Thursday, July 05, 2007


Credit Card Balance Transfer

I want to transfer a balance of $8,000 from one of my credit cards to another credit card at a 0% interest rate. The card I want to transfer the balance onto has a current balance of $0 and a credit line of $7,500. I want to transfer as much as possible to the 0% card. I realize that I will not be able to transfer all $8,000. I do not want this credit card to show up on my credit report as "maxed out". What is the percentage that I should leave available on the 0% card? I thought I read that if you leave 10% of a credit limit open on a card it will not be considered maxed out I.E - for a $7,500 limit, leave $750 available, transferring $6,750. Is this correct? I currently have great credit and do not want to damage my FICO score.

AFS’ Answer

There is high risk when transferring balances from one credit card to another. The first thing you need to pay attention to is universal default—meaning if you miss a payment, any payment on any account, you could see your 0% balance transfer offer interest rate spike up to rates as high as 30%.

Second, balance transfer fee. Some credit card companies charges transaction fees as high as 4 percent. A 4 percent fee on a $8,000 balance would cost you $320

Lastly, you need to pay close attention to how long you will have that zero percent interest rates? If it is less than 12 months, it is not worth transferring.

On your specific case, you do not have to be worried about universal default because you seem to know how to manage credit. However, those with poor credit management need to pay close attention to it.

Because you have a strong credit rating, you can transfer the whole balance and it will not have a drastic impact on your credit card. Once transferring balance to credit card A to credit card B, your debt-to-income ration does not change because the debt amount does not change.
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Monday, July 02, 2007


How to Deal with Debt Collector

RandomYahoo User

A debt collector keeps calling my son at work. I have been told it is against the law for them to do this, so he told them not to call him at work anymore as it would jeopardize his job. They yelled at him and told him they could call him once a day every day if they wanted to, and then threatened that if he didn't settle the debt right then over the phone, they would have the police serve papers on him that day at work. What are his rights and what steps can he take to stop this? Paying is not an option at this time as he just started the job and is barely making enough to pay living expenses. He don't own any property or even a car as he doesn't drive.

“Five Great Lies of Bill Collector—And How You Can Cash in on Them
Sadly, some bill collectors tell you almost anything to scare you into sending some cash. Over the years I have seen some egregious examples of collector deception. Here are five of my favorites:
1) “we are sending the sheriff out after you” If the cops were called out to hunt down the millions of delinquent debtors (who, by the way, have broken no laws), they’d never have time to go after the real crooks.
2) We are going to garnish all your salary. This common ploy is just hot air. A garnishment takes only a small percentage of your earnings
3) You are going to lose your home. Another Whopper. No creditor or court has the power to take your home form you.
4) We will simply take the money from you bank account. No, you won’t, not without a court judgment mandating it.
5) I am calling from the legal department
But there is how you can turn these lies to your advantage: most states have laws against bill-collector deception and lying—and substantial compensation if you can prove it. Get a telephone take recorder to record your conversation with collectors. As long as you are a party to the conversation, surreptitiously taking it is legal in most states—but check your own state’s laws first.”
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