O% Credit Card Offers Are A Trap

John Chow has written a great article explaining why 0% interest credit card offers can actually be a trap. It basically comes down to make sure you read

Back here I wrote about how I’d applied for a GE Money Mastercard because they were offering a 0% interest offer. I read the fine print and realised that the 6 months was likely to be less than 3 months and didn’t go ahead with it because the money I’d save wouldn’t have left me much change after I’d paid for the stamp to apply for the transfer.

Read The Article Here

I got the loan info I needed

There was an email waiting for me at work today from the loan consultant.

$18,000 over a five year term is going to cost me about $180 a fortnight.

Averaged out over the year this is going to need another $55 a pay on top of the minimum credit card repayments I have been making for the two business related credit cards. In s0me crazy karmatic way I’m expecting a payrise for that amount at the end of the month.

Another good thing is that the interest rate is fairly low, and I can repay extra at anytime without incurring a penalty. But I don’t plan to do this until I’ve paid out the credit card with the private expenses on it.

So one of my jobs this long weekend is to fill out the personal loan application form, I can’t believe I’m finally doing what I’ve been talking about for the last 12 months.

I’ve enquired about a consolidation loan !

At the prompting of my newly appointed nagger, Today I sent an email to the local consultant requesting information on the process to apply for an $18,000 personal loan to consolidate my credit card debts. I also asked how much the repayments would be over a five year term.

My rough calculations are that it will cost me a little over $400 a month which means I have to find an extra $80 a pay on top of the minimum monthly payments I’ve been making on my credit cards. This is a little more than $5 a day so I’m sure I can do it.

Once I’ve squared away the personal loan my plan is to transfer the remaining credit card debt to a low interest credit card where the interest rate will be no more than I’m paying on my personal loan.

However while I have a good job and always pay my bills (when I remember) I’m not sure if I’ll get the loan. I’m 34 and have no assets of substance, so that might go against me a little.

We’ll just have to wait and see !