Financial Guru question???

[V8Assassin]

I'd pay a large chunck of it, and keep a little cash handy for a rainy day.

I have good credit, and hear what gnxtc2 is saying, but I wouldn't worry about that. I haven't used a credit card in over 6 years. I paid cash for my '06 gto, and have no car payments. Haven't had a car payment since the late 90s. All my bills are automatically deducted from my bank account, so I have no late bills either. I own a house, and that is the only debt I have. If I don't have the cash for something, I don't buy it. I'm in my mid 30s, so don't think i'm an old fart that has had a long time to get set up this way.

Can't wait to get there. Paying off the cars next month. I will be so glad to be rid of car payments. My dmax is financed at zero and people say don't pay it off, but I am sick of the payments. I personally think house debt is the only debt a person should have. At least you get to write the interest off every year.

 

[Gary Wells]

If you can, continue paying $1K per month, you only have 2.5 years to go.

If you feel like you're on the bubble or just feel more comfortable with a good bit of cash available, keep alot of the savings short term so you can get to it. Regular savings is paying as little as 0.25% APY; that's right: 1/4 of a cent per dollar annually - $4 a year earns you a penny - $20,000 earns $50. A 30-day CD pays about 1.8% APY and your money is only tied up for one month. 9 month CDs pay about 3% APY. There is little risk involved, it's FDIC. You could put $20,000 in the 30 day CDs and get $360 over the next year if you roll them back to back or go with the 9 month and get $450 (12 months = $600 but the CD terminates every 9 months). There is a penalty on CDs for early withdrawal so be prepared to commit. As the bank for details; usually it is 25% to 50% of the interest you would have earned if the CD went full term.

If you did 3 back-to-back 9 month CDs, you'd earn almost 1.5 payments over the next 27 months but yes you'd pay tax on those earnings ($1350). If you did 30 day CDs over 27 months, you'd almost earn a payment ($810) but you could continue for 3 more months since they renew each month ($900 total). If peace of mind for $450 ($15 per month) less earnings over 30 months is worth it to you to be liquid monthly, then go with the 30-day CDs. This does not qualify me as a guru FYI.

Might be a little different out here in Kali, John. Seems to be a pulling match between the banks that are going under the knife, so to speak, as all of the banks that are going under or are in very questionable financial problems will not offer any interest on non-lock up accounts such as savings, checking, & money markets. they are offering interest only on Lock-up CD's, generally 9 months or longer. Some of the newer not so famous banks out here that do not seem to be in trouble are offering pretty good APY on savings, (3.25% APY), Senior checking accounts (3% APY), probably to induce the peeps from the other banks to opening accounts in their ban. Naturally they will drop those APY rates when they get enough new accounts & cash on hand. I don't like to lock up money if there is no real beneficial gain to it, especially on today's financial woes through out the country.
HTH.

 

[John Larkin]

Got some bank names to share? I am just curious, not questioning you. All banks seem to be feeling the lending woes. I am not so sure any of them are trouble-free but the FDIC has to back up their insured accounts. In short, what can you really do?

 

[saywin]

Earnings

If you can, continue paying $1K per month, you only have 2.5 years to go.

If you feel like you're on the bubble or just feel more comfortable with a good bit of cash available, keep alot of the savings short term so you can get to it. Regular savings is paying as little as 0.25% APY; that's right: 1/4 of a cent per dollar annually - $4 a year earns you a penny - $20,000 earns $50. A 30-day CD pays about 1.8% APY and your money is only tied up for one month. 9 month CDs pay about 3% APY. There is little risk involved, it's FDIC. You could put $20,000 in the 30 day CDs and get $360 over the next year if you roll them back to back or go with the 9 month and get $450 (12 months = $600 but the CD terminates every 9 months). There is a penalty on CDs for early withdrawal so be prepared to commit. As the bank for details; usually it is 25% to 50% of the interest you would have earned if the CD went full term.

If you did 3 back-to-back 9 month CDs, you'd earn almost 1.5 payments over the next 27 months but yes you'd pay tax on those earnings ($1350). If you did 30 day CDs over 27 months, you'd almost earn a payment ($810) but you could continue for 3 more months since they renew each month ($900 total). If peace of mind for $450 ($15 per month) less earnings over 30 months is worth it to you to be liquid monthly, then go with the 30-day CDs. This does not qualify me as a guru FYI.

We currently have it setting in an ING account, paying about 3%. So would you pay off the debt or roll it into CD's?

 

[The Blob]

I can tell you that my wife has kept us at zero for the past 8 years.

How is that possible?

As far as I know there isn't a card on the planet with 0% interest for anything but a short introductory period.

 

[RobsIron]

Wait until after the election. Depending on who is elected..watch the stock market. Right before it crashes run up and cash out all your credit then walk away.

Cash is king.

 

[Grimster]

We currently have it setting in an ING account, paying about 3%. So would you pay off the debt or roll it into CD's?

I just bought a couple 10 month cd's drawing 4.15% (business) and 4.25% (personal) so if you're paying 0% on that debt, then I'd definitely get me some cds and as long as that 0% exists you'd be silly to pay it off, put that 30K into a 4% cd and you get 4% (minus taxes and crap of course) for free basically.

These were through RBC Bank.

 

[Gary Wells]

Got some bank names to share? I am just curious, not questioning you. All banks seem to be feeling the lending woes. I am not so sure any of them are trouble-free but the FDIC has to back up their insured accounts. In short, what can you really do?

John, up until this weekend I thought that any bank paying any type of high interest was not doing well, but I have changed that line of thought to any bank or financial institution that is paying good interest only on lock-up type of stuff (CD's) is not doing well and wants you to to lock up your money for their survival as you would be more reluctant to close the CD with penalties imposed.
Two that I am considering are
Imperial Capital & Commercial Bank of Calif.
I am leaning towards Imperial Capital, but have not found out the age requirements & whether the senior checking (3% APY) is a IRA type of account.
I am sure that ING is ok, but I am not too fond of on-line banking only yet, and may never change on that respect. Age thing, you know?

 

[John Larkin]

Thanks for the names Gary. I too am hesitant to go internet banking; I like brick and mortar. Whether you are in a CD or regular/money market savings, if there is bank default the FDIC steps in. Even IndyMac customers are being handled presently. I gotta tell ya, if I sit around and worry whether my long-term name-brand banks are going to run off with my savings, I should end it all right now. Maybe I am just naive.

Back to the topic, if you are earning 3% right now, saywin, I think you are getting a decent deal currently. Stop by your bank and talk to them.

 

[Grumpy]

How is that possible?

As far as I know there isn't a card on the planet with 0% interest for anything but a short introductory period.

has me scratching my old head to. Care to give us the inside scoop ?? :biggrin:

 

[saywin]

Scoop

has me scratching my old head to. Care to give us the inside scoop ?? :biggrin:

I will have to let my wife explain how she does it. I will get her to type it in tonight. Keep posted!!!

 

[Gary Wells]

Thanks for the names Gary. I too am hesitant to go internet banking; I like brick and mortar. Whether you are in a CD or regular/money market savings, if there is bank default the FDIC steps in. Even IndyMac customers are being handled presently. I gotta tell ya, if I sit around and worry whether my long-term name-brand banks are going to run off with my savings, I should end it all right now. Maybe I am just naive.

Back to the topic, if you are earning 3% right now, saywin, I think you are getting a decent deal currently. Stop by your bank and talk to them.

John:
The FDIC is only handling the issue partially at Indymac. The FDIC stated that they will cover 100% of the monies up to the 100K max limit, and then from there, they are covering only $.50 on the dolllar of the accounts that exceeded their recommended / legal limits. Fwiw, this is the first time in the history of the FDIC, which began in 1933, to refuse to cover all monies in the accounts due to bank failure, wheter within the recommended limits or not.
Find out what your limit is and do not exceed. Under certain accounts and how they are established, I think that coverage can go to maybe $250K.

 

[BLACK6PACK]

More than likely bouncing from credit card to credit card. Girl I work with does that. Has not been paying interest for 2 years. 6 months 0% intrest on transfers, 6 months later she's transferring it to another card.

 

[gnxtc2]

More than likely bouncing from credit card to credit card. Girl I work with does that. Has not been paying interest for 2 years. 6 months 0% intrest on transfers, 6 months later she's transferring it to another card.

Yep, one of my friends does this also.

Billy T.
gnxtc2@aol.com

 

[8AV8]

0% interest???

It doesn't get any cheaper than FREE. Why put capital that is MAKING you money against a credit card that isn't costing you anything. If you lose the 0% take the money and pay them off.

 

[bison]

If your earning a couple % more with the money where it is vs. the interest on the CC leave it as long as you dont plan on buying anything requiring another loan. You will be denied till you pay it down. Keep in mind interest income from bank accts. is taxable income and cc interest is not a tax write off so you lose more than you think in a cd vs paying if the interest is close in both. I say wipe it clean. How does one aquire that much cc debt . Kills me to think about it.

 

[bison]

My wife and I pay 0% interest on the credit card. The actual dollar amount we owe is lower than 30k, but I have the same amount in debt as I do in savings. I just hate having credit cards now days. I have been listening to Dave Ramsey on the radio and I feel guilty having any CC debt. I suppose I could let my money earn interest but it's just the thought of having the debt that bothers me.

To make matters worst I want to get another Buick and that means I will have to borrow money or take it out of savings, that means more money either way you look at it!

Darn I wish I were richer!!!

Creditors dont make money by giving you 0%. That wont last long. Regardless of what anyone may tell you. I doubt you could find a revolving cc that is under 10%. I have a good one that is around 10%. Cash too but i hardly pay interest. I charged over 30k last year and paid $4.56 interest on those charges. Plan on paying it in one chunk if you do. Id do 3 transactions under 10k each or there is additional paperwork.

 

[saywin]

Possible

How is that possible?

As far as I know there isn't a card on the planet with 0% interest for anything but a short introductory period.

My wife said anything is possible because if Buick could make the fastest production car in the US in 1987, you can pay 0% interest on CC for a long time. She said to pay your bills on time, save your 0% offers, only choose the offers with 0% purchases and transfers and free transfer fees. My wife said this is the secret to her success.