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Where the sidewalk ends - the end of the 0% game

January 21st, 2009 at 02:20 am

The day I have been dreading for years is finally here - I can't refinance my wug of debt at 0% or 2% anymore. So now it's time to pay the piper, for the CC companies to get even with me for living off them for years now, to the tune of 12% and 14%!! But I can't afford to pay that rate, not without a fight!

So I'm entertaining ideas on what to do next! Every time I look at the taxes and penalty for withdrawing from my old work plan from a job that ended in 1995 that was SUPPOSED to be a savings plan, (a good bit of it is after-tax money), I get extremely shell-shocked. It seems like they force you to take money out of both before tax and after tax at the ratio of assets, which certainly wasn't the deal when I was actively employed at that company.

So my wife is still getting 0% offers even though she has no income, but she doesn't want the debt in her name. But that seems like the only easy way out, although I assume she will have very small credit limits. Discover has a nice deal at 4% until 21014 I think - that should give us time to get it paid off.

Let this be a lesson to those of you out there struggling to stay out of holes like this!

11 Responses to “Where the sidewalk ends - the end of the 0% game ”

  1. frugaltexan75 Says:

    I don't know what to tell you on your situation --- but I just wanted to say that "Where The Sidewalk Ends" is one of my *favorite* books of poetry by Shel Silverstein.

  2. cptacek Says:

    I think this will be (maybe it already is?) an unintended consequence of the 2010 rules about credit cards they passed this year.

  3. PRICEPLUS Says:

    Been there, done that! The piper must be paid. Make a plan and stick to it. Cut spending anywhere and everywhere you can. It can and will be painful.

    If you are in too deep you may need to go bankrupt. Last resort but if you have no means to pay back the money.....

    Best of luck. I know how it feels!

  4. Ralph Says:

    Yes, cptacek, they seem to be calling in their loans. BoA has basically stopped lending as far as I can tell, and they used to be the most free with the lavish credit lines. Wamu has vaporized, and Capital One has comparatively low credit lines, so my options have pretty much disappeared. I used to get big offers for 6.99% personal loans but even they seem to have stopped.

    But I suppose this was needed to make me face the music, since as long as I could surf 0% or 2% credit, there was not NEARLY as much incentive to pay it off. One credit change that DID help was to require bigger minimum payments, I think 2% of the balance, which did help me pay it down this year, but Christmas and some other big expenses like car repair jacked it right back up, so it was just robbing Peter to pay Paul.

    What worries me now is that since BoA has slashed my available credit, my FICO will dive and they'll jack me up to truly usurious rates, and I won't be able to get cheap college loans for my daughters. This is a mell of a hess! All that will be left is to raid my retirement savings, so I better start staking out my cardboard box and underpass right now before all the good ones are gone.

    So job one right now is to convince my wife that it's time to get REALLY serious about cutting back. She tends to think I'm scamming her when I say we're in trouble - a bad situation indeed. Listening to Maxed Out has certainly helped me appreciate the gravity of the situation, and that was written BEFORE the credit collapse!

    Thanks for the moral support, and sorry to be such a Debbie Downer, but I really appreciate the fact that a lot of you have been here and gotten out through savrifice and hard work.

    And frugaltexan, I don't remember the poem but I love that title - as well as Maurice Sendak's "Where the Wild Things Live". Smile

    And PRICEPLUS, I don't think bankruptcy will be necessary, but raiding the reitrement accounts probably will be. Frown

  5. whitestripe Says:

    to be honest if my future husband was in your shoes i would have already set up balance transfers to my name. Smile if one of us cant get balance transfers but the other can then it wouldnt worry me, personally.

  6. Petunia Says:

    If you and your wife haven't really been working together on the finances, it's going to take some slow steady effort to get together. Things can improve with hard work. (And to convince someone of things they really want to avoid is hard work!) Have you looked in to Dave Ramsey? As my DH said, "I already know this stuff", but Dave's main focus is getting couples to work together.

  7. PRICEPLUS Says:

    Ralph, I am very glad you don't have to go the bankruptcy route. A darn shame you have to raid the retirement accounts though. You can and will succeed though!WinkSmile

  8. Koppur Says:

    Your wife might have trouble getting cards even if she is getting the offers. I keep getting an offer for a Discover with 0% and when I apply for it, I am rejected every time.

  9. Ralph Says:

    Good point, Koppur - it seems that credit is tightening by the day, so this will definitely be a wild ride for a country addicted to it. Have you noticed any negative FICO impacts yet from being rejected?

  10. MarianneJ Says:

    I'm looking right now to transfer my balance that is about to go from 0% to 12.99%. Yuck. I have a Citi card that has been at a zero balance since 2006 and I am going to find out if they will offer a good low transfer rate for a nice long time. Ha. Fingers crossed.

  11. ralph Says:

    Good luck on that, MarianneJ! CitiBank is TOTALLY MIA recently as far as any balance transfer mailings. I guess I should dig up my old expired 0% accounts with them that are still open, but I get the feeling as soon as I call them they will close the accounts!

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