Tuesday, November 20, 2007

Credit Card Advice

I actually get to start some of the hard core financial dealings I wrote about in the last post real soon. As a condition of my house closing, I had to pay off a credit card -- actually, I would have had it paid off by now, but then I decided to buy a house, and my lender was pretty clear that for the time being I should not spend a cent of my hard cash, that included paying anything over minimums then. So paying off the card is kind of a bonus for me, instead of all my closing cash just going to fees and whatever (it has to do with the type of loan I got -- it includes a large government "gift").

So I am in the happy position of being, um, 1/3 debt free. Here's the thing: this isn't going to last long. Because I only get half my loan up front, I basically have to credit the other half until my house inspection is cleared.

The obvious:
1) Negotiate a lower rate on all three cards by threatening to move the funds and cancel the card.
2) Negotiate a low transfer rate and shift everything around.
3) Cancel one card and open a great, rewards, 0% for 12 months, etc, card.

Have any of you been in a similar situation? What did you do? I assume I'll do some combination of 1 + 2, but if I do 3...what card do I get? Do any of you have an awesome credit card (as far as credit cards go) that you'd recommend?

Furthermore, do any of you have any negotiating "tricks" when it comes to getting your percentages lower? Mine aren't too bad to begin with, so I'm hoping to not have too much trouble, but of course they won't give it up with out a fight.

Leave comments if you feel like spreading the joy to my millions of readers (or actually, the millions of people who've been googling "waive into DC bar" lately -- congrats 2007 CA bar passers!), or just shoot me an email at twotimingthecosmos[at]gmail[dot]com. Thanks!


At 6:54 AM, November 21, 2007, Anonymous Steve said...

canceling a card will have an adverse effect on your credit rating. bad idea.

At 9:45 AM, November 21, 2007, Blogger Rebecca said...

Heather, Consumerism Commentary does a good job of analyzing different credit cards. Here is a post about credit cards with 0% transfer apr.

and a more recent post on cards with 0% purchase apr.

At 1:10 PM, November 21, 2007, Blogger Heather said...

Uh...I think I'm pretty well versed in what is good and bad for your credit, and that's new to me, Steve. Are you sure you're not just thinking about canceling the card so that I have *no* credit lines open? Here, I'd immediately open a new one, and even a single action like that is doubtfully going to destroy my credit.

Rebecca - thanks!

At 1:50 PM, November 21, 2007, Blogger Rebecca said...

People often will tell you not to cancel a card, because it will typically decrease your total amount of available credit, which is one of the most important factors in credit score. But that doesn't appear to apply to you, since you want to replace it with a new card (presumably w/similar credit limits).
However, there is another effect it could have. Credit scores are also based on the length of your credit history. Canceling a card that you have had since college would lower your credit score, while canceling a card you just got would have less of an effect. Of course it doesn't hurt to threaten to cancel it...


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