The Answers

I had written a post about my problems with a payoff of almost $8,000.00 on my Sears MasterCard which for two weeks went missing.

I also posted about the loan that I received from my bank and Why there was a $25,000.00 HELOC with a payment of $231.00 and a $25,000.00 Fixed Rate account with a payment of $217.00! Both due on November 4th.

First, the $8,000.00 was not missing.
For some reason, CitiBank insisted that my loan officer and I had to be on the phone together to acknowledge the payment to the account?
It, (the payment) had been sitting on someone’s desk for two weeks!
No reason given on why … the same bank, (CitiBank) accepted and applied my payoff on the Costco Visa Card and wouldn’t do the same on the Sears MasterCard without the above hoops! (Three way call)
Both cards are owned by CitiBank.

The bank loan thingy was quite simple.

My loan officer opened a HELOC (home equity line of credit) which is akin to a credit card, took out all of the money and paid off the high percentage credit cards and deposited the rest into my savings account.

After doing that, my loan officer converted the HELOC account to a Fixed Rate account where my payments will be $217.00 a month from now on!

That HELOC account was charged $14.00 for interest and draw-down charges which is why there was a $231.00 payment due instead of $217.00

I wrote a check today for the $14.00 on the HELOC account which will effectively close that account!

She (loan officer) did it this way to save me on the appraisal and other fees associated with a regular Home Equity Loan.

I am now in a very good place with a lot more breathing room!

From almost $900.00 a month in payments to $217.00 a month!!!

I still have almost $100,000 equity in my home too!

The Math works out just fine!

Thank You Everyone!!

It all sounds like good news silliessis There is a school of thought that some people would be better off to refinance their houses taking money out & then investing it. I’ve thought about it a couple of times. For me, where I’m living it would be a pretty good deal because houses here don’t normally go up in value very much. And right now our house is worth what I consider an obscene amount of money because of the last oil boom. I just can’t bring myself to do something like that. To me something like that is dangerous.
Anyway the one thing that I would warn you against is don’t do what my BIL did (or does). He tends to get in trouble & then refinance, pay things off & then do it all over again. I think that he’s done that 3 or 4 times. Last I heard his CC’s are maxed out again & he has no equity in his house to speak of. Not saying that you would do that, just warning you that people do get themselves into trouble that way.

Never again!

I wont bore you with how I got into almost maxing my cards but I will tell you that it is easy to do if you aren’t principled and financially aware!

I didn’t refi though.
I just used a part of the $110,000.00 that I have in equity.

The loan is 5.75% interest for 15 years.

With all of the extra money that this has opened up to me, I can pay off this loan in 5 years or less.
(There is no penalty for doubling or tripling up on the payments)

The credit cards, one that I could afford to pay only the minimum would have taken me 22 years to pay off.
That card was going up from 25% to 27% and possibly 29%.

My credit score was 750 and was lower than I wanted only because of credit card utilization.

I was near the max on two cards (75%) and that was hurting me.

Now I have $30,000.00 freed up as far as credit limits go and my ‘utilization’ is at 9%.
Woo Hoo … credit scores will be rocketing!

I would have been a fool to keep paying 20+ percent interest on these cards.

Heck, even if I were to somehow get into trouble … paying $217.00 a month instead of $900.00 a month, my house is valued at $250,000.00 compared to my $90,000.00 of total debt.

In a fast sell I would still come out ahead.

Point is, our fixed income, between my better half and I is over $36,000.00 a year and it would be almost impossible to default on this loan.

Heck, now our total monthly expenses, including bills, food and utilities is darn near what we were paying on those Two credit cards alone!

Like I said … I would have been a fool Not to go this route.

NO I wont be using the cards again except for putting a tank of gas in the car every couple of months … just to keep the cards active.
(Of course, I’ll pay that tank of gas charge off at the end of the month)

It is Very important that you don’t cancel your cards, keep them semi active if you care about your credit.

**It is Very important that you don’t cancel your cards, keep them semi active if you care about your credit. **
I used to be very into finances & money management. I hit the local library & checked out all kinds of books on the subject plus investing books & how the stock market worked. The funny thing is that I never researched anything on how credit worked or how you were rated. I guess that I just figured that you got what you got. About 10 years ago I even financed this house & never even asked what my credit rating was. I know that it was pretty good because they shaved some off of the going rate plus the lady doing the paper work said that the only way that I could improve my score was to make payments on something. I guess that it maybe improved because I do have a car loan that I’m paying. Very low interest so it will be the first car loan that I haven’t paid off early. I kind of figure that my credit rating doesn’t matter anymore because I’m old enough that I won’t make another major purchase.
We did just get another rewards credit card not to long ago. I should slowly be moving my monthly bills to it but just haven’t bothered yet. We get more money back on gas & eating out with it so mostly that’s what we use it for. I love the rewards cards & have done well on them over the years.
The smart thing to do is to have cash put away as an emergency fund. We don’t do that or at least it’s not a goal to us. We use our CC’s for that & then pay them off. This year it kind of bit us in the butt because a lot of stuff hit us in just a couple of months. Taxes, a big crystal buy, paying for my youngest son’s divorce & s sick puppy. The taxes & crystal buy took our cash & then it was CC for the divorce & puppy. Transfusions for our boy alone were right at $1,000 each & he had 4 of them in 2 months (not counting trips to the vet & medications). Who plans on stuff like that happening? I kind of feel that things coming up is just a normal part of life though.