[pepperbradford]

I've always been in the "savings first camp"...until recently. We had a small EF, about $700, but it kept being whittled away at. We had credit card balances that we had been paying down for almost 10 years. Then I checked my credit and found it to be pretty good. So I applied for a new card with 0% interest on balance transfers (providian) and moved the balance off the other card (citibank, managed through CCCS at 9%). I paid it down and, as my 1 year started to run out, I applied for a new citibank card with the same offer. Then applied for a Kroger (grocery store) rewards card. Now we have about $1500 left in a balance on the citibank card at 0% unitl next Oct, and we use the Kroger card for everything and pay off the "statement balance" every month. I've been leaving the extra in the savings account to earn it's pitiful 2.2%. But perhaps there is a better use for the money.

Since I don't have any interest on my balance, it's not really a funciton of my 2.2% versus the 22% card interest. But I could be paying the card off quicker, and reaching my debt free goal sooner.

Also, and here's the reason I'm writing, I have two cards right now, as was mentioned. One has a balance with 0% interest, and is never used for purchases. The other is used for every purchase, and is paid off every month. I could use my dual credit card system as my EF.

Let's say I had a car repair bill of $1000. I don't have the money sitting around in savings anymore. But I can't afford to carry that balance at 23%. so I put it on my Kroger card initially (and earn my $10 in rewards), then immediately transfer the balance to my Citibank card, where it will sit with 0% interest until I can pay it off. Doing this will cost me $30 in a balance transfer fee. Minus the $10 I earned in rewards, it costs me $20, or 2% amoratized over the 10 months left until my 0% offer expires in Oct. At which time, I expect to apply for another 0% card offer...