Amex Cancelled My Account

Add me to the statistic. Another unhappy customer of American Express. I got the Blue Sky Card last September when it had advertised 12 months of 0% balance transfers and purchases. I was carrying a balance of within 1k of the credit line for the whole time. I had been making on-time minimum payments every month. Meanwhile I had the money to pay off the balance in a savings account earning interest. Lately, with the measly 1.5%APY rate, I did not feel it was worth carrying the balance anymore. I paid the balance in full on a Thursday.

Friday we left for a long weekend vacation. Card was denied at a small coffee shop. I thought it was weird but it didn't bother me too much. They still had the dial up machine so I assumed they just didn't accept Amex. Saturday went to use it somewhere else, denied again so I just figured I'd call later on.

After vacation I call Amex and they inform me that my card was canceled. A "regular check" of my credit report revealed that I likely would not have the ability to repay the card. Trying to stay calm I tell the operator I have just make a 7,000 payment on the card to pay it off. How could I not repay? He says, "Your large payment on your account on the same day is just ironic." Man, did that line really make me angry! The he continued to read every other line on his cue card. I realize its a losing battle and there is nothing I can do.

They canceled the card immediately (within hours) after the balance was paid. Looking on-line, thousands other have had the exact same thing happen. With the same exact reasons stated. Had I not paid off the balance I still would have the card.

I understand them trying to reduce their risky customers. They have every right to do so. But to make up false reasons? Also, I was never informed of my account being cancelled. I received a letter 2 weeks after my phone conversation. It is ridiculous! They have my phone number and I get email account alerts for practically everything. But not once was I informed. That is just a sleezy way to do business.

Oh, and since it was a third of my credit line across all my cards. It now looks like I have maxed out every credit card I own. Even though I just had paid down 7k+. Good thing I'm not looking for a loan in the future.

6 Months Later

It has been 6 months since my last post. I can't say too much has changed since then. The one major change is my attempts at enforcing a budget to ensure we will meet our payoff deadlines of the balance transfers I took out to pay off my car. No real problems so far. I will probably provide a post later on to detail how it has gone so far. But that's not for now at least.

I figure I will take a stab at starting this up again for a few reasons:

1. To get thoughts that would normally drive me crazy in my head, off my mind. Lots of stress and worries these days mainly about money.
2. To make me think my decisions through a little better. Organize my thoughts on money things.
3. Have a record to look back on as I progress in paying down my debts. Looking back at the first few posts encouraged me seeing how much I've already paid off in a few months. Every little bit really did help I guess, even if I don't see the difference right away. $5 here and there out of 100+k is hard to stay motivated sometimes.
   
4. Who knows, maybe someone in the same boat (tons of student loans) will come across this blog and be inspired. At least they will feel company that they aren't the only one and things can change.
5. And this is a long shot. Maybe (I really doubt it) a blog will help my writing skills. Writing coherent sentences and organized thoughts has always been my downside. As you can probably tell already.
   

Well I'll try again whenever topics come across my mind. We will see how long it lasts.

With that out of the way. Now for the numbers:



So we have made some progress. More or less on track with what I planned for mid-year. This has us with about 25k paid off in the 6 months of 2009, which is more than was averaged per year for 2007 and 2008. I guess the only thing is to keep going and stick to it. As there is still 4-5 years left of this crazy repayment.

All I can do is look forward to the day where the $4,000 out of every month is going in mypocket instead of the banks! That will be nice.

Car Loan Traded for Credit Card Debt

Well I have successfully paid off my car loan. Actually just awaiting the title in the mail right now. And it feels good. Well actually I have transferred the entire balance of $22,000 to credit card 0% offers in order to reduce the amount of interest paid over the next year. I know it is risky but I have carefully thought this over and examined all the risks before making the final decision.

Considerations/Risks
Risk: Credit Report – I have delayed plans to save for a downpayment and buy a house due to the amount of debt I hold. With my repayment plans I have no need for applying for any type of credit since I have a relatively new car, and am not looking for a mortgage for 3+ years. The huge hit to my credit score does not matter to me.
Risk: Repayment – Loss of Job – My job is pretty secure. So I’m hoping I have no worries for this. As a backup, if anything drastic were to happen I could sell my car to payoff the balance transfers. If I lost my job I wouldn’t be able to afford it anyway.
Repayment – Overspending so there would not be enough saved at the end of the promotional offers. This is what I’m most concerned with. As I’ve tried having a budget for the past year, and have never once been able to stay within it for a month (in any category!). If I really need to I can tap my $2,500 Emergency Fund when 12 months is up and then build it up within a month or two. So I’m 50/50 for my feelings on this one.

Well, I chose my car to use the money towards since I can always sell it if anything goes wrong, and not have to pay the back interest. I have a detailed spreadsheet covering the next year of extra savings and minimum payments to ensure I will always have enough money for minimum payments along with the full amount for payoff at the end of the 12 months. With this I’ll be able to sense if I’m heading towards failing and change my habits.

Now I have been thinking about selling my car in order to expedite my student loan payoff. At the moment I am still undecided. Yes, I know its insane to have 25,000 loan for a car when I already have 175k in student loan debt (combined with fiancé). But its difficult to stomach the depreciation in 18 months. And the low-ball values that the guides are giving me. I mean I knew there would be new car depreciate but is a $9,000 depreciation over 18 months reasonable? I think I’ll at least wait out the market a little or wait until spring since it is a convertible and I can get a more decent price.

Also, I’m thinking about waiting to sell until I either relocate for work or move apartments at the end of my lease in August. Then we could move to an apartment close to one of our works and possible downsize to one car. I’d be more willing to sell if I didn’t have to then buy a car immediately after. Time will tell on this one.

To Start or Not

I'm sitting here deciding as to whether or nto starting this blog and sticking to it. How much will it help? Are there others it will help other than me?

I've been feeling kind of hopeless lately about the amount of debt hanging over my head.

$199,499 to be exact. Of course $102k is in my name, with the remainder to my fiance.

Its horrible to know that I'm starting off with this much debt. Today I decided to look back and see where I was 2 years ago, directly after starting work. To see if I have made progress, if any.

Adding everything together, our original loan balance (after accrued interest through school) was $241,237. Detailed as follows. Note: Some of the balances are estimated, since online doesn't track past one year. I have estimated the original amount based on the payment schedule.

Hers: Original Loan Balances
Student #1 - $22,034.07 @ 4.875%
Student #2 - $16,500.00 @ 6.5 %
Student #3 - $55,000.00 (Estimate) @variable (current 6.1%)
Student #4 - $5,000.00 @ 5%
Car - $33,100.00 @7.99%

His: Orginial Loan Balances
Student #1 - $26,132.80 @ 5.875%
Student #2 - $58,421.00 @ 8.6%
Student #3 - $2,500.00 @ 5%
Car - $22,550.00 @ 4.9%


Total:
$241,237.87

I knew it was high, but I never realized it was that high. Such an outstanding number. Although buying a car way out of my league, on a whim, didn't help the figures that much. Anyway, this has us with paying off ~42k over the past 21 months, which is nothing to be ashamed of. But most is due to minimum payments, I wish I had added more.

My goal is to pay off all debt at >5% by YE2013. Possible? Yes. Probable? Depends how disciplined I am. I guess time will tell.

Revamp of Accounts

Revamping all of my financial accounts.

Since last months disastrous over-balance and overdraft fees, I have finally decided to revamp all the links and payments to and from all my accounts. I figured, at the same time, I might as well set them all up in a way that forces me to stay within budget. Now I don’t think my budget is unreasonable, it is just hard to control myself when everything goes on a credit card. So from now on I am only using 2 credit cards… well make that 3… actually 4. Let me explain.

Before:
1. Direct Deposit Orange into Electric Orange
2. Auto Pay Loans from Electric Orange
3. Spending money on whatever credit card I got my hands on first. Balance paid in full at the end of the month.
4. Never really stayed in budget, everything would get spent or lost.

After:
1. Direct Deposit Orange into Electric Orange
2. Auto Pay Loans from Electric Orange
3. $100/mnth auto pay to separate account for car insurance
4. $600/mnth (auto) spending money to debit card account
5. $300/mnth (auto) to separate account for “Fun Fund” gadgets, vacations, etc.

Credit Cards:
1. ExxonMobil Card – Gas only; Budgeted for $375/month (Cash Back)
2. Driver’s Edge Card – Groceries only; Budgeted for $450/month (6% Cash Back)
3. Chase Card – Cable/Netflix - Autopay of both the bill and card - $185/month
4. (2) Citi Cards – Non-monthly purchases (to keep the cards current)

I always thought it was a little crazy to have bank accounts for several goals. But I thought I would try it out and see if it could break down the budget a little easier. Instead of just having a lump sum and spending it like crazy. I also think I can better control my non-regular monthly expenses like clothes and vacations better if I know I am setting aside for them. If there is a known balance I can spend and a certain amount is being added each month… it’s not so bad to say next month I can buy it because I will have enough money. In contrast to what I used to do, “I need to save money so I can’t buy it (ever!)” Then I give in and buy it anyway because I can’t stop thinking about “needing” it.

The hardest part of this whole ordeal will be ensuring I have all the proper links between accounts. Since they are all with different banks (from when I previously would chase the highest interest rate) there are all the limits on links, the waiting and approval periods, trial deposits, all that BS. So I have separately made a list of all the links I need and will be working through setting them up over the next week or two. I am also purposefully going to delete links that I don’t need in order to stop me from doing something I shouldn’t.

What to do with the leftovers. Not quite sure how to tackle this. Want a system which will reward me for going under budget on things like groceries, by allowing me to add to vacation fund. But I also want something which will stream extra money towards my loans. For now I’ll take the easy road out.

Leftovers from anything paid out of my Electric Orange (gas, groceries, cable) will go towards loans. And anything leftover from monthly expenses will go towards my Fun Fund.

After spending way too much time figuring this out the only thing left to do is to get my other half to abide by it… I pay the spending bills he pays the rent. Pretty much evens out…

Baby Steps to Reach Goals

Instead of just trying to strictly stay to a budget (and failing) I thought it might be easier to achieve if I set smaller goals or steps to bring me there. Best way is to divide it into long, mid-, and short term steps. Here is what I have come up with so far. Hopefully by trying to follow these achieving my goals may be a little smoother. Probably update as time moves along, but here is my first shot at it.

Long Term (3+ months)
1. Have serious conversations with b/f about what we can accomplish by sticking to a budget.
2. Max out pretax 401k
3. Reduce debt by $22k by YE2008 (~21% of total debt load)
4. Save for non-monthly expenses (ex. Car insurance, car tax)
5. Re-evaluate budget every 6 months.

Medium Range (monthly)
1. Stick to budget and categories
2. Add leftovers to savings and loans
3. Keep emergency fund stocked at $2,000. If go under replenish within 3 months.
4. Goal: Reduce debt by $2,300/mnth
5. Pay bills on time for no fees.

Short Term (daily/weekly)
1. Drink less during the week (aim for 1 beer or less most week nights)
2. Use a wishlist for non-necessity purchases. See if actually want/use.
3. Make lunches 4 days/week
4. Grocery shop with a list and less often.
5. Go to work earlier to beat traffic and save gas.
6. Keep A/C at minimum

April - Driver's Edge Statement

So my mid-month credit card statement finished yesterday. My Driver's Edge card that is only supposed to have groceries on it.

Total: $1,450.04
Groceries: $520.00
Dentist: $545.00
Beer: $125
Other Exp. (Remainder)

So not what I wanted to see, although I knew it was coming since I check it religiously daily. I don't know how it gets so out of control... Really, $520 on groceries for two people. I really need to drag that on in. My original budget of $350 (which I still thought was high) is blown out of the water.

Goal: Keep groceries under $400 for the May statement. I think this shouldn't be too hard. Mainly need to reduce the number of times we go to the store. Usually we end up going at least every other day and spending $20-$30. Need to start planning out the week.