credit card question

[jvin2006]

I have accumulated a bit of credit card debt thru this medical school application process...am paying it off currently but might not have it all paid by time school starts and I have to leave my job.....

Just wondering if there is a type of loan to pay off credit card before school starts and have balance deferred until after medical school (once residency starts)....If not, any suggestions to not have the worry of credit card payments during med school.....thanks

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[mshheaddoc]

I know people who have consolidate private debt into student loans. Some will advise against this but I've done it and will continue doing it because sometimes things happen. If you have extra loan money you can budget your given student loans to pay it off or you can just take out a private loan. They don't ask you what it is for. At least the good thing about med school is that you have access to alot of money ... this is bad for some who do not have money management skills. I would suggest that you try to transfer those balances to a balance transfer offer for a few months and pay it off next year sometime with loan money if you know you will not be able to pay it off.

But that is what I would do ... I'm sure some others would disagree.

 

[IceMan0824]

Here is what you should (might want to) do in your situation(on the pretense that you have good/decent credit)

You should pay off as much as of the credit card debt as you can on a monthly basis without overstressing myself.
When the time comes that you need to stop working, apply for a new 0% or low intro APR card (watch for the time of the APR and the APR after that).
With either student loan or private loan, budget a way to slowly pay off the balance on the new card.

Only do this once!

Good Luck

 

[jvin2006]

I really appreciate the advice from everyone regarding credit cards and the stress it brings. The suggestions made sense to me. If you don't mind..one more question....can anyone recommend a website that compares credit card offers (i.e. balance transfers, etc.), or does anyone know of a good card?

 

[mshheaddoc]

http://www.creditcards.com/

There are quite a few good cards out there. Find one that works for you. And beware that terms change yearly. Like the top rewards card out there (citicard rewards) recently went a revamp and now it sucks.

 

[quinnie]

you might be able to find one that is 0% for a while try that and when the 0% ends transfer to another card for 0% til you can pay it off. ONly downside is credit companies don't like to see you bouncing your credit around

 

[Jocomama]

No, No and NO!!!!

Never do that game. All it does is quickly reduce your credit score via the 3 key scoring agencies for Transunion, Experian and Equifax (Fair Isaac, Beacon and Emperica).
There have been many good suggestions on these posts, but this one is not correct.

you might be able to find one that is 0% for a while try that and when the 0% ends transfer to another card for 0% til you can pay it off. ONly downside is credit companies don't like to see you bouncing your credit around

 

[jvin2006]

Okay, well, I have almost taken the previous advice of finding a credit card with 0% balance transfer till April 2008. My plan is to transfer balance, close old card account, and just continue with the new card. I will have balance paid off by the time 0% expires. Will this plan hurt credit score? My payments on old card have always been on time and more than minimum. Thanks

 

[Proctor MD]

Closing the old card may hurt your credit score, because 35% of your FICO score is calculated by analyzing the debt to credit ratio.

For example, if your current card has a $3000 limit and you have $1000 on it, your ratio is 0.33.

If your new card has a $2500 limit and you transfer the $1000 over, your ratio becomes 0.40.

If instead you transfer the $1000 to the new one and also keep the old one open, your ratio becomes ($1000/ ($2500 + $3000) = 0.18.

So just keep that in mind as you debate this. I think if paying it off is not an option, transferring to a 0% card is a good idea. Just call the credit card company to do it over the phone. This will allow you to discuss waiving the transfer fees associated with balance transfers.

 

[IceMan0824]

Closing the old card may hurt your credit score, because 35% of your FICO score is calculated by analyzing the debt to credit ratio.

For example, if your current card has a $3000 limit and you have $1000 on it, your ratio is 0.33.

If your new card has a $2500 limit and you transfer the $1000 over, your ratio becomes 0.40.

If instead you transfer the $1000 to the new one and also keep the old one open, your ratio becomes ($1000/ ($2500 + $3000) = 0.18.

So just keep that in mind as you debate this. I think if paying it off is not an option, transferring to a 0% card is a good idea. Just call the credit card company to do it over the phone. This will allow you to discuss waiving the transfer fees associated with balance transfers.

The entire point is that you should not close the old credit card. You can destroy the card if you feel like you cannot resist the temptation to not use it, but do not call the company and have them cancel the account.

Also, I would also like to point out that credit score is also determined by length of open credit. That is, how long have you been managing the credit that you have open. Hence another good reason to not cancel the card

P.S. When I made the suggestion to switch to a low or 0% APR, I don't think I stressed enough that you should not make a habit of this. Having too many open accounts also is quick sign of mismanagement of credit and is definetely a red flag. Doing this once so you can afford your payments though is just sound money management.

For this post, you can assume it is safe enough to disregard my signature.

 

[IceMan0824]

Here is what you should (might want to) do in your situation(on the pretense that you have good/decent credit)

You should pay off as much as of the credit card debt as you can on a monthly basis without overstressing myself.
When the time comes that you need to stop working, apply for a new 0% or low intro APR card (watch for the time of the APR and the APR after that).
With either student loan or private loan, budget a way to slowly pay off the balance on the new card.

Only do this once!

Good Luck

Looks like it was edited for me, thank you Jocomama