BiggerPockets

We all know that the credit card companies are IDIOTS! In fact, I'd go so far as to say that they're managed by complete morons. I've posted before how I received notices from Capital One and Chase that they were raising my interest rates to some RIDICULOUS rate (like 22+%), even though I'm certainly one of their best customers (never missed a payment, credit score of 782, etc).

I acquired almost all my credit card debt as I was rapidly growing my rental property business. I used the credit cards for rehabs and even to buy a couple of properties. So, as of a couple months ago, I had five credit cards, all with significant balances. They had interest rates from 12.99% to 16.99%, which was already relatively high considering my credit score and payment history. When I, along with millions of other card holders, received their notice that my interest rate was going to more than 22% on four of these cards (2 Capital One and 2 Chase cards), I called the credit card companies to request a lower rate. They said that there was nothing they could do about the rates.

Therefore, I simply paid all four credit cards off with cash, leaving one National City Card with a balance on it and a 16.99% interest rate. I resolved to pay it off also over the next few months.

Then, a few days ago, I got a letter from Capital One with convenience checks with ZERO PERCENT INTEREST. A couple of days ago, I got a letter from Chase with convenience checks, also with ZERO PERCENT INTEREST! WHAT A BUNCH OF MORONS! If they had lowered my interest rate to something reasonable, I probably wouldn't have paid off those cards. Now that I have paid them off, they are willing to give me ZERO PERCENT INTEREST for the next year.

So, I did the only reasonable thing. I used one of the convenience checks with ZERO PERCENT INTEREST and paid off my one remaining credit card with 16% interest. I'll pay that card off over the next few months without paying any interest and then I'll be credit card debt free. It is absolutely no wonder that these banks and credit card companies are in such bad shape. They won't give their best customers a reasonable rate, but they will give them a ZERO PERCENT RATE!!! IDIOTS!

Mike

What's in your wallet :mrgreen:

Mike -

This is one of the best posts I have seen!!!

Reason: You jobbed the system!

I feel bad for people who could not pay off there balance and now pay 22%.

The banks are only going to force more bankruptcies and more foreclosures by doing this...

Way to go Mike.

*Full disclosure = I own shares of Visa and Mastercard.

I was a little suprised to learn you kept credit card balances. Even 16.99% is pretty expensive money. These companies probably did you a favor by raising your % to make you pay off your cards.

My plan is to avoid using Credit Cards in my real estate business. But perhaps I should re-evaluate.

I don't use Credit Cards anymore for personal finances. I just use debit cards. Matty has a good point though, to use the cards to boost credit and for points.

I think Obama wants to regulate the credit card industry to prevent this sort of thing. Probably unecessary market interference just for a little PR. This country should spend more time counseling people about money and the terrible effect credit card balances have on personal finances. I cannot believe how financially irresponsible otherwise "professional" people can be when it comes to debt, credit cards, and over consumption.

Matty -
The day I eliminated my CC debt was one of my happiest!