WEBVTT - The BA Q&A: $60,000 In Credit Card Debt! 0:00:06.200 --> 0:00:09.760 Hey, Hey, ba fam, It's Mandy here for another episode 0:00:09.800 --> 0:00:14.240 of the Baqa the Baqa. I hope you guys are 0:00:14.280 --> 0:00:17.119 having a wonderful start to the month. I am so 0:00:17.320 --> 0:00:19.959 excited to be here taking all of your wonderful questions. 0:00:20.040 --> 0:00:22.520 Hit us up at Browndambition podcast dot com. Let that 0:00:22.600 --> 0:00:25.680 be the first stop on your tour of our website 0:00:25.720 --> 0:00:27.479 or brand new website. If you haven't seen it, please 0:00:27.560 --> 0:00:30.040 check it out. It's beautiful if I do say so myself. 0:00:30.480 --> 0:00:32.680 And while you're there, ask us anything. You can email 0:00:32.760 --> 0:00:35.159 us at brand Ambition Podcast. Through the website. You can 0:00:35.200 --> 0:00:37.839 find out how to find us on Instagram through the website, 0:00:37.880 --> 0:00:41.360 so bronambitionpodcast dot com. I cannot wait to get your 0:00:41.440 --> 0:00:44.800 questions anything career of money. I am your girl and 0:00:44.880 --> 0:00:48.320 thank y'all again for the continued support. What else is 0:00:48.360 --> 0:00:51.360 happening in my world? Y'all know I'm coming up on 0:00:51.440 --> 0:00:56.720 a year of Mandy money. I can't believe it. Oh man, 0:00:56.840 --> 0:00:58.760 it's almost been a year. I gotta figure out how 0:00:58.760 --> 0:01:01.040 to plan a party. If y'all have any ideas of 0:01:01.080 --> 0:01:03.720 how to celebrate a year in business, just let me know, 0:01:03.880 --> 0:01:08.600 because my my deep you know, Leo Hart here the 0:01:08.720 --> 0:01:11.680 lion wants to dance. Okay, I want a party. I 0:01:11.720 --> 0:01:13.839 love an affair. I love to have a good time. 0:01:14.000 --> 0:01:16.880 So I'm just thinking back on a year in business. 0:01:17.000 --> 0:01:20.399 It's tax season right now, and for any entrepreneurs out 0:01:20.400 --> 0:01:23.880 there who are like sweating it, you know, first quarter 0:01:24.000 --> 0:01:27.520 taxes and then closing out taxes for last year. My 0:01:27.640 --> 0:01:30.800 accountant is my secret weapon. And I'm not even going 0:01:30.840 --> 0:01:32.440 to sit here and pretend like I know a bunch 0:01:32.480 --> 0:01:34.920 of stuff and can and give lots of advice on 0:01:35.160 --> 0:01:37.720 how to, you know, manage your taxes this time of year. 0:01:37.760 --> 0:01:40.480 But my biggest piece of advice is to don't stick 0:01:40.520 --> 0:01:43.360 her head in the sand. Actually go ahead and hire someone. 0:01:43.440 --> 0:01:46.800 It is worth the money, not only to find an accountant, 0:01:46.840 --> 0:01:49.559 but also to find a bookkeeper. Even in the first 0:01:49.760 --> 0:01:52.200 quarter of this year, I didn't think I did anything 0:01:52.240 --> 0:01:55.120 that funky, But when I tell you, my bookkeeper had 0:01:55.160 --> 0:01:58.800 about twelve thirteen different questions for me to answer and 0:01:58.960 --> 0:02:02.800 line items and my expenses and my income to figure out. 0:02:02.880 --> 0:02:05.240 Oh my goodness. So I'm so glad I'm getting on 0:02:05.240 --> 0:02:07.960 top of that. Where did I find my bookkeeper and 0:02:08.000 --> 0:02:11.040 my accountant? I asked a friend. I asked a fellow 0:02:11.040 --> 0:02:14.079 business owner, you know, where do you do your taxes? 0:02:14.520 --> 0:02:16.880 And I asked someone local so that I could find 0:02:16.919 --> 0:02:20.079 someone local, and fortunately I interviewed them both and their 0:02:20.200 --> 0:02:22.880 husband and wife duo, and they are fabulous. So if 0:02:22.880 --> 0:02:25.679 you're someone who's whether you've just launched a business or 0:02:25.680 --> 0:02:27.560 you've been in business for a couple of years, I'm 0:02:27.560 --> 0:02:30.760 talking to you, nubie entrepreneurs like myself, go ahead and 0:02:30.800 --> 0:02:33.880 outsource that and get some help. It makes me feel 0:02:33.880 --> 0:02:36.240 so much more at ease, and it makes me not 0:02:36.720 --> 0:02:39.400 fear that I'm going to have a nasty letter from 0:02:39.440 --> 0:02:41.800 the Irs hitting my mailbox any day now telling me 0:02:41.800 --> 0:02:45.360 that I owe them eleveny million dollars. Okay, so happy 0:02:45.400 --> 0:02:48.720 tax season to all of y'all. Also, my goodness, it's 0:02:48.720 --> 0:02:50.799 been almost a year in business, and y'all know, when 0:02:50.800 --> 0:02:54.000 I started Mandy Money, I created my own website myself. 0:02:54.320 --> 0:02:57.120 Squarespace is a sponsor of the podcast, but even before 0:02:57.160 --> 0:02:59.600 they became a sponsor, I was a fan. I used 0:02:59.600 --> 0:03:03.799 Squarespace to create mymandymoney dot com website, and I have 0:03:03.880 --> 0:03:07.359 to let y'all know there is a whole newmandymoney dot 0:03:07.360 --> 0:03:09.880 com for y'all to check out. You can check it 0:03:09.880 --> 0:03:12.440 out mandymoney dot com. It's Mandy with an I. I 0:03:12.720 --> 0:03:16.560 partnered with the same badass web designer who did the 0:03:16.600 --> 0:03:19.560 new brand Ambition podcast dot com. Her name is Shirleyansley. 0:03:20.000 --> 0:03:25.120 She is amazing black woman, mama partner in crime for me. Now, 0:03:25.160 --> 0:03:27.880 for all my website needs check out, I'll put a 0:03:27.919 --> 0:03:29.720 link to her website in our show notes. And I 0:03:29.760 --> 0:03:31.320 told Shirley I was going to do it, and I 0:03:31.360 --> 0:03:35.119 was like, you're probably not prepared for lots and lots 0:03:35.160 --> 0:03:36.800 of people to want to work with you. I think 0:03:36.840 --> 0:03:40.040 she's already sold out and booked for the next few months. 0:03:40.080 --> 0:03:43.560 But she deserves all of her success. She's great at 0:03:43.600 --> 0:03:47.440 what she does, and as a fellow mom and entrepreneur, 0:03:47.480 --> 0:03:50.040 I gotta support my girl, Shirley. So I will put 0:03:50.040 --> 0:03:53.160 a link to her website. She is phenomenal and I'm 0:03:53.240 --> 0:03:55.720 so happy with the new look at mandymoney dot com. 0:03:56.000 --> 0:03:59.440 All right, Well, with that being said, let me get 0:03:59.480 --> 0:04:01.720 on into the inbox and see what kind of questions 0:04:01.800 --> 0:04:03.800 y'all have today. All right, so today's show is going 0:04:03.880 --> 0:04:06.640 to be all about money, honey. Our first question comes 0:04:06.640 --> 0:04:10.320 from an anonymous listener who had the courtesy of giving 0:04:10.400 --> 0:04:14.720 me her own pseudonym, and I'm a fan Balance transfer Bell. Hello, 0:04:14.840 --> 0:04:18.960 balance transfer Bell, let's talk. My question is, with interest 0:04:19.000 --> 0:04:21.400 rates going up now that the FED is working on inflation, 0:04:21.600 --> 0:04:24.600 should I lock in the zero percent balance transfer rates 0:04:24.600 --> 0:04:27.040 that my credit cards are offering with a three percent 0:04:27.080 --> 0:04:30.240 transfer fee or wait until the next offer comes along. 0:04:30.640 --> 0:04:33.560 Here's some context. I've been for the last two years 0:04:33.680 --> 0:04:37.560 rolling over approximately sixty thousand dollars of debt on credit cards. 0:04:37.800 --> 0:04:40.160 I have been under employed during COVID and in a 0:04:40.240 --> 0:04:44.240 precarious living situation. In order to keep all those plates spinning, 0:04:44.600 --> 0:04:46.800 I decided it was better to borrow the money from 0:04:46.800 --> 0:04:49.880 myself and deal with the three percent balance transfer fees 0:04:50.279 --> 0:04:53.119 and make sure all my bills like student loans, card notes, 0:04:53.120 --> 0:04:56.440 rent were paid on time. As a result, my credit 0:04:56.520 --> 0:05:00.000 isn't great because my balance to limit ratio are high, 0:05:00.279 --> 0:05:03.159 but I have zero issue paying my bills on time. 0:05:03.640 --> 0:05:05.480 I've been doing this now for two years, and I 0:05:05.520 --> 0:05:08.320 honestly believe this is the year when I'm finally going 0:05:08.400 --> 0:05:10.280 to get a decent job and be able to pay 0:05:10.360 --> 0:05:13.560 down this loan. But a few additional things about this 0:05:13.720 --> 0:05:15.919 sixty K worth of credit card debt that I have 0:05:16.000 --> 0:05:19.600 been rolling along, so they're spread against different cards, and 0:05:19.640 --> 0:05:23.320 they all have different terms that are up at different times. 0:05:23.640 --> 0:05:25.760 I know I need to move the money before those 0:05:25.880 --> 0:05:28.960 terms expire so I don't get hit with additional interest. 0:05:29.400 --> 0:05:32.039 But the offers come when they come, so there's no 0:05:32.160 --> 0:05:35.680 guarantee that a new zero percent balance transfer offer will 0:05:35.680 --> 0:05:39.320 come in time. Also, I should let you know that 0:05:39.400 --> 0:05:41.560 I put a large amount of money that I had 0:05:41.560 --> 0:05:44.520 sitting in savings in the stock market. I didn't need 0:05:44.520 --> 0:05:46.760 to use all the money, but I wanted to make 0:05:46.800 --> 0:05:49.480 sure I could make my minimum payments and have an 0:05:49.520 --> 0:05:52.640 emergency fund. I want to leave that money in the 0:05:52.680 --> 0:05:56.400 market in order to not take a loss. I know 0:05:56.480 --> 0:05:58.720 it's a lot, but I want to leave my money 0:05:58.720 --> 0:06:01.440 in the market, invest and pay off these loans in 0:06:01.440 --> 0:06:03.320 the next year and a half. But I want to 0:06:03.400 --> 0:06:06.720 know if the next balance transfer offer that pops up 0:06:06.839 --> 0:06:10.320 overlaps with my zero percent offer, should I jump at it, 0:06:10.520 --> 0:06:13.320 because even with the added cost of a balance transfer fee, 0:06:13.760 --> 0:06:16.960 it could be a safer bet since rates are finally rising. 0:06:17.400 --> 0:06:19.919 Let me know what you think. I appreciate all that 0:06:20.000 --> 0:06:24.440 you do, oh Man, Balance transfer bell, this is a doozy. 0:06:24.680 --> 0:06:27.080 So sixty thousand dollars worth a credit card debt, you know, 0:06:27.120 --> 0:06:29.600 I got to give you major props because you actually 0:06:29.640 --> 0:06:33.320 took advantage of a very useful tool via a zero 0:06:33.320 --> 0:06:36.440 percent balance transfer offer, to keep that sixty k from 0:06:36.520 --> 0:06:39.640 spiraling out of control. It's a lot of credit card debt, 0:06:39.640 --> 0:06:42.520 and because it's spread across different cards, it's still a 0:06:42.560 --> 0:06:45.160 lot to juggle. Yeah, to keep up with those term 0:06:45.240 --> 0:06:48.679 expiration dates. I hope you're reading the fine print because 0:06:48.760 --> 0:06:50.760 you could get a hit with additional interest fees, but 0:06:50.800 --> 0:06:54.000 you can also have deferred interest clause, which would actually 0:06:54.040 --> 0:06:56.000 go all the way back to the beginning and when 0:06:56.000 --> 0:06:58.920 you open those credit cards and smack all that interest 0:06:59.080 --> 0:07:00.880 onto your balance, so it would be like you were 0:07:00.880 --> 0:07:04.120 paying interest all along. So you're left not only with 0:07:04.160 --> 0:07:06.680 those interest charges, but also way more debt than you 0:07:06.720 --> 0:07:10.400 actually started off with. My biggest concern, and my question 0:07:10.560 --> 0:07:13.360 is have you actually been making payments on these credit 0:07:13.400 --> 0:07:17.000 cards or just shuffling them around, Because shuffling them around 0:07:17.160 --> 0:07:19.960 is savvy, but if you're not actually putting a dent 0:07:20.080 --> 0:07:22.560 in them, then you're really just kicking the can down 0:07:22.600 --> 0:07:25.600 the road and you're creating more stress on yourself, and 0:07:25.960 --> 0:07:28.360 like you said, it's stopping you from being able to, 0:07:29.080 --> 0:07:32.120 you know, make investing and saving decisions that could really 0:07:32.120 --> 0:07:36.440 build help build you wealth in the future. I'm fearful 0:07:36.680 --> 0:07:39.360 that if you don't start tackling this sixty thousand dollars 0:07:39.360 --> 0:07:41.640 worth of debt, that it will get to the point 0:07:41.640 --> 0:07:44.560 where you kind of reach your balance transfer cliff. I mean, 0:07:44.600 --> 0:07:47.200 there are some you know, balance transfers are not a 0:07:47.200 --> 0:07:50.120 total panacea for credit card debt, right, So there's a 0:07:50.120 --> 0:07:54.680 couple of limitations. One, you typically cannot transfer a balance 0:07:54.720 --> 0:07:57.320 from a credit card at a certain bank to the 0:07:57.360 --> 0:08:00.640 same bank. So that means if you've got ten dollars 0:08:00.720 --> 0:08:03.360 on a Chase credit card, even if Chase has a 0:08:03.440 --> 0:08:07.200 zero percent balance transfer offer, you can't transfer that balance 0:08:07.240 --> 0:08:09.600 onto a Chase credit card. You have to go to 0:08:09.760 --> 0:08:12.920 another issue or bank and find a zero percent balance 0:08:12.960 --> 0:08:16.480 transfer offer from them. There also may be limitations on 0:08:16.520 --> 0:08:19.600 how often you can transfer balances, you know, at one 0:08:19.600 --> 0:08:22.120 bank to the other. So definitely want to read that 0:08:22.240 --> 0:08:26.600 fine print. You've put a bunch of money into the market, 0:08:26.680 --> 0:08:28.680 and I get what you're saying. You know, you don't 0:08:28.680 --> 0:08:30.760 want to take it out. You don't want to lose 0:08:30.800 --> 0:08:32.800 and miss out on those gains. And I think that 0:08:32.800 --> 0:08:35.240 that is, you know, it makes a lot of sense. 0:08:35.880 --> 0:08:38.120 But the fact that you were able to invest in 0:08:38.160 --> 0:08:40.720 the market tells me that you've got extra money and 0:08:40.800 --> 0:08:43.080 extra funds that you could be using to pay down 0:08:43.160 --> 0:08:45.440 this credit card debt. So I would think a little 0:08:45.480 --> 0:08:48.120 bit differently about how much money you're putting toward your 0:08:48.120 --> 0:08:51.080 investments and instead start siphoning some of that money to 0:08:51.200 --> 0:08:54.040 your credit card debt. That's sixty K. Like I said, 0:08:54.080 --> 0:08:57.400 you're managing it right now, but it's like spinning plates, 0:08:57.679 --> 0:09:01.080 and you keep not only spinning plates, but you're like 0:09:01.160 --> 0:09:03.160 doing it on your tippy toes. And then you're going 0:09:03.200 --> 0:09:05.200 to try to like lift one foot off the floor 0:09:05.280 --> 0:09:07.600 and you're just making it. It's getting harder and harder. 0:09:07.880 --> 0:09:09.400 Then you're going to be like, oh, I can do it, 0:09:09.400 --> 0:09:12.280 but I can put one hand behind my back. Eventually 0:09:12.480 --> 0:09:15.000 it's all going to come crashing down. So that's why 0:09:15.000 --> 0:09:16.560 I want you to come up with a plan that 0:09:16.640 --> 0:09:20.640 lets you put additional funds toward that debt. Now I 0:09:20.760 --> 0:09:23.240 know that this is brown ambition, and we talk about 0:09:23.240 --> 0:09:26.520 the importance of investing and wealth building. Sure, but I 0:09:26.559 --> 0:09:29.720 don't want you to lose sight of that credit card debt, 0:09:29.880 --> 0:09:32.640 because honestly, paying down debt can also be a form 0:09:32.679 --> 0:09:35.400 of investing, especially if that debt is going to be 0:09:35.440 --> 0:09:38.040 costing you or has the potential to be costing you 0:09:38.080 --> 0:09:40.640 down the line. So maybe what you could be doing 0:09:40.760 --> 0:09:43.880 while you're enjoying the remaining terms of your zero percent 0:09:43.960 --> 0:09:47.480 balance transfer options that you've got is to start creating 0:09:47.559 --> 0:09:49.640 a bit of a cash nest eck that you can 0:09:49.760 --> 0:09:52.960 use to start paying down those credit cards sooner rather 0:09:53.000 --> 0:09:55.360 than later. And maybe whatever you've put into the stock 0:09:55.400 --> 0:09:57.679 market so far, you kind of let that sit, and 0:09:57.720 --> 0:10:00.559 you say, cool, I put this wind far into the 0:10:00.600 --> 0:10:02.679 stock market. I'm going to let that rock and I'm 0:10:02.720 --> 0:10:04.640 not going to touch it. That's fine, but you've got 0:10:04.640 --> 0:10:08.960 to throw everything you've got left at these credit cards. Now. 0:10:09.000 --> 0:10:12.559 You talk about zero percent balance transfers also not always 0:10:12.600 --> 0:10:15.559 coming around every day of the week. While it's true, 0:10:15.760 --> 0:10:18.480 especially if banks know, and they always have a way 0:10:18.480 --> 0:10:20.960 of knowing, don't they. If you're someone who's likely to 0:10:20.960 --> 0:10:23.880 take advantage of balance transfer offers, I imagine you get 0:10:23.880 --> 0:10:26.080 a lot of those offers in your email or in 0:10:26.120 --> 0:10:29.240 your old snail mail through the mailbox. That being said, 0:10:29.440 --> 0:10:31.480 you don't always have to wait for an offer to 0:10:31.520 --> 0:10:34.719 come across your you know, your inbox in order to 0:10:34.760 --> 0:10:37.719 take advantage. You can actually use sites like nerd. While 0:10:37.760 --> 0:10:40.360 at Magnify money, just do a quick Google search to 0:10:40.400 --> 0:10:43.240 see what banks out there are offering zero percent balance 0:10:43.280 --> 0:10:46.560 transfer cards right now, and you can take advantage of those, 0:10:46.600 --> 0:10:50.000 you know, if you qualify. I'm actually really impressed that 0:10:50.120 --> 0:10:52.400 you say you've managed to maintain such a high credit 0:10:52.440 --> 0:10:55.520 score even though you're maintaining pretty high balances. And that's 0:10:55.520 --> 0:10:58.040 probably due to the fact that, like you said, you 0:10:58.120 --> 0:11:01.160 haven't been missing payments because you've been set enough to 0:11:01.280 --> 0:11:04.640 take all those spinning plates and move them around strategically 0:11:04.720 --> 0:11:09.360 to different, various zero percent balance transfer options. That's super savvy. 0:11:09.520 --> 0:11:12.280 But how long can you keep that up? Sure, if 0:11:12.320 --> 0:11:15.720 you see a zero percent balance transfer offer and it's 0:11:15.760 --> 0:11:18.120 going to give you and buy you more time, and 0:11:18.160 --> 0:11:20.840 it's a smart way to you know, offload some of 0:11:20.880 --> 0:11:23.679 that debt and save you what interest, even though you are, 0:11:23.840 --> 0:11:27.360 like you said, paying a balance transfer fee. Okay, fine, 0:11:27.640 --> 0:11:30.400 but what are you really going to be doing in 0:11:30.480 --> 0:11:33.559 the long term? Like, what's the long term strategy. I 0:11:33.600 --> 0:11:36.120 am so excited and I'm hopeful too that you'll find 0:11:36.120 --> 0:11:38.240 a job that's going to increase your income to help 0:11:38.280 --> 0:11:40.800 you pay down that debt. I really hope that happens. 0:11:40.960 --> 0:11:43.160 But if it doesn't, or let's say you even do 0:11:43.280 --> 0:11:45.520 get that job, but you're not able to put as 0:11:45.559 --> 0:11:47.480 much as you want toward your debt, what are the 0:11:47.559 --> 0:11:49.760 sources of income can you be bringing in? You know, 0:11:49.800 --> 0:11:52.000 are there any ways that you can be freelancing or 0:11:52.000 --> 0:11:55.680 bringing an additional income to help tackle that debt? And 0:11:55.760 --> 0:11:58.320 if a balance transfer doesn't sound like something that you 0:11:58.320 --> 0:12:01.120 can keep up for much longer, you could consider taking 0:12:01.120 --> 0:12:03.599 on a debt consolidation loan at a credit union or 0:12:03.600 --> 0:12:07.480 an online lender. Yes, it's not the juicy zero percent 0:12:07.600 --> 0:12:10.480 interest offer that you may get from credit cards, but 0:12:10.720 --> 0:12:12.760 it gives you more peace of mind because it's a 0:12:12.800 --> 0:12:15.439 fixed interest rate loan, meaning it's not going to go up. 0:12:15.880 --> 0:12:19.520 You mentioned the FED has been raising rates to combat inflation, 0:12:19.679 --> 0:12:22.000 which it does. That's the whole point of the FED, 0:12:22.520 --> 0:12:25.080 which means that credit card debt and other types of 0:12:25.120 --> 0:12:27.720 loans can get more expensive, So it can be nice 0:12:27.760 --> 0:12:30.360 to lock in a fixed interest rate through a debt 0:12:30.400 --> 0:12:33.960 consolidation loan like a personal loan through a credit union 0:12:34.080 --> 0:12:36.080 or a lender, because at least then you know this 0:12:36.200 --> 0:12:38.200 rate is my rate. No matter what the FED does, 0:12:38.559 --> 0:12:41.559 I'm going to get this juicy, great rate. And because 0:12:41.559 --> 0:12:44.080 you've got decent credit, you know your chances of getting 0:12:44.200 --> 0:12:46.360 one of the lower rates is fairly high. I mean, 0:12:46.400 --> 0:12:48.440 obviously I don't know all of your information, but let's 0:12:48.480 --> 0:12:51.840 just assume it is. So look into that fixed rate, 0:12:52.320 --> 0:12:55.840 fixed term personal loan. And by fixed term, I mean 0:12:56.320 --> 0:12:58.600 they're going to give you a loan and say you're 0:12:58.640 --> 0:13:01.160 going to owe this this your monthly payment for the 0:13:01.200 --> 0:13:04.080 next five to seven years or whatever the term of 0:13:04.080 --> 0:13:06.320 your loan is. And then you always know what your 0:13:06.360 --> 0:13:08.400 monthly payment is going to be. And because it's a 0:13:08.440 --> 0:13:10.200 fixed rate loan, you know the rate is not going 0:13:10.280 --> 0:13:13.640 to change. So as much as balance transfer cards are 0:13:13.679 --> 0:13:16.560 a good option, they are a band aid, and I 0:13:16.600 --> 0:13:19.680 think a long term debt payoff solution like a debt 0:13:19.720 --> 0:13:25.520 consolidation loan can make some sense. But because balance transfers 0:13:25.520 --> 0:13:28.480 are so good and you got your zero percent offer, hey, 0:13:28.720 --> 0:13:31.520 you've already proven that you can multitask like no other 0:13:31.679 --> 0:13:34.480 like women are freaking amazing at multitasking. I just know 0:13:34.840 --> 0:13:36.600 there's a lot of men out there who probably couldn't 0:13:37.720 --> 0:13:39.559 not to it. I know men are not a monolith, 0:13:39.960 --> 0:13:42.400 but to manage all those different cards and all those 0:13:42.440 --> 0:13:45.360 different term limits and balance transfer offers like that is 0:13:45.480 --> 0:13:47.880 no small feat. So you know, I commend you for that, 0:13:48.280 --> 0:13:49.840 and I say, as long as you can keep it 0:13:49.880 --> 0:13:52.880 going and you're not, you know, losing sleep and your 0:13:53.080 --> 0:13:55.440 eyes are not spinning out of your head, you know, 0:13:55.559 --> 0:13:58.640 continue taking advantage of those zero percent balance transfer offers. 0:13:58.679 --> 0:14:01.079 As long as you can get them, you can qualify them. 0:14:01.120 --> 0:14:03.640 But when it starts to look like you're gonna need 0:14:03.640 --> 0:14:05.800 a way to help pay off some of this debt 0:14:05.840 --> 0:14:08.800 beyond balance transfers, you know, consider a debt consolidation loan. 0:14:09.160 --> 0:14:12.280 Consider starting a relationship with a credit union that will 0:14:12.280 --> 0:14:14.439 also help improve your credit. I know you said your 0:14:14.440 --> 0:14:18.120 credit's pretty decent, but with your high utilization rates on 0:14:18.200 --> 0:14:20.640 credit cards, you know, that's a double whammy for your 0:14:20.680 --> 0:14:24.520 credit score. Not only is a high utilization gonna diminish 0:14:24.520 --> 0:14:27.200 your credit score because it's like the second biggest factor 0:14:27.240 --> 0:14:30.160 of your credit score, that high utilization rate, but it's 0:14:30.200 --> 0:14:32.040 the types of debt that you have too. It's the 0:14:32.120 --> 0:14:35.400 revolving credit card debt, and credit scoring models tend to 0:14:35.440 --> 0:14:38.720 favor installment loans, which like a debt consolidation loan, that's 0:14:38.720 --> 0:14:42.960 an installment loan versus high interests revolving credit cards. So 0:14:43.320 --> 0:14:45.640 something to think about as well for the long term. 0:14:46.000 --> 0:14:47.960 But in the meantime, you're kind of a I'm gonna 0:14:48.040 --> 0:14:52.000 change your name from balance Transfer Bell to balance transfer Badass. Okay, 0:14:52.560 --> 0:14:55.200 thank you so much for sharing your question. That was 0:14:55.240 --> 0:14:57.760 a juicy one. Let me take a quick break. I 0:14:57.800 --> 0:15:02.840 will be right back with more of your question. Hey, hey, 0:15:02.920 --> 0:15:05.440 all right, I am back with another credit score question. 0:15:05.600 --> 0:15:08.520 I love them. Keep them coming, y'all. Brandimissionpodcast dot com 0:15:08.800 --> 0:15:12.720 send us all of your questions. Another listener who'd like 0:15:12.760 --> 0:15:17.920 to remain anonymous, I'm gonna call her. We had balance 0:15:17.960 --> 0:15:21.640 Transfer Bell slash balance Transfer Badass, so I'm gonna call 0:15:21.680 --> 0:15:25.320 her Credit Queen, Credit Queen. Hello, thank you for your question. 0:15:25.920 --> 0:15:29.040 Credit Queen says, I am paying down my debt and 0:15:29.120 --> 0:15:32.560 I've paid down twenty thousand dollars with high interest credit 0:15:32.560 --> 0:15:36.160 card debt. Woho, that is amazing. I'm about to tackle 0:15:36.200 --> 0:15:39.880 the highest balance I have yet, thirty four thousand dollars 0:15:39.920 --> 0:15:42.560 on a credit card with a thirty eight thousand dollars 0:15:42.560 --> 0:15:48.000 credit limit. Yikes. Overall, my credit utilization rate is sixty 0:15:48.040 --> 0:15:51.800 percent with all the other open credit lines that I have. Again, 0:15:52.000 --> 0:15:54.720 all the other credit cards are down to zero. This 0:15:54.760 --> 0:15:56.800 is the last one I have left, thirty four K 0:15:56.960 --> 0:15:59.920 on a thirty eight K credit limit card. My question 0:16:00.240 --> 0:16:03.320 is should I close down this very high balance card 0:16:03.520 --> 0:16:06.320 and with a high credit livet. I've already cut up 0:16:06.360 --> 0:16:08.840 the card. I'm working on my money habits and my 0:16:08.960 --> 0:16:12.200 plan so that I'm no longer putting expenses on credit. 0:16:12.720 --> 0:16:15.520 But with closing the card, affect my credit or make 0:16:15.560 --> 0:16:18.880 it better since my credit utilization will technically be better, 0:16:19.400 --> 0:16:21.720 I'm paying off this card. I've never been laid on 0:16:21.720 --> 0:16:24.560 the payments. Also, I think I want to look into 0:16:24.600 --> 0:16:26.840 taking a personal loan to pay it off with a 0:16:26.880 --> 0:16:29.840 better interest rate and then close the card. Thanks for 0:16:29.880 --> 0:16:33.520 your help, ooh, this is a perfect combo question to 0:16:33.560 --> 0:16:35.960 go along with our question in the first half of 0:16:36.000 --> 0:16:39.840 the show. First and foremost, congratulations, paying down twenty thousand 0:16:39.920 --> 0:16:42.280 dollars of high interest credit card debt is no small 0:16:42.280 --> 0:16:45.200 feed so I am giving you all the snaps, my friend, 0:16:45.800 --> 0:16:48.200 all right, quit credit queen. So you got thirty four 0:16:48.280 --> 0:16:50.720 K and a thirty eight K credit card. The fact 0:16:50.760 --> 0:16:53.000 that you know enough to understand how to calculate your 0:16:53.040 --> 0:16:55.880 credit utilization rate tells me I am not dealing with 0:16:55.920 --> 0:16:58.320 a newbie here. You actually know something about how credit 0:16:58.320 --> 0:17:02.600 scores are determined and how power they can be. So absolutely, 0:17:02.800 --> 0:17:06.359 having such a high balance on this credit card could 0:17:06.440 --> 0:17:09.280 really be hurting your credit score. I mean, you have 0:17:09.440 --> 0:17:12.800 almost one hundred percent balance used on one credit card, 0:17:13.200 --> 0:17:16.399 but you have saved yourself from having terrible credit, it 0:17:16.440 --> 0:17:20.560 looks like, by having additional lines of credit. So the benefit, 0:17:20.600 --> 0:17:23.439 while we're seeing here from this your own example, is 0:17:23.440 --> 0:17:26.560 the benefit of keeping credit cards open, because if you 0:17:26.600 --> 0:17:29.040 had closed down those other credit cards as you pay 0:17:29.119 --> 0:17:31.280 them off, then you'd be left with like a ninety 0:17:31.359 --> 0:17:34.200 nine percent utilization rate right now, and your credit score 0:17:34.240 --> 0:17:38.440 would totally tank, because that is the second most important 0:17:38.600 --> 0:17:42.639 scoring factor apart from making on time payments, which is 0:17:42.640 --> 0:17:44.200 great to hear that you've been doing that as well, 0:17:44.240 --> 0:17:47.600 but utilization rate is the second biggest reason, or second 0:17:47.640 --> 0:17:50.840 biggest factor in determining your credit score. Now because of 0:17:50.880 --> 0:17:53.720 those other lines of credit. Like you said, that thirty 0:17:53.720 --> 0:17:56.960 four k is actually only sixty percent of your total 0:17:57.000 --> 0:18:00.320 credit limit across all your credit cards, which is really 0:18:00.359 --> 0:18:03.640 savvy to understand. That's because credit scoring models, when they 0:18:03.640 --> 0:18:06.760 determine utilization rate, they're not just looking at the utilization 0:18:06.880 --> 0:18:10.080 rate per individual card, but they're adding up the total 0:18:10.160 --> 0:18:13.320 available limit across all your credit cards and then adding 0:18:13.440 --> 0:18:16.320 up the total balance across all your cards, and that's 0:18:16.320 --> 0:18:19.840 how they're getting to utilization rate. Okay, so you've already 0:18:19.840 --> 0:18:22.600 proven by your own example the power and the positive 0:18:22.640 --> 0:18:25.920 side of keeping credit cards open. What will happen if 0:18:25.920 --> 0:18:28.040 you were to pay off this thirty four k and 0:18:28.119 --> 0:18:30.600 then cut up that and get rid of and close 0:18:31.160 --> 0:18:33.760 that thirty eight thousand dollars line of credit is that 0:18:33.840 --> 0:18:36.120 it could make it more difficult for you to maintain 0:18:36.160 --> 0:18:39.199 a low utilization rate in the future, right, so you 0:18:39.280 --> 0:18:42.560 won't have that quote unquote. It's hard to call a 0:18:42.600 --> 0:18:45.560 big fat credit limit a safety net because really it's 0:18:45.600 --> 0:18:49.040 almost like it's like, I don't know, it's like putting 0:18:49.040 --> 0:18:51.639 a for me as a as a person who struggles 0:18:51.640 --> 0:18:55.760 with like eating and eating, you know, binge eating Sometimes 0:18:55.840 --> 0:18:58.240 like It's like putting a big bag of potato chips 0:18:58.320 --> 0:19:01.000 next to me after a long day of work and 0:19:01.119 --> 0:19:03.960 kind of expecting me to not devour the entire thing 0:19:04.040 --> 0:19:08.080 in five minutes. Right, So it's a tempting line of credit. 0:19:08.400 --> 0:19:11.520 It's like, oh, use me, I'm here. You can't afford it, Oh, 0:19:11.680 --> 0:19:13.880 just put it on this thirty eight thousand dollars credit limit. 0:19:14.000 --> 0:19:16.879 It's just it's thirty eight thousand dollars. What's a couple 0:19:16.920 --> 0:19:20.720 thousand dollars? You know, So it's tempting you. But what's 0:19:20.760 --> 0:19:22.919 crucial to me that you've said in your question is 0:19:22.920 --> 0:19:26.080 that you're actually working on your money mindset and building 0:19:26.080 --> 0:19:28.679 smarter habits so that you won't put things on credit 0:19:29.240 --> 0:19:32.320 if you trust yourself, and only you can answer this, Okay, 0:19:32.320 --> 0:19:35.600 credit queen, Only you can decide if you trust yourself 0:19:35.720 --> 0:19:38.800 enough to keep that credit line open because you know 0:19:38.960 --> 0:19:41.600 it'll help you with the utilization rate, and you know 0:19:41.720 --> 0:19:44.439 that you know you'd like to have a longer credit 0:19:44.520 --> 0:19:47.639 history because the length and age of your credit is 0:19:47.680 --> 0:19:51.720 also a small but powerful factor in your overall credit score. 0:19:52.119 --> 0:19:53.760 And you know that, and you're like, I'm going to 0:19:53.840 --> 0:19:56.320 keep this open because it's actually benefiting me to have 0:19:56.400 --> 0:20:00.359 it open. However, you know yourself very well, well, you 0:20:00.440 --> 0:20:02.199 know how you racked up all this credit debt in 0:20:02.240 --> 0:20:04.199 the first place. I know you say you're, you know, 0:20:04.240 --> 0:20:07.760 putting some new mindsets in place and trying to you know, 0:20:07.800 --> 0:20:10.480