Comments on: College Money Tip #10: Cut Up Your Credit Card

By: Ann

Ann — Thu, 20 Aug 2009 22:31:32 +0000

Credit card can be considered a “friend” who will help you when you need it. In case of cash shortage, you can just charge your expenses to your account. On the other hand, it has a drawback when you don’t know how to use it correctly and properly.

By: The Most Important Part Is Starting: Debt Recovery | Personal Finance Firewall

Sun, 08 Mar 2009 05:42:56 +0000

[...] There are many ways to help ease the pain of credit card debt with high APR. The first thing to do would be to try and get the balances transferred off the high APR credit cards to a lower interest rate credit card. How this usually works is you can find a card that has a lower interest rate than the card you currently have and transfer your balance to that card. In my friends case, anything under 30% would work. Many cards will offer a temporary APR of 0% on balance transfers for a certain amount of time. Be aware that many of these cards do charge a fee for the balance transfer, which is usually about 3% of the total amount of each transfer. Many of these will also have a maximum fee which is a great thing to look for if you are transferring a huge balance because. Here is a list of instant approval credit cards that have good introductory rates for purchases and balance transfers, and have a decent interest rate after the introductory rate. The card I used is the American Express Starwood Preferred card which has a 2.9 intro rate and no fee for balance transfers. After you transfer your balance off the card, cut it up and stop using it but don’t close the account as that can hurt your credit score. If you ever need, you can always order a new copy of the card. [...]

By: J. Money

J. Money — Sat, 21 Feb 2009 21:48:00 +0000

haha, oh yeah gotta love them cards! i fall into the “use your c/c for everything you possibly can” groups to rack up cash back rewards and budget easier

but as you say, it’s def. not for everyone! but it sure is hot if you can master it.

By: Jesse

Jesse — Sat, 21 Feb 2009 18:14:54 +0000

@Regina
Legally the company has to contact you to close the card but your exactly right. many of them now are doing the act now, ask questions later and canceling cards at “consumers request” when the consumer did not request it. Then one has to call and reopen it within a certain amount of time before it is reported to the credit bureau.
Two of my accounts were “closed by consumer request” without my authorization.

By: Jesse

Jesse — Sat, 21 Feb 2009 18:12:42 +0000

Very good tip. I think far too few people realize they have a problem. I know I did not realize I did because I was living at home, had few bills and was new to the whole credit card scene so I just kept swiping.

I like your tip to order a new card when you feel in control again. Another thing is to freeze the card in a block of ice so it takes some real effort to get to it. Then if there is a real emergency, you still have the card. This takes far more control than the old chop chop though.
Great article

By: Jerry

Jerry — Fri, 20 Feb 2009 21:45:10 +0000

Congrats on becoming a credit card “deadbeat” (in the good sense of the word)! That leads to some great satisfaction, I can imagine. Credit card companies prey on people when they are in college because they have some insurance that people tend to think VERY short-term when in that stage of life, and it’s really tempting to get everything NOW. They aren’t dumb, that’s for sure. It’s like tobacco companies trying to get kids to start when they are young.
Jerry

By: Regina

Regina — Fri, 20 Feb 2009 21:15:58 +0000

Be careful just cutting up a credit card and not using it anymore after you pay off your balance. I’ve heard some credit card companies will shut down your account if you don’t use it for a certain amount of time. This will do the same damage to your credit as if you had canceled the account.

By: Nate

Nate — Fri, 20 Feb 2009 20:47:21 +0000

I agree, credit cards are often unnecessary and dangerous. In fact, I wrote a post earlier today called “Weighing the Pros and Cons of Credit Cards”. You can read it at http://debtfreecollege.blogspot.com/2009/02/weighing-pros-and-cons-of-credit-cards.html.