Credit Card

The Worst of RoomsSo you might be wondering, “Brainy, how on earth are you going to pay for a $33,487.70 renovation when the last time I checked, you only had $16k saved up?”

Well, we’re going to split it — half from savings and, since it worked out so well on the siding project, half on a credit card… my wife’s credit card.

You know, with her superior credit score and all, the single credit card she carries has a better offer on the table right now than any in my arsenal.

We’re going to go with $17k at zero percent for 12 months with a 2% ($340) transaction fee.

Here’s my super conservative plan on how we’ll wipe that one out with $750 monthly payments:
Proposed Payment Plan

Using this super conservative payment plan, we’ll pay over $1k in interest (which doesn’t exactly make me all warm and fuzzy) but the pace is so conservative that I’ll be able to rebuild my savings rapidly at the same time.

If it gets to the point where I can’t handle the idea of paying the interest, well, my savings will have grown enough so that I’ll be able to pay it off in full — if I want to.

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Building my Credit.Okay — so it seems that inactivity has reared its ugly head. I had two plastic casualties since the last time I did this — nearly a year ago.

As a result, I sorta “lost” $29100 in credit.

I’m not worried about it though, I mean, I hadn’t used (or even planned on using) either card for a number of years…

Still, though, there isn’t *any* good news to report here.

I “lost” two cards and the rate on one of my remaining cards went up.

Here’s the updated list:

Bank of America Business MasterCard
Originally an MBNA account before they were bought out by Bank of America, I opened this account in March of 2005 when I started to divide my personal and business expenses and keep track of them separately. Turned out to be a great move as it was shortly there after I realized how much money I was bleeding on business expenses. I do not carry this card, but automatic payments are set-up for my monthly business expenses.
Current Balance: $0
Credit Limit: $26620 (No change)
Rate: 9.9% (No change)

CitiBank AT&T Universal MasterCard
I opened this account in April of 2007 utilizing a 0% for 12 months offer. I wrote a $6000 check to myself, which I originally dropped into my ING Direct savings account to jump on the “arbitrage” bandwagon. Shortly afterwards, I pulled the money out to finance the siding project. Now paid off, this is the card that I carry in my wallet for regular expenses.
Current Balance: $0
Credit Limit: $9500 (No change)
Rate: 16.990% (No change)

Chase Bank Visa Card
This was one of my first credit cards. I opened the account in 1998 and it was one of the cards that I ran up a considerable balance on before I got my act together. The highest it ever went was $12905 and that was in October of 2005. By August of 2006, I’d eliminated the balance, but continued to use the card for gas and the occasional purchase. Balance was always paid in full each month. In June of 2007, I took advantage of a 4.99% for the life of the balance offer to fund the siding project. In 2009 I put a big sticker on the front that says “GAS ONLY” to remind myself that I’m only allowed to use this card at the gas station. So far, it’s worked.
Current Balance: $0
Credit Limit: $19200 (No change)
Rate: 18.24% (Up from 13.24%)

Bank of America NHL MasterCard
Another of my original credit cards originally opened through MBNA in 1997 for a free t-shirt. This is another card that I mananged to run up a 5-figure balance on. In May of 2004, it topped out at $10915. By November of 2005, I had wiped the balance out. Now I have my internet service provider automatically bill to this card each month, and like clockwork, I pay back the $42.95 automatically on the same day using an autopay set up from the MBNA days. I do not carry this card and have not carried a balance since November of 2005.
Current Balance: $0
Credit Limit: $14000 (No change)
Rate: 15.99% (No change)

Bank of America Platinum Plus Signature Visa Card
Originally opened in March of 2005 as a failed plan to use balance transfers to consolidate balances at a lower rate. At first I transferred $5000 to this card. Evidently, not having learned my lesson the first time, I transferred another $5000 to this card in March of 2006. Luckily the rate was only 6.25% for both transfers. I wiped out the balance, which topped out at $6925 in March of 2006, in January of 2007. I do not carry this card and haven’t used it since January of 2007.
Current Balance: $0
Credit Limit: $0 (Poof! This account disappeared!)

LendingTree Bank of America GoldOption Loan
This was a loan for $10000 I took out in December of 2002 to, again, consolidate a few balances and put some much needed cash in my hands. At the time, it was LendingTree.com that found me the loan at 9.9%, and when the big check made out to me came in the mail, it was from MBNA. After a couple years of paying it down in regular $226 intervals, MBNA sent me a credit card attached to the account and started treating it like a credit card. With each month, the rate would rise another half percent or so. Not cool. I made my final payment in March of 2005 when the rate had climbed to 13.24%. I do not carry this card.
Balance: $0
Credit Limit: $0 (Poof! This account disappeared!)

In past reports, Chase Bank has been the big winner. BoA would cut my rates, Citi would jack my rates, and Chase would just keep on plugging along, you know, business as usual.

I guess it had to end at some point — Chase has now bumped my rate up — but BoA is still the big bad guy for dropping those two accounts.

Citi? Well, they grind my gears and I’m ashamed to admit that I *still* carry their card.

Anyway, here’s the token recap of past roll calls:

» Jun 2007 : Limit = $98500, Balance = $13026
» Jan 2008 : Limit = $108400, Balance = $8125
» Apr 2008 : Limit = $110820, Balance = $0
» Dec 2008 : Limit = $111820, Balance = $0
» May 2009 : Limit = $98420, Balance = $0
» Apr 2010 : Limit = $69320, Balance = $0

Can this be called progress?

Or just a sign of the times?

I guess I’ll have to put that Maserati purchase on hold…

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Building my Credit.So let’s see how much all of the recent well documented credit troubles — limits, rates, and closed accounts — have affected my own credit.

Right now, I only know for a fact that my credit limit was cut in half on that one Bank of America account last month.

I called it a financial assault.

It hasn’t resulted in any financial hardship but it did bruise my ego some.

I’ll get over it.

Anyhow, the last time I did this was in December (when I asked if I was in for a rude awakening as the crumbling economy had been nothing but good for my credit card accounts), so here is how things stand now:

Bank of America Business MasterCard
Originally an MBNA account before they were bought out by Bank of America, I opened this account in March of 2005 when I started to divide my personal and business expenses and keep track of them separately. Turned out to be a great move as it was shortly there after I realized how much money I was bleeding on business expenses. I do not carry this card, but automatic payments are set-up for my monthly business expenses.
Current Balance: $0
Credit Limit: $26620 (No change)
Rate: 9.9% (No change)

CitiBank AT&T Universal MasterCard
I opened this account in April of 2007 utilizing a 0% for 12 months offer. I wrote a $6000 check to myself, which I originally dropped into my ING Direct savings account to jump on the “arbitrage” bandwagon. Shortly afterwards, I pulled the money out to finance the siding project. Now paid off, this is the only card I carry in my wallet for things like gas.
Current Balance: $0
Credit Limit: $9500 (No Change)
Rate: 16.990% (up from 9.960%)

Chase Bank Visa Card
This was one of my first credit cards. I opened the account in 1998 and it was one of the cards that I ran up a considerable balance on before I got my act together. The highest it ever went was $12905 and that was in October of 2005. By August of 2006, I’d eliminated the balance, but continued to use the card for gas and the occasional purchase. Balance was always paid in full each month. In June of 2007, I took advantage of a 4.99% for the life of the balance offer to fund the siding project. I don’t carry this card.
Current Balance: $0
Credit Limit: $19200 (No Change)
Rate: 13.24% (Down from 13.99%)

Bank of America NHL MasterCard
Another of my original credit cards originally opened through MBNA in 1997 for a free t-shirt. This is also another card that I ran up a 5-figure balance on. In May of 2004, it topped out at $10915. By November of 2005, I had wiped the balance out. Now I have my internet service provider automatically bill to this card each month, and like clockwork, I pay back the $42.95 automatically on the same day using an autopay set up from the MBNA days. I do not carry this card and have not carried a balance since November of 2005.
Current Balance: $0
Credit Limit: $14000 (Down from $27400)
Rate: 15.99% (Down from 17.74%)

Bank of America Platinum Plus Signature Visa Card
Originally opened in March of 2005 as a failed plan to use balance transfers to consolidate balances at a lower rate. At first I transferred $5000 to this card. Evidently, not having learned my lesson the first time, I transferred another $5000 to this card in March of 2006. Luckily the rate was only 6.25% for both transfers. I wiped out the balance, which topped out at $6925 in March of 2006, in January of 2007. I do not carry this card and haven’t used it since September of January of 2007.
Current Balance: $0
Credit Limit: $15400 (No Change)
Rate: 13.24% (Down from 14.99%)

LendingTree Bank of America GoldOption Loan
This was a loan for $10000 I took out in December of 2002 to, again, consolidate a few balances and put some much needed cash in my hands. At the time, it was LendingTree.com that found me the loan at 9.9%, and when the big check made out to me came in the mail, it was from MBNA. After a couple years of paying it down in regular $226 intervals, MBNA sent me a credit card attached to the account and started treating it like a credit card. With each month, the rate would rise another half percent or so. Not cool. I made my final payment in March of 2005 when the rate had climbed to 13.24%. I do not carry this card.
Balance: $0
Credit Limit: $13700 (No Change)
Rate: 12.99% (No Change)

Hmmm… Seems that that one Bank of America account was the only one that was targeted. Yeah, it was my card with the highest limit, but I’d have thought that they would have slashed (or even closed) that Signature Visa Card account that I haven’t even received a statement for in nearly 30 months.

Last “purchase” I made on it was in March of 2006 — that’s over 3 years with zero activity. If there’s an account of mine that should be in their sights, it’s that one.

Taking the whole thing in, BoA slashed my limits a ton, Citi jacked my rates a ton, and Chase just delivered good news.

Hmmmm, I wonder which card I’ll start carrying next month…

For comparison sake, here’s a recap of how things have panned out in previous roll calls:

» Jun 2007 : Limit = $98500, Balance = $13026
» Jan 2008 : Limit = $108400, Balance = $8125
» Apr 2008 : Limit = $110820, Balance = $0
» Dec 2008 : Limit = $111820, Balance = $0
» May 2009 : Limit = $98420, Balance = $0

So, in essence, with my total credit line down to $98420, I’m pretty much right back where I was in June of 2007 — the first time I did this.

I’d be lying if I said that I wasn’t a little dismayed about falling out of the six-figure club.

At the same time, though, I’m quite happy that I’m not carrying a $13k balance (on the cusp of a $20k balance) like I was back in June of 2007.

Bank of AmericaSo all of this talk on the news about people losing their credit has finally hit home.

Apparently, based on the date of this notice I received from Bank of America, I was financially assaulted on April 24.

Seems that they held off on mailing the notice out, though, as I just received this on Thursday or Friday (and I only opened it this morning.)

Notice from Bank of America regarding my account.

Given the size of your credit line and the way you have historically used your account, we have adjusted the credit line on your card to $14,000.

Looking back on my last Credit Card Roll Call from December 2008, my credit limit on this particular card was $27,400.

A ridiculous limit — no question. But they cut it in half?!

I’m not really upset as I haven’t carried that card in my wallet since 2005, though I’ve still put my monthly cable bill on it since that time just to make it appear to be an “Active” account to the credit card company.

I do feel slightly violated though. I mean, back in 2004, I carried a $16,000 balance on this exact card. For months…

Historically speaking, I’d say that proves that I do indeed need a higher credit line than the one they’ve “adjusted” me to.

And they claim that the decision was based in part on a credit report that they pulled. I find that a little upsetting too.

First, the fact that the pulled a credit report — not to offer me something but to take something away that they’d already given me. Sorry, that rubs me the wrong way.

And though this was probably just a soft pull and won’t affected my credit score at all, the lowering of my limit by so much most certainly will.

It also baffles me a bit because I’ve seen my credit report and what I saw shouldn’t have resulted in this.

According to Experian, I have 17 open accounts, all in good standing, and not a single account with a late payment. They also listed that I’m a pro at carrying HUGE balances.

Listed alphabetically, my BMW Financial Services account was right up top. How many people do you know that can afford not to carry a huge balance on a BMW ? I’m certainly not one of them.

Though most my accounts were holding steady at $0 when I last pulled it, the credit report also listed when and what the high water mark was for each account — and it wasn’t that long ago that nearly all of them were well over 5-figures.

Basically, between 2004 and 2006, I was pretty deep. “Historically” speaking, that wasn’t a very long time ago.

Of course, though, the notice from Bank of America states that they based the information on an Equifax credit report.

They’re the only agency that I haven’t seen my credit report for because, well, their website sucks.

Figures…

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It pays to Discover.I’ve never carried a Discover Card.

To me, there has always been a social stigma attached to them that turns me off…

Maybe that’s just me?

See, I’ve only ever carried Visa and MasterCard.

I don’t feel privileged enough to carry an American Express card.

I dunno, those seem to be for people who think that they’re better than those around them…at least that’s what their 1980’s television commercials always conveyed to me…

They’ve softened the message some, of late, but they still have that obnoxious “Always a good decision” Sam Adam’s commercial feel to them… You know the one I’m talking about — the one that Sam Adam’s seems to have had successfully removed from YouTube. Damn them.

Though nearly 25 years old now, Discover is still the new kid on the block.

I remember when they came out. They had that catchy jingle (which oddly escapes me at this moment), a cool sun logo, and an application inside the back cover of every Sears catalog — which, at the time, was second only to the Service Merchandise catalog.

I wasn’t old enough then to actually have a credit card but I was old enough to know that I didn’t really want the one from Sears — the most embarrassing store to be seen with your mother in while shopping for back-to-school clothes..

Now before you start accusing me of contradicting myself as an elitist, there’s a HUGE difference between not wanting to be seen in Sears with your Mom as a 4th grader and acting like a pompous arse with a credit card that touts the idea that “membership has its privileges.”

Of course, AE commercials usually failed to make mention of the fees involved in becoming and remaining a “member”.

So along came the Discover Card. They never had fees. I don’t think they ever denied an application. And I’m pretty sure that they invented “reward” programs too. As a result, they attracted a less than desirable crowd.

Alright, fine, I say it…

Discover attracted the Sears crowd whereas American Express was attracting the Tiffany crowd.

Discover is like the anti-American Express.

MasterCard and Visa were, I dunno, the cards for everybody else. That’s where I felt that I fit in…

So anyway, back to the additional “reason” that I still chose not to carry a Discover Card.

The fellow immigrant at work frequently peppers me with trivia-like questions about the places I’ve been — many of which he’s been to as well.

He’s not actually testing me, though, I think he’s genuinely interested in what my answers are.

Today’s initial question was, “How many providences [sic] are there in Canada?

To jeering from my co-workers at my hesitation to this simple question, I timidly said, “Ten?”

See, I can name ’em all (Newfoundland, Nova Scotia, New Brunswick, Prince Edward Island, Quebec, Ontario, Manitoba, Saskatchewan, Alberta, British Columbia), counting along the way, but the answer doesn’t just roll off the tongue like “50 states.”

Thankfully, this time, my answer was correct.

Of course, one guy (yeah, the type that seems to have snopes.com bookmarked on his desktop to stifle any entertaining conversation that may start up) had to disagree with me claiming that “Google” says that there are actually 13.

Having now had time to count them in my head, I told him that Google is wrong — the three up north are territories, not provinces.

“Think Guam,” I told him…

He still disagreed… and, naturally, he’s also the type of guy that wouldn’t be able to name all 50 states either…

Anyway, after defending my knowledge of my home country, the inquisitive one said that Canada didn’t seem much different to him than the United States…

“They have American cars, McDonalds, Burger King, and stuff like that.”

I agreed and disagreed at the same time but didn’t say anything as I nodded.

Then he continued, “But they don’t accept Discover.”

Hmmmmm… I didn’t know that.

After a little research it appears that he is correct — it’s pretty much only accepted at the tourist traps that Americans frequent.

Good to know.

And another reason I’ll never apply for a Discover Card.

…as if the stigma of actually having one weren’t enough on its own!

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Citi sucks.  Not as bad as Best Buy but pretty darn close.So in yesterday’s spending report, I mentioned that I’d been dinged for $1.87 in finance charges.

I’m not happy about it.

In my opinion, I never should have been assessed finance charges.

My statements come out on the 26th of the month. On February 25th, the account balance on my Citi AT&T Universal MasterCard was $0.

On February 26th, they assessed a finance charge of $14.97.

That was legit, I assumed, as I’d carried the a good chunk of the balance of the baby furniture purchased in January. It made sense — I wasn’t going to argue.

So I paid it right back down to $0 on February 28, you know, to make my monthly net worth update look nice with a $0 balance.

My balance on the card remained $0 until I bought gas on March 11.

The next morning, on March 12, I paid the card in full. Again, my balance was $0.

That was the last time I used the card so it came as a total surprise when I logged in to my account on March 26 to see that they’d charged me $1.87 in finance charges.

Huh?

My balance was $0 before the billing period began. They charged me $15 in finance charges, which I paid two days later. Then I charged $18 in gas and paid the bill one day later.

At my due date, the balance was $0.

At no time was my balance higher than $18.

And they charged me $1.87????

What?

My initial reaction was to just let it go. It’s a couple of bucks — who cares, right?

But then I recalled all of those horror stories I’ve heard of people struggling to get their balances to zero when the bank just keeps nickel-and-diming them with finance charges to prevent them from ever reaching that point.

Time to contact customer service…

I sent them a message through the website explaining politely that I was confused as to why I’d been charged any finance charges at all when my account balance was zero before the billing period and zero at the end of the billing period.

Here’s the canned response I received:

Finance charges for purchases, balance transfers and cash advances will begin to accrue from the date the transaction is added to your balance. They will continue to accrue until payment in full is credited to your account.

This means that when you make your final payment on these balances, you will pay interest for the time between the date your last statement prints and the date your payment is credited to your account.

Was this message helpful?

Seriously, the last line was really there. And my answer was “No.”

Thanks for the canned answer.

I know what finance charges are — I was just under the impression that when you had a $0 balance, you know, you kinda “earned” a 20-day (or so) grace period. Apparently, I’m mistaken even though that’s how every other card I’ve ever carried has worked.

The more I read into that canned response, the more I began to think that I was in the initial stages of being nickel-and-dimed.

It’s as if I was hit with finance charges on finance charges (not a “purchase, balance transfer or cash advance”) during those two days at the start of my billing period — though $1.87 for two days seems a little steep…

I frantically tried to make a payment of $1.87 to Citi to prevent it from happening next month.

Their horrible web interface told me that the earliest I could make a payment was March 30 — at the time, that was 4 days away! Oh no!

I began to stew.

And then I sent them a less-friendly response:

Okay — so it’s all but impossible to get my balance back to $0, huh?

Your website doesn’t allow me to “overpay” my bill so as to “pre” pay the looming finance charges — something I’d like to do — so you’re basically telling me that I’ll continued to get hit with minuscule finance charges indefinitely until I somehow “luck out” and am able to submit a payment seconds after the finance charges are debted from my account?

Is that how it works?

Seems pretty crooked.

And here’s how they responded, to their credit, pretty quickly:

The finance charges for purchases will begin to accrue from the date the transaction is added to your balance. They will continue to accrue until payment in full is credited to your account. This means that when you make your final payment on these balances, you will pay interest for the time between the date your last statement prints and the date your payment is credited to your account.

So apparently a $0 balance isn’t “payment in full” to Citi. Okay, whatever…

A few days later, on Sunday, still steaming (yes, over $1.87), I logged back into my account.

Though I check my account balances on a daily basis, this was the first time that I’d noticed that my rate had jumped to 16.99%

I would never apply for a card with a rate like that so why should I continue to use one?

I took the card out of my wallet.

And then it hit me, this was also the one credit card in my arsenal that earns reward points — yeah, those things that I think are a total joke.

Thinking about it some more (yeah, I couldn’t let it go), back in December, I remembered receiving one of those “change of terms” letters from Citi. Good thing I blogged about it — that’s where the 16.99% figure came from — but what I was recalling was some additional literature enclosed with something about them reserving the right to suspend the awards program or take away my reward points whenever they felt like it.

That did it…

I’m done with Citi,” I told myself.

I logged into their ThankYou network and started shopping and you know what?

I managed to spend all but 28 of my ThankYou points last night.

Wanna see what I selected?

Allie G, the singing alligator.

Yep. A singing alligator. (you need to click on him. I beg you.)

Silly? Yes.

Frivolous? Perhaps… but hopefully the baby will find it as hilarious as I do.

I should also mention that I very frugally used ThankYou points to pick up the ever-elusive telephone (a Panasonic KX-TG6432M) that I so struggled to find over the weekend too…

Thanks Citi — and good riddance.

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Smurfs are cool.  I don't care what you say...  they are.  That's a fact.One year ago today, following a $508.13 payment, I posed that I’d eliminated $28000+ worth of credit card debt.

I even included a neat little graph to show how awesome my progress was.

That’s right — I said “awesome”.

In a four month span, I absolutely destroyed over $13k in debt. That was awesome.

(In reality, it was just a ton of momentum… Once I saw the debts falling, things started moving faster than I ever could have imagined…)

The good news is that my total credit card debt is still $0.

The bad news is that I don’t feel like I’ve progressed very much since then…

Sure, I paid off my auto loan in full (no car payments! woo-hoo!), I knocked nearly 10% of my mortgage balance out, I finally secured conventional homeowners insurance, and I somehow even managed to grow my savings account to 5-figures but for whatever reason, I dunno, I thought that once the credit cards were under control, I guess I thought I’d have, oh, say, a couple grand each month to spend on whatever I fancied.

It hasn’t worked out that way.

I wonder if that’ll kick in when I polish off the mortgage? Hmmmmm…

Either way, that’s still a long way off…

– – – – – – – – – – – – – –

Fun PIAC Financial Factoid: Sure, the past week has been pretty kind to everyone’s investments but even without the recent uptick in the markets, my investments have done better in 2009 than they did for the same time period in 2008. Crazy, huh?

From January 1 through March 22, my investments were down $1098.85 in 2008.
This year, not even including this week’s gains, from January 1 through March 22, they were only down $120.40.

Perhaps that says something about my personal investment strategy but I still think it’s clear that things aren’t nearly as bad as they might seem.

Reviewing My ProgressWell, 2008 is all but over so how’d you do?

I did pretty well on my goals for 2008. I mean, I certainly can’t complain.

In order of completion, I managed to increase my 401k contributions to 15% of my income, I eliminated all of my credit card debt, I paid down enough principle on my mortgage to have PMI removed (though it never actually happened), and I paid off all of my auto loans.

That’s a pretty decent set of achievements and I’m proud of every single one of them!

But there were a couple more goals on my list…

One, that I considered lofty, was to have $10k in savings.

Here, on the last day of the year, I’m finding myself in a bit of a grey area. I don’t feel that I accomplished the goal but by a technicality (my paycheck was deposited today instead of tomorrow because of the holiday), I actually have $10k at my disposal.

Just saying that blows my mind but, honestly, it doesn’t feel real.

And it isn’t all in my savings account right this minute, but it could be, so that goal was pseudo accomplished as well.

The final goal was to increase my passive income. That was a wishy-washy goal from the get-go and though my “side income” decreased by over $13k this past year, I managed to increase my 100% passive income… by just $63 over the entire year.

Hey, it’s better than nothing, right? It’s not like I “worked” for it…

So, with that, I can’t say that I accomplished all of my goals, but I think I took care of the big ones.

Hopefully 2009 goes even better — though my goals for the coming year are far less specific.

Can You Dig It?

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