Category — debt is evil

Back in April I discussed being bumblefucked by Orchard Bank and their sneaky payment holding tactics. Well, it is with great pleasure that I can now tell Orchard Bank that our relationship is over!

Woo hoo.

Of course, if you remember my previous post then you know that they also raised my credit limit. Wankers.

So, Orchard Bank, I won’t fall for it. We had a long relationship. I thought we had a good thing for a while there. But then I realized that you were just using me. And we are so over.

We have a lot of student loan debt. If you look at the sidebar you will see that I am not joking. While there are a few private student loans in that mix, the majority of the loans are the super low interest rate ones. Currently the highest rate on the private loans is 8.00%. And our lowest student loan rate is 2.65%.

I was doing some thinking recently about all of these student loans and their interest rates. And then I was thinking about how you can get 8% or better return on some mutual funds. With that in mind, it seems to me that any extra money that could be applied to paying down student loan debt would be better served in a mutual fund with a good track record. I would think that as long as you are earning more than the interest rate on the student loans that you are coming out ahead of the game.

Is my logic flawed on this? I mean, sure, you could have a bad year with the mutual funds and not only make less than the 8% but even lose money. But still….it seems logical to me.

Riley has a Capital One account that had a balance on it only because it was at a promotional 5.99%. It was a balance transfer that we did a while back. We had just been paying the minimum on it as the interest rate was so low and we wanted to focus our efforts on the higher interest rate cards.

On the most recent statement I noticed a $39 membership fee. Clearly we do not want to be paying any of those! According to the statement, the only way out of the fee was to cancel the card and pay off the balance. So, even though I wanted the money to go towards a higher interest card, I did not want to pay the $39 and called to cancel the card today.

Mario at Capital One tried to convince me that $39 was a small price to pay for keeping the card history on my credit report. While I do agree that I hated having to cancel the card and the effect it will have on the credit score, it is not worth paying Capital One $39 for nothing. And I hate that we have clearly done so in the past and not realized it. If this was a rewards card that we used a lot, it might be worth it!

I managed to convince Mario that I still wanted to cancel the card. That is when I learned about Capital One’s “closing status” and their “closed account status.” See, apparently when you call to cancel your credit card with Capital One it is not closed for 30 days.

According to Mario, Capital One places your credit card account in “closing status” when you call to close the account. The account remains in this “closing status” for 30 days or until the balance reaches zero, whichever is longer.

While your account is in the “closing status” charges can still go through to it. So, if a charge is made against the account, the account automatically re-opens. That means if you had canceled to avoid a membership fee like me, you are automatically charged the membership when the account re-opens and you cannot get out of it at that point.

So, if you are closing a Capital One account – make sure that you do not have any recurring charges set up for the account, or you just might end up with an open account and all those extra fees after all.

image from Guru Jeff’s page of truth

In the quest to un-bumblefuck ourselves we have been trying to pay off credit cards. On March 31st I made a $400 payment to an Orchard Bank credit card. The limit of said evil card is $1950. The evil interest rate is somewhere around 21%. The balance at the time was $999 and some change.

Today, I sign on to check the account and notice that the available balance is not correct. For a moment, I panic thinking that someone has bumblefucked us further with identity theft.

So, I go to “pending charges” and see a $399 pending charge from HCS. I’m like ‘wtf?’ I click on that. HCS = Household Card Services, aka evil Orchard Bank. It is a freaking payment hold! And why?!?

My theory – they are trying to keep the average daily balance up so that they finance charge will be higher.

Wankers.

And that is reason #3,412 that credit cards are evil.