credit card woes

[cindyg86]

So, I'm a college student who has managed to rack up $3300 on my credit card... who knew eating out, alcohol, and other expenses could add up so fast?!

I've just realize I have kind of screwed myself over with no one to blame but myself.

I really know nothing about finance but am really trying to learn, which is why I came here. I want to get my finances all figured out and become credit card debt free before I graduate college (May 2009).

Would it be wise to open up another credit card in order to get a lower APR? I am with CitiBank and my APR is 16.240%... I have already asked them to lower it and that was what they gave me.

I've read about credit balance transfers but really know nothing about them. Anything you can offer would be great! I earn about $350/month through my part-time job, if that offers any information.

[Broken Arrow]

Hi Cindy. Welcome to the forum.

I don't think it's a good idea to open another credit card, and ah, 16%+ APR is really bad actually. Perhaps it's worth it to transfer balance to a "lower" APR, but you'll want to make sure you don't get stung with any kind of transfer balance fee.

Still, the best way to dig out is to dig in your heels, throw the credit card into a safe, a block of ice, shredder, or any other creative means of your choice to prevent you from using it, and just start paying it off as soon as possible.

You may also want to look into setting up a budget, tracking your expenses, and basically, and generally hop on the frugal bandwagon. In any case, good luck!

[buzz]

A debt of $3300, while a burden for a student with limited income, is not going to ruin your life.

First, you need to stop adding to the debt. If you can't pay cash, don't buy it.

Second, I would recommend transferring the balance to a card that offers a low rate for the life of the transfer. Make the minimum payments and save what you can out of your monthly income. Many people here will probably tear their hair out over this advice, but I see no reason to kill yourself over $3300 when better income is just down the road. Worry about it then.

Two things to note--do NOT use the new card for anything else. They structure the payoffs so you accumulate high-interest debt, while paying off the low-interest debt. And do NOT pay late. Your low interest will be replaced with a sky-high default rate.

[KatieNK]

You should find a CC that offers 0% interest for the first year for balance transfers. Then move that $3300 over to that CC and make it a priority to pay it off within 1 year. When you receive the new CC, don't even activate it. In fact, you can go ahead and cut it up and just think of your balance as a loan NOT a CC, where you might use it for purchases. Also, make sure you pay the minimum on time or you will lose that 0%.

If I were you, I would stay away from getting student loans to help you make it through college. Yes you can get them to pay tuition but somehow I ended up with a TON of student loan debt. It was from taking more than I needed and then getting a refund at the end of the semester and using it for living expenses, etc. I wish I had just worked more or figured out a better system or something!

Anyway, good luck! Realizing this now is good. Get rid of the CC!

[cindyg86]

You should find a CC that offers 0% interest for the first year for balance transfers. Then move that $3300 over to that CC and make it a priority to pay it off within 1 year. When you receive the new CC, don't even activate it. In fact, you can go ahead and cut it up and just think of your balance as a loan NOT a CC, where you might use it for purchases. Also, make sure you pay the minimum on time or you will lose that 0%.

If I were you, I would stay away from getting student loans to help you make it through college. Yes you can get them to pay tuition but somehow I ended up with a TON of student loan debt. It was from taking more than I needed and then getting a refund at the end of the semester and using it for living expenses, etc. I wish I had just worked more or figured out a better system or something!

Anyway, good luck! Realizing this now is good. Get rid of the CC!

Thank you so much! Yes, I found a credit card through my bank (U.S. Bank) that offers 0% interest on balance transfers for the first year. I definitely plan on doing that. I don't plan on taking out a student loan, or any other loan for that matter because I don't really want my parents to find out. They are paying for my school (I have a couple of loans in my name when they couldn't make up the difference) and they are preparing for retirement so I don't really want to worry them should I take out a student loan.

Thank you all for this advice! I know I can get it paid off within the year

[KatieNK]

Great! Good luck!

[vsjhoc]

Make sure you read the fine print, most of the time a 0% balance transfer will charge you a fee to transfer the money, but sometime you can get lucky and they will do it for no fee.

Do the read print. I haven't seen any credit card companies lately offering zero balance transfers with no fee. That went out of style months ago ...

[cindyg86]

Make sure you read the fine print, most of the time a 0% balance transfer will charge you a fee to transfer the money, but sometime you can get lucky and they will do it for no fee.

Yes I considered that but CANNOT find one with no BT fees. But, the fee they would charge (which I believe cannot be more than 75%... I check on a cap) is far less what I would pay in interest should I keep my balance on my current card with my current APR (I would end up paying approximatly $500 dollars this year alone!)

[safari]

I did balance transfers back in November and was able to find 3 cards that don't charge any fees for 0% balance transfers.

Citi Professional Cash - 12 months @ 0%
American Express In:LA - 6 months @ 0%
Bank of America Financial Rewards Platinum Plus - 6 months @ 0%

The Bank of America Card also has 0% on cash advances with no fee. They can transfer balance into your checking/savings account over the phone. That's how I was able to borrow over $100K and put it into my savings account. First transfer money from Citi and Amex into Bank of America and then from Bank of America into savings.