Tuesday, March 29, 2011

Let's Make a Deal!

Before I dig up something from the depths of the freezer and tackle probable freezer burn, I thought I would take this opportunity to report on the credit card offers we've had and/or accepted in our quest to keep ourselves from fully sinking in the quicksand of debt.

On the incredulous side, Sarah and I are both blown away by some of our respective ludicrous offers:
1. For a great reduction in interest to 9.9%, all you have to do is pay $1219! Yes, that's 1,219 dollars. 'Nuf said.
2. For a reduction in interest to 0% (now you're talkin'), your payment will be just $333 a month (um, that's MORE than I can't pay now).
3. Etc. - If you'll pay $XXXXXXX today, that will:
"Save your credit score!"
"Keep your account out of collections!"
"Enable you to continue using your card!"
"Stop the phone calls!" (Well, okay, gotta admit that one sounds nice)

On the positive side, I have accepted four plans so far. I'm not completely comfortable that the payments will be easy, but we will find a way to tend to them:
1. Bank card: Payment is now 68% of what it was with 2% interest (from 19.24) for 60 months, at which time the balance will be paid in full. The catch - I have to remember to call and renew in February. I will. Draft payment.
2. Department store bank card: Payment is now half of what it was with 3% interest (from 23.24), to be renewed every 12 months. Also a draft payment.
3. Department store bank card #2: Payment will be less than half what it was at 9.9% interest (from 23.24) for 6 months. It can be renewed for another 6 months at that time. At the end of 12 months, we'll see where we stand. The rep, who was very nice and sensible, assured me they would work with us. This plan begins in May; for April, we are to pay what we can. Because I have been paying online for a few years, this is not a draft payment. If I miss a payment, we will be unable to requalify. I won't miss.
4. 'Discount' department store: Payment will be 36% of what it was. The interest remains awful at 22.9%, but the finance charges will be halved. At the end of 6 months, if we are still having trouble, they will divide the remaining balance by 40 to get our monthly payment for the next 40 months... at which time the balance will be paid in full. Only the first payment is a draft.

I have opened a separate bank account for the draft payments and have reminder notes ("Put money in," "Draft on ___ day") on neon note cards placed in the appropriate spots in the bill stack. It seems a bit nervewracking to know we can't goof up, but the relief that we do have a plan - if only for four cards so far - helps offset the stress. That stress, anyway.

We have quite a few accounts without plans, but I'm confident that we'll be able to work out something acceptable. Maybe not easy, but doable. We'll make it work, as the alternative of bankruptcy sounds like even less fun.

Yep, let's make a deal.

Jenny

7 comments:

  1. HI Jenny and Sarah,

    I just read all your posts, very interesting. You might want to consider having debt tabs for each of your separate debts to help make it easier for readers to follow.

    Other than that I commend you, both!!! Admitting its time to fix something and to own up to it instead of going bankrupt is very commendable. Especially when you both have kids and family commitments!

    Don't let them scare you about your credit scores, there will always be someone willing to give you credit. And banks always prefer clients who can say 'I was in XXX amount of debt but I know have zero with out going bankrupt'

    I don't know much about the med. stuff in the USA but it might be worth looking at medical insurance and seeing if you can get it. I would make it a priority to have it fit into your budget that might cut down on the med costs in the future. But like I said, I don't have any advise on this one.

    Any ways, welcome to the PF blogging community. We are a sportive bunch and are excited to have join our community!!

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  2. Hi Sarah (great name :)!

    Thanks so much for the comments - they are just what we were hoping to hear. I'll see if I can figure out how to do the tab thing (a techie I am not) - that's a good idea.

    I think we're both over worrying about credit scores. Neither of us need any MORE debt right now, so it's really a non-issue. We both feel pretty strongly that bankruptcy is not an option. We did get ourselves into this (with much help from the credit card biz) and we have a moral obligation to pay up. Thank you for reassuring us that we're doing the right thing.

    We both have medical insurance through our husbands' employers, but we both also deal with some pretty extraordinary family medical expenses. Insurance covers a lot - but nowhere near all. One of the many pitfalls of the American system.

    Thanks again for the warm welcome! We are hungry for any advice you can offer. We know we have a lot to learn!

    Sarah

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  3. When Hubby and I were standing in the bottom of the pit of our debt, we decided to climb and scratch our way out instead of bankruptcy. It didn't sound like any fun at all!
    It seems you gals are doing good so far, taking the first steps toward building a better financial life for yourselves. Good job!

    I have a question...Have either of your families built an Emergency fund into your already tight budget? Do you have plans to? I know in our struggle, the minute we were at the very bottom of our pit, and could no longer see the light of day, that's when Murphy's Law came into effect. We had one issue after another. I heartily reccomend giving yourselves a bit of a money cushion, even if it is only a couple of hundred bucks.

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  4. Hi Antie Eboo!

    Always nice to hear that someone has taken the path before us and survived! Good question on the EF. We have been aiming to keep $1,000 in the bank for when Murphy visits, ala Dave Ramsey rules. We recently had to take a chunk out and need to replenish. I am already feeling antsy about it and worrying the car will need a repair - without using cc's what would we do?? Getting that back up is definitely on the list of things to do soon!

    Sarah

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  5. Welcome, Sarah, and welcome back, Antie Eboo! Thanks to you both for the encouragement.

    'Our' Sarah is way ahead of me here, but I aim to catch up and get our figures together as soon as possible. It would be nice to watch the numbers go DOWN!

    Sarah, 'our' Sarah is right - I'm not fretting over credit scores, either. What is interesting is that several card reps are trying to offer options so that we can continue using the card!!! I've explained we want the best offer, period.

    My husband has insurance through the state, but I only have an accident policy at the moment, as the monthly premium is astronomical. I pray I don't get sick and am thankful I haven't been.

    Antie Eboo, we have only recently jumped on the DR wagon, so we are in the infancy phase of getting an emergency fund. I'm hopeful that when we get all our 'plans' in place, we'll be able to get that rolling.

    I'm confident we WILL see the light at the end of the tunnel some day and that it won't be the train!

    Jenny

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  6. Hi there Sarah and Jenny: Like the other Sarah said we PF Bloggers are the most supportive people I know. I feel closer to these people than some of my family members lol! (Not even kidding!) I know you've stopped by my blog and I have now added your blog to my blogroll. We've seen each other through thick and thin and tell it like it is. I wouldn't have it any other way. Please feel free to throw some questions out there - you'll find you get a lot of responces:)
    Oh yeah, welcome and good luck to you both - getting your financial houses in order is primary to your survival - are your spouses on board with your plans??

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  7. Hi Jane! Thanks so much for the warm welcome - I'm liking this community of bloggers already! And we're excited about finding friends who will tell it like it is - that's what we need. Our spouses are both on board, but both have time-consuming jobs so Jenny and I are left to handle most of the logistics. Thankfully, neither of our husbands are spendthrifts ... like they could be with our bank accounts. We're both fortunate to have husbands who are supportive in most anything we do.

    Thanks for spending time with us and keep the advice coming!

    Sarah

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