Love the Zero

Financing of major purchases at zero percent interest can save a bundle. At this time of year, there are so many offers to transfer balances, which can be a blessing. But you have to understand the game and know what you’re doing.

In November I received such an offer in one of my credit card statements. “When you transfer a credit card balance to OUR card, we’ll give you 12 months financing (with a small cash advance fee) at 0%. After that, we’ll gouge you, but it’s still a sweet deal.” I kept it. You never know.

An expensive Christmas gift was purchased in our household this year, components bought online, built by dad and son together. It was more expensive than I would have liked, but still a good deal, and a nice gift. That was supposed to be sweeter with a zero percent interest for 10 months deal, if DH got their credit card. We drank the KoolAid and signed up. But the online company broke out all the components into separate purchases, so that only two of the parts qualified for the special financing. Really? I thought I would pay it off in two or three interest-free payments, but that wasn’t going to happen now, especially with the unexpected medical bill situation. And making minimum payments at 20% APR also wasn’t going to happen.

Wait, I had that 0% balance transfer deal!  After reading everything 10 times, and knowing for certain what I was getting into, I waited for the first bill for the new online company account, and used the balance transfer check to pay it off in full. HA! Take that, you snakes! Everything posted as of this morning, and now we’re hitting your account out of the park.

Let me state emphatically that this does not adversely affect our credit rating (I checked this morning). We’re way above 800, and pay off our consumer cards in full each month (purchases are budgeted to begin with). So we’re not concerned with the credit rating, especially since we’ll be closing out the account. The consumer credit card now hosting the transfer balance, had a zero balance. I will not be using it for anything else over the duration of this process. I might even get rewards points for the balance transfer, but that wasn’t very clear, and would be a surprise bonus.

The balance transfer fee was minimal. We’ll be dividing the starting balance by 10 and paying much more than the minimum. Normally this would seem to be a shell game to me, and I would avoid this kind of thing. But given the shady practices surrounding the online company here, I’m happy to relieve them of their debt service!  And any further encumbrances of our doing business with them.

For us, this means that while I paid off early the zero interest account for the emergency washing machine purchase this month, next month we have the same amount I was paying due to this new debt. Lovely. Life goes on, though, and knowing how to play the game puts us closer to enjoying each inning. Still looking for that financial home run.



The Higher The Debt, The Tighter The Budget

I said our budgets for the next few months were not squeaky-tight. I said our debt was minimal and manageable. Well. As if the sub-zero temperatures here weren’t bad enough, we recently got a smack in the face.

Very wrong information was provided, which was to have been verified before certain “routine screening” medical tests were done in December. Guess what? They weren’t, and now we owe more than $2,000 for tests and services (which were only done because they were supposed to be covered as “preventive”). Yes, there is a huge backstory, but this is me showing restraint and not finger pointing. Lesson here: Verify, Verify, Verify insurance coverage beforehand!

Also, we have a high mileage, original-to-us-and-paid-off-years-ago, third vehicle for #2. In December work was done to it that was not really necessary, that caused escalation of an issue that could no longer be ignored. I had to track down and purchase an expensive part online, but, fortunately, the replacement labor was no cost. That problem caused the starter to go out. Do you see the snowball? About $1,000 went into the vehicle toward the end of the year.

Sudden high debt = sudden squeaky-tight budget. And by squeaky-tight, I mean Bare Bones. I pared and pared, and found $900 to throw at the medical debt this month, which doesn’t cover it. More budgetary manipulation, and I can pay close to that again the next month. The remainder can be paid in March. I’m not sure how the providers’ offices are going to like that, but that’s what it has to be.

Since our savings for March property taxes needs to bump up, I am definitely putting the balance that will be due into that, so that at least I will not have to worry about it in two months.

A squeaky-tight budget means absolutely no excess spending. It’s just the first week of the month, but our entertainment budget is done. Oil change is postponed until the debt is paid. Groceries will only be purchased if needed, which means I have to avoid sale ads and my regular replenishing of freezers and pantries. If it’s not milk, vegs, or TP, it might have to wait. All extra pennies will get thrown at the medical bills, then the other debts. We will not be living off credit cards!

Fortunately, a big chunk of the vehicle repairs are on an account with 0% interest for a time, so only minimum payments will be made until we have more room to tackle that. My vehicle note will not be paid off early as I’d hoped, but still in March. We desperately need new linens for the guest room (family guest for graduation in May), so I planned to take advantage of the incredible January white sales, but that won’t happen.

This is real, and there will be serious pinch felt. I’m now rethinking all the plans for the spring and summer. Stay tuned.