture of what they can do for me, not just "OOOOOO! Shiny bauble, I'll pay with shiny plastic!"

[Firethorn]

2. A credit card, even if the rate is lower, probably isn't a great place to park tuition and room/board costs. Interest on credit cards compounds; interest on most other kinds of loans is simple interest.

Are you talking about student loans where they simply charge interest on the principal while you don't make payments until you graduate?

I always look at effective EPR anyways, so whether 7% componding is more or less than 8% non-componding is a task for the calculator, or at least looking at the loan documentation.

By the way Mike, great little ditty on what a CC is.

For me, I'd say it's a tool as well.  It's not a tool everybody can use responsably, but in some ways handier than a pocketknife, and more useful than a leatherman.

[Brad Johnson]

I have a card for personal stuff and a card I use strictly for busines.  Much easier that way, especially when it comes tax time.

It isn't unusual for a CC company to give you a little incentive if you call.   Usually it's the option of a slightly lower long-term rate, a very low short-term rate, or an increase in your line of credit.

Brad

[280plus]

I'm glad you did some research. You ought to try checking out the design and installation price of a sand mound system. Most states require that a civil engineer design and certify a sand mound. My Dad was a civil engineer. Living in a semi-rural area with questionable soil conditions and/or high water table conditions in much of it, he designed a LOT of sand mound septic systems over the years.

Yes, we own lots and lots of sand now. An unknown number of truckloads to be exact. The BOTTOM of our distribution boxes had to be 3" higher than the existing ground level. Then we had to bury them.

I have one card that has ~$2000 at 6.99% The rest are 4.99% and less. A good chunk is at 2.9% and another good chunk is at 3.9%. I owe a bit but at very reasonable rates and that's because I took my highest rate loans and moved them into lower rates as the opportunities presented themselves.

The thing that has set me back though is unexpected medical expenses. Besides all the doctor money I laid out they have me on enough meds to choke a horse and just the copays are costing me $200 a month. So there's a bunch o' cash that WAS earmarked to help pay this stuff down that has to go elsewhere instead.  

[K Frame]

Oh hell, 280, I figured you were a dead beat! 

I know I could get lower card rates with some issuers, but there's a reason why I keep my main card at Navy Federal... it's my primary financial institution.

I have an Amazon card that gets paid off after I use it. It's a rewards card. I just got my latest $25 certificate, which I just today turned into a new oil filled radiator heater. The one I have in my bedroom is making some very suspicious smells right now... VERY 'oily,' smelling, which makes me think it might be developing a leak. Also, the one switch is shot. Can't complain, I got it used in 1991 for my office at NRA. Paid $15 for it; I should say NRA Publications petty cash paid $15 for it. When we moved to the new building, anyone who had a heater or a fan could take it home.

[K Frame]

Oh, BTW, 280...

University of Michigan has some neat plans and ideas on how to conceal an elevated sand mound system with landscaping.

[280plus]

Right now we have a nice steep slope at the back edge. I want to fill it in and taper it back a little more but the wife and her best pal planted some stuff that's supposed to cover it so we don't have to mow there.  The only good part is what used to be our sloping yard is now flat and level, back to a point. The other sad part (besides the cost) is they had to pull the HUGE maple tree that was back there. No more shade. Apparently it had invaded the old system and had been living very happily on,,,well,,, you know... 

[mike]

"Things like $25,000 septic systems and $6000 driveways"  If you did away with that fancy indoor plumbing and used cinders on your drive you could save a bundle!!

[280plus]

I'm ok with that but try and get it past the wife... 

[MillCreek]

To my everlasting regret, I just had to Google 'blumpkin', being unfamiliar with the term.  This now ranks high on my list of things I did not need to know.