- Centurion Member
- Posts: 532
- Joined: Thu Jan 17, 2013 7:20 pm
- Location: United States
An update: After I started cruising this board for a month, I became convinced that the proper plan to change my family's credit situation could be achieved. My wife and I make good money (over $150K) but we'd also racked up a fair amount of debt on our cards due to my son's long term health issues, my wife's long stint in her PhD program (where her income dropped) and poor decisions. I felt that if we could do a plan to get us out of the interest payment debacle we'd put ourselves in with the higher than comfortable amounts on our cards, we could put ourselves in a much better position in 2014. Getting cash back on the purchases was a bonus which meant focusing on the specific products necessary to achieve the goal.
But first things first; I had to convince one of the two credit cards we carry (Amex Platinum was the third) to increase our limit and I hadn't asked for a CLI in years. We found a very receptive agent at Chase who increased our limit from $13.5K (with 95% util!) to $25K, and transformed our lowly Slate card to a Freedom. Armed with this, I went to BofA and asked for a CLI there too. We had the same situation...$13.5K CL, 95% utilization. BofA gave me $20K (which is what I asked for), and moved that product to their Cash Rewards card. Overnight we'd gone from $26K to $45K mainly because despite our high utilization numbers, I still managed to have a squeaky clean credit report, and therefore scores at all three agencies at about 745 and FICO at 723.
Next was PenFed, a place we had no history at. I wanted PenFed PRV for a dual role...to swallow $28K of our debt I considered toxic for a 18 month 0% interest burn down period, and for their cash rewards program for gas and groceries. It was the most important part of the plan. Well PenFed came through yesterday and gave me the entire $28K I asked for. Now we're at $73K CL and really in a better position. My wife is thrilled. We can spend the next year eliminating this debt under a plan we consider practical for our budget while getting some cash back along the way.
Next stop in the plan is to do two things, check on a refi for the house and round out the credit cards for a few additional cash back cards. The house refi will depend on a few things but even if that doesn't happen, I cannot complain that much about our mortgage situation...it's good now as it is, but I can do a little better at our CU. As far as what next card to get, I have a 2% card, USBank Cash +, Discover IT and Amex BCP on the hot list. I figured out from Quicken that we are likely spending upwards of $40K or more a year in cash flow for purchases not in the usual categories offered by cash back cards. So while we were getting 1% from Chase and 1.1% from BofA on these purchases, a 2% card makes a lot more sense. I will approach Fidelity about that since my 401K is already with them and I have six figures under management there. My wife has wanted to add more to her IRA and this is actually a nice painless way to force us to do more savings...we might add as much as $1000 a year just by doing nothing special.
Then I want to approach US Bank for their Cash + product for some additional 5%s (I'm eyeing restaurants and utilities) and the Amex BCP card, which ironically with their new caps has the lowest money saving potential of all the products and probably the Discover IT. Since I want to properly manage our inquiries, I'll wait until after I determine our mortgage refi status to go for these and I will likely have my wife to apply for them. This will be interesting since my wife has one baddie we're still disputing now. Somehow in the last four years she has a Comenity store charge off...for $19. Yes, this is completely bogus and ridiculous but we found out that it was sinking her scores by about 60 points compared to mine. But the CLI we earlier received got her scores back to 700 at EQ. Doing the balance transfer to Penfed will temporarily goose her scores since a lot of her charges will disappear since she's not on the Penfed...it's just me for now. At that point she should be able to go for those three products without issue, even with the baddie since I think her scores will climb to the mid 750s.
So to review:
Old state: Amex Platinum, Chase Slate, BofA World Mastercard (total $26K CL, 95% util)
Current state: Amex Platinum, Chase Freedom, BofA Cash Rewards Mastercard, Penfed PRV (total $73K CL, 40% util)
Future additions: Fidelity (me), US Bank Cash + (wife), Amex BCP (wife), Discover IT (wife) (total $??? CL)
I think getting to $100K of CL and under 30% utilization is not out of the realm of possibility, even at the beginning of our principal burn-down schedule. Total cash back bonus at future state is estimated at $2000+ annually. And we have thousands in interest charges that we'll not pay this year. Thanks to all here for your help in making this possible.
American Express Platinum (NPSL)
Penfed Platinum Reward Visa ($28K)
Chase Freedom Visa ($25K)
Fidelity American Express ($20K)
American Express Blue Cash Preferred ($20K)
Bank of America Cash Rewards MasterCard ($20K)
Citi Thank You Preferred Visa ($9.5K)
Chase Sapphire Preferred ($7.5K)
US Bank Cash + Visa Signature ($7K)
Discover IT ($4K)