Archive for August 1st, 2007

Thunderbirds, Activate!

August 1, 2007

Since American Express has obviously declared war on us, in a very obnoxious way, we are forced to give up our peaceful ways and bring out the big guns. Though I’m not sure why it didn’t occur to us before, probably some kind of cognitive block, we do have some mutual fund shares we could sell. I have the cold-war image of an old stop-motion cartoon where they had to defend the earth from these evil UFO’s. It was an English show, perhaps?

In any case, Lady Dough and I are simultaneously turning keys in the silo and will be nuking American Express. This is the least inflammatory language I can use. It is difficult to muster the self-control to not say all the nasty things I feel about them.

But of course, it was us that failed to read the fine print. We missed the payment. Well, fine. Enough is enough. We are very fortunate to have this option. I don’t think we pictured liquidating our investments to pay off debt, but there you have it. Reality kicks you in the teeth.

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Cashing In to Pay off Debt

August 1, 2007

I’ve had a series of revelations this week:

  • Our current income is not great enough to make any significant progress on our debt
    –Noma and I have been trying to cut back but when our income includes only one regular paycheck and our expenses include $1500 mortgage and $1600 in childcare it starts to feel like an exercise in trying to turn water into wine. Seeing others reveal their budgets was actually helpful in letting me see why we are having trouble staying on top of things.
  • We have three credit cards and we’re having a hard time staying on top of the bill pay. Our lives are hectic and our cashflow is tight…We know when the bills are due but when doing online pay we sometimes miss the cut off time.
  • We have paid our credit card late twice and had our APR rise as high as the moon.

All of this has made me realize that perhaps selling some stock would make the most sense. That stock is a nice asset but wouldn’t it be nicer to get rid of this debt and start working on positive financial goals such as sticking to a budget, building up our emergency fund and saving for some home repairs?

I wrote to Trent at Simple Dollar to ask his advice and he agreed it would probably make sense to sell the stock to pay off the debt.

Any other opinions? Keep in mind that I still have over 230K in 401K, IRA and other stocks…and a lot of equity in our house.

Credit Card and Evil Introductory Rate APRs

August 1, 2007

One step forward and three steps back. I was just reading an article on Yahoo Finance called “Five Steps for Ditching Credit Card Debt“in which the David Bach outlines a strategy for determining which credit cards to pay off first. I decided to update my spreadsheet and follow his exercise which involves taking balance and dividing it by the minimum payment due. In doing this I noticed two things (1) my credit card statements don’t list a minimum due and (2) an extremely HIGH finance charge on my Amex Blue account. Geez. Credit card companies are evil.

I am now on hold with American Express. I just learned that I must have paid one or two of my payments late and our interest rate has shot up from 4% to 30.25%. I can’t believe this. Noma is going to have a coronary. We’ve been trying to stay on top of things and yet it seems that our payments must have been marked late and that the interest rate shot up insanely based on this.

I feel like I’ve been raped by American Express. I tried to ask them to let me rectify this but they’ve said that I need to wait 1 year of paying ontime before they will reduce the rate again. Did I mention that I hate credit card companies?

The woman on the phone just came back and gave me secret information. My minimum payment due each month is $317.79. I need to set this up for automatic payment NOW.

I feel like an idiot. So much for having transferred our balance. Now I need to look into whether or not we can transfer it again to another card w/out damaging our credit.