Farewell my ‘trusty’ store branded credit card
Now that Valentine’s Day is behind us, we finally get a much needed break from the holidays. For me, this means it’s time to spend less and get my finances in order. I’ll be honest – budgeting and financial planning aren’t the most exciting things I like to do with my time. But, I’ve found that even the smallest changes make a huge impact. So in an effort fatten up my piggy bank, I’m focusing on spending less and saving more.
The first item I tackled was my credit card debt. Since I’m not immune to an effective sales pitch, I fell victim to the classic store credit card savings deal. My weakness was “The Limited”. What can I say; I ‘needed’ to update my work wardrobe and had to start buying Christmas gifts for my family and friends. I felt like signing up for the new card would allow me to do both, worry free! However, it quickly became evident I was living WAY outside my means.
Like many store branded cards, the interest rate was astronomical—24.99% APR!—which made things even worse! When the first bill came I nearly blacked out. Making the minimum payment, I would spend a whopping $373 in interest alone and be plagued with 2 years of payments. Think of all the clothes I could’ve bought with the interest payment alone!
I knew I had to get rid of my Limited card payment and started looking for a magical ‘make my payment disappear’ solution—the infamous balance transfer. Since I already have Apple’s Visa Platinum Credit Card, I checked there first. I realized that because I have decent credit I pay just 5.74% APR* (a rate that’s way better than The Limited store card). So, I checked out Apple’s balance transfer options and it turns out that balance transfers are super easy. And the best part…I completed my transfer during Apple’s 0% APR balance transfer** promotion. Basically as long as I transferred a balance to a new or existing Apple Visa Platinum or Platinum Rewards Credit Card by April 30th, I’ll pay 0% interest for SIX MONTHS. I just have to make sure I pay off my Balance Transfer amount within those 6 months, otherwise I’ll be paying the interest I avoided during the promotion.
Now, I no longer have a crazy high-interest store card AND I’m saving even more by paying off my Apple card with NO interest. This means the only extra fee I’ll have to pay is Apple’s 3% balance transfer fee, after that the amount I see on my bill is the true cost of the items I purchased.
Doing a balance transfer might not be the best solution for everyone, but for my situation it was the right choice to make. If you find yourself swimming in high-rate credit card debt, I suggest you do a little research to determine what’s best for you. If you think it’s Apple’s 0% balance transfer, check it out HERE.
It’s still hard to believe this small, simple move made such a huge difference and immediately allowed me to save more. Hopefully this will help get your wheels churning and give you some ideas on how to take control of your finances too. I’ll continue to shop at The Limited (I love their clothes,) but I’ll be sure to learn more about interest rates and my credit score before signing up for another store branded credit card. (Stay tuned for a follow up post on how store cards affect your credit score).
Have a great day!
Now for all the fun disclosure stuff*APR = Annual Percentage Rate. Rates are based on an evaluation of applicant credit. Your actual APR will be disclosed at the time of credit approval. Not all applicants will qualify for the lowest rate. VISA Credit Card rates apply to cash advances, balance transfers, and outstanding balances on purchases.**APR = Annual Percentage Rate as of 02/01/12 only available on transfers to a variable rate Visa® Platinum or Platinum Rewards credit card balance transfer. The 0% balance transfer APR offer is available 02/01/12 – 04/30/12 on balance transfers only. A 3% balance transfer fee (not to exceed $300 per balance transfer) during the promotional period applies. Balance transfer rates adjust to a variable APR (5.74%–18.00%) after the promotion period based on an evaluation of applicant credit — not all applicants will qualify for the lowest rate. The 0% APR will apply for six (6) months for every balance transfer completed within the promotional period from the first qualifying balance transfer. New and existing Apple Cardholders are eligible for the special 0% balance transfer rate and the APR for purchases and cash advances will be disclosed at the time of credit approval.