The credit card companies are smart business people. A local guy who wrote a book, "Financial Freedom Witout Sacrifice", says that we should teach a great deal more about common sense money management in schools ... but we don't. Have you ever heard the slogan on TV, " ... You deserve it!"? TV teaches us that our wirth is bound up in the stuff that we have. And they are totally nconcerned, now with the stuff that we bought last week - that's ancient history! The thing to do is *buy* - *now*! Remember - that was the first thing that Mr. Byush said, after 9 - 11. In fact, some say that there are some common characteristics between the management of TV programming relative to the commercials and hypnotism. The progams sure like to leave the suggestion in your mind that you need the product that they're shilling. How would you like to earn nearly 40% on your money? Guaranteed! If you have one of most store-issued "credit" cards ... the rate of interest that they charge is about 25 - 28%, on an annual basis. Most of the stuff that most of us buy on the card is not deductible. So we must pay for stuff bought in those stores with after-tax money. Divide 28% by 3, you get 9, then add the 9 to 28%, gives 37%. If you're in 25% marginal tax rate, 1/4 of your earnings goes to tax, so you divide 37% by 4, get about 9% going to tax, leaving 28% after-tax residue in hand to pay off he debt. If you always paid your credit card balance off in full each month before the due date, no interest fee. If you charge so much stuff on it that you can't pay it off before the due date, you must start paying those high intrerest rates. Hey, lookie ... you just gave yourself a guaranteed reduction in income, next year (unless you get a substantial raise)! Would you give even a second's thought to asking your boss to reduce the amount that the company pays you easch payday? But that's precisely the kind of boot in the tail that you just arranged for yourself. Trouble is - you probably didn't even notice it!! If you don't boss yur money (and learn how) ... it'll boss you!! Have yourself a great week. ole joyful

9 active cards may be a temptation, but the fact is that the credit companies look at how much of your available credit you've used up. So, say you have 10 cards that have a limit of $1000 each--total $10,000. You owe $800/card--total $8000. You pay off one card, so your total owed is now $7200. That's 72% of your credit limit. Now, if you cancel the card you just paid off, your total credit limit is $9000, and the $7200 is 80% of that. The percentage of unused credit has gone down. This makes you look like a worse credit risk than if you had left that card account open--even though you're improving your handling of money by paying off cards. Don't cancel any cards unless you're really a serious shopping addict and will spend the day buying on QVC using account numbers off your old statements out of the file cabinet. Instead, freeze them in a block of ice, put them under the mattress, even cut them up--just keep the accounts open. At least until you've gotten several cards paid off. I actually like Karla's system a lot. As an aside, i'm always surprised at how many cards my credit report shows i have. There are a couple of store cards that I haven't seen in years, but they're still on there. To say nothing of the fact that AMEX for some reason has me down as having had something like 5 cards, when I've only ever had 1 at a time. Go figure. They must have counted each time the acct number changed or something. So 9 cards isn't really too bizarre. To make it even more confusing, I've gotten 'adverse action' notices a couple of times (that's where they send a form letter saying that something in my credit made me get less than the absolute best deal). In the 'reasons' section, it said both that I had too many credit accounts and too few. Huh? WTF? Be sure before you start house-shopping to pull at least one copy of your credit report (DH's too), and pay the extra money for your credit score. Make sure you've gotten any errors handled.

TT a couple of answers and questions... First, A debit card is not a debt obligation no matter the name stamped on the front so no it does not assist your credit score nor cause a negative effect. Secondly, it's not a major carrier card that is an issue, it's something called "revolving debt" (all credit cards qualify equally as revolving debt). It does not need to be a card with a VISA on it, sears is equally the same in the world of credit, it's revolving debt. So what they're looking at is how you use your revolving debt and how you pay it. You want your total revolving debt to not be a huge number, and you never want to be extended past 50% of your allowable limits (so if you have ten grand in revolving debt available you want to average under 5). So if you have some and it's not over extended and you've paid on time you're ok there. I don't expect you to tell me what the bumps are so I want to give you a few examples of "ok bumps" to see if it helps and a couple of not ok bumps so you can get the lay of the land there as well. So ok bumps are a couple of late pays (30 day maybe 60 but preferably 30 day late). Another would be over limit during that time, but paid down now. Collection accounts that are explainable but are paid now. And not many of those (like two would be tops). OK so it's a business loan...first, I'm having some email problems (someone got my password and has been screwing up my account) so don't email me any answers to these questions or anything (just in case...I don't want anyone's personal info mussed up). So I'm going to ask hypothetical questions as if you were at my desk but I 'm not expecting answers...I just want to make you think before you go in for the loan. OK first pull up your credit info (both of yours) and see what your scores are. If they're in the 700 you're ok...if they're in the 300's you are going to have a great deal of trouble with the business loan. Or as Rickie would say...you got some splain'in to do. How's your equity situation in the house? Would this loan fit in an under 80% scenario (loan to appraised or tax assessed value). A business loan with personal collateral is easier to get than a straight loan especially if you don't borrow much. Please tell me you report all ofyour business income and keep decent financials! I can't tell you how many loans i turned down that probably could have been approved if they actually reported their real earnings. What you say you get verses what you report...well that's between you and the IRS....as a banker I only care about what you report. What's your collateral? If there are assets (aside from personal) that helps, but don't expect a huge LTV on them. Receivables can be taken on a line of credit or loan via UCC if they're formally tracked and under 30 days (unless you do business for a major company who pays slower and you can prove that). What are your receivables? I mean be able to explain who owes you money, who pays you, who's your client, so the banker can make a judgement about your ability to continue working. All business loans are judged to be paid back from cash flow. Does your business cash flow support the repayment on this loan or are you counting on future cash flow from business that will be happening because of this loan. That's an issue...banks own on past history, not so much future history unless it's under contract. Is there a future contract? Bring it with you because it's support for the loan. If you're buying assets, know that the bank wants you in the game too. Many times businesses come in and ask for 100% financing for whatever and the bank's position is that if you're (the business owner) not willing to take a risk on you, why should they? Do you have five years of good financials? Three? IF there are solid profits, consistant earnings, it's easier. If you have huge ups and downs, be sure to be able to explain them. The bank will average the three years or five to determine what your cash flow is really like. And last but not least...know what you do for a living and who your competition is. You'd be amazed how many people used to come and and say "I"m gonna be a XXX" and I'd ask why they were going to be so much better of an XXX than the other 40 XXX's in town. Sell your business to the bank...why is your X so hot? Is it the oldest X, the best client service? What and what keeps you in business in this economy? I hope that helps some? The type of credit you're applying for makes a difference as well. A line of credit is harder to get than a term loan. Collateral counts, and what's the biggest thing....who the heck are you dealing with at the bank? Don't go in and ask a freaking teller for a business loan app. Wait and speak with a business banker (make an appt) don't deal with the 24 year old hottie in new york too hot for her job...oh wait another subject, but actually the same, skip the brainless front desk and ask for a business banker! I approved more loans that had been turned down by branch staff than you can imagine in my career, just because they didn't know what to ask, so when the package when it, they didn't know how to sell it to credit.

I can give you a simplified answer. If both cards have fixed interest that can't be changed by them, and there are no other charges added by USAA at the time you switch your debt to them, then it sounds like switching makes a lot of sense. I'll give you a simple and not totally, mathematically rigorous assessment...but it will be close enough. If you have left out any details about the USAA offer, then my answer might be somewhat different. If you stay with the first card, you pay 8.5% per year. If you switch to USAA you have 0% the first year, and 9.5% thereafter. For simplicity, I am assuming that the balance you owe doesn't change (even though I know you will be paying it down). So, at USAA, in the first 2 years, you will have 0% the first year and 9.5 % for the second year; that is approximately 4.75% a year averaged over the 2 years. If you look at 3 years with USAA, you have 0% + 9.5% + 9.5% = 19% over 3 years, or about 6.2% per year. Even at 5 years, the average interest works out to about 7.6% per year at USAA. At some point, the average interest at USAA will become more than 8.5%, but hopefully the balance will have been long paid off at that time. The other important thing is that you would be getting out of interest payments for the year when your balance is supposedly highest, and where the interest charges add the most to your ongoing debt. If you have the discipline, this means you can really cut down the debt load during the first year because all of your payments will be paying off principal. On the other hand, if you treat this first year as a period when you can run up more debt, then you will have thrown away an opportunity to get out from under this, and may even be in worse straits than you are now. I'm not saying you can't charge essentials to the card, but you have two things to deal with here: maximizing what you can do to pare down your debt by maximizing payments, and altering the habits that got you into this situation in the first place. If you don't act on both of these things, you're going to continue to be stuck a year from now. I'm not trying to lecture; I'm, just speaking with the voice of my own experience from when I was in your shoes years ago. I may be able to give you a little more refined answer if you could give me three pieces of info: 1) The current size of your debt. 2) The maximum monthly payment amount you can handle on a continuing basis. 3) The monthly amount that you might add -- if any -- in further charges. This post was edited by kudzu9 on Wed, Nov 5, 14 at 21:08