I just wiped out most of my gains from the past 10 months of 0% balance transfer abritrage!

In the process of updating my excel spreadsheets for May I was checking my email and noticed that I had received an email from Bank of America letting me know my next statement was due.

I didn’t think anything of it except that I noticed that the minimal payment had jumped from $320 to over $800. Not a good sign! I quickly logged on and pulled up the most recent statement and confirmed that they had bumped my balance transfer rate from 0% to 19.99%. OWCH!.

I keep good records and I was sure that I had not initiated these transfers until July 2007 which I quickly confirmed. When I went back and read the details of the offer it was clearly stated that the offer ended in May 2008.

Apparently I should read some of my old posts more often. If you read the last line of this post, it is pretty clear that I knew that the balance transfer expired in May.

A phone call to customer service was to no avail.

For those that are keep track at home, the 2 results of my balance transfer arbitrage:

About $500 in interest

A much lower credit score!

I guess there is some truth to the rumors of doctors being bad with their money!

Our impending move at the end of June(as I transition from being a Resident to a Fellow) has caused my wife to drop to part time at work rather than having to find and pay for childcare for a few months.

While this has been great for our family, it has slowly become a challenge for our finances. We have gone from a household living off of a six figure income with minimal expenses to one having to live on roughly half that income with slightly higher expenses.

We have gone from striving to get ahead to striving to get by.

The mental difference between the two is dramatic with every financial decision now being well thought out. It helps me appreciate the struggles that many families face trying to get ahead when it seems that they are doing everything they can to get by.

It has been important to remember that the drop in income does not fundamentally change what we are trying to accomplish financially.

It instead helps us focus on making sure we are on doing the little things better so our big picture remains bright.

The common response in this situation is to focus on limiting your expenses. This is something that we have been slowly working on for the past 2 years and is slowly reaching a plateau as we have eliminated all of our easily eliminatable expenses.

It is equally important for us to do what we can to maximize our income beyond working more hours because this is no longer possible.

When we were getting ahead, I was focused on maximizing our monthly gains and the best way to increase our savings. Now that we are just getting by, small changes in fees/percentages/expenses are the only variables that we have control over.

Example: We have been relatively complacent watching interest rates fall on our cash equivalent savings. As I write our Emigrant Direct accounts are earning only 2.75% APY. After a quick look over at Bankrate.com, I found multple other less popular(for a reason) banks offering much better rates(up to 4.05%).

That is an additional $1,500/year gain just for taking a few minutes to open a different online savings account.

Another Example: Our health plan has long had a heath survey to take with a financial reward for reaching certain health milestones. This week I finally filled out the survey(it took digging up some old medical records) and now have a $30 gift card to Amazon.

These are little things that brought in a little more money for our household. 2008 looks like it will be a year that the little things will make a big difference.

Even if we are just getting by, that means we are still getting ahead.

Even when I was at my personal finance low 2 years ago with over $14,000 in hard earned credit card debt, I never thought I would let my debt get to such levels.

The difference is that this $45,000 is now earning me about $180/month in pre-tax interest. After standing on the sidelines waiting for a good opportunity, Bank of America was very kind to me in July and sent me a 0% balance transfer offer. I quickly turned this offer into a $19,500 balance transfer.

That balance transfer wet my appetite for other convenient balance transfer offers. After reading a couple of other blogs I found a way for me to do this without applying for a large number of new credit cards:

• I first asked to have my credit limit increased on my other old BoA credit cards.
• I then had the credit limits from these two cards transfered over to the credit card with the 0% balance transfer offer.
• I then used this increased line of credit on my 0% BoA card and transfered this to my online savings account.

I now have just over $45,000 in credit card debt earing me cash for the next year. I think this is as far as I am willing to go unless another great offer falls in my lap. So far this has been a low effort, high reward way for me to earn a couple extra dollars each month.

After spending the past 2+ years aggressively paying down my credit card debt I have managed to eliminate the balances on all of my credit cards except one. Instead of closing my old accounts I selectively kept them open to help Improve my credit score.

These were cards that:

1. I have had for at least 5 years – They add history to my credit report
2. Have high credit limits – They keep my credit utilization ratio low

After watching many other bloggers and their success with this technique I was waiting for a opportunity to start with a minimal effect on my credit score.

Bank of America was the first to step up offering 0% on Access checks and balance transfers till May 2008 with a $75 balance transfer fee. Interestingly this was only offered on 1 of my 3 Bank of America credit cards. The other two were still offering 1.99% on balance transfers.

It couldn’t have been any easier. Now until May 2008 I just need to be vigilant about paying my bills on time and making sure I don’t get any universal default charges.

I have a couple of Citi card that I used to take advantage of their 0% balance transfers. I haven’t touched them in a while but it looks like they are trying to get credit card holders to also open up deposit accounts(checking and savings accounts).

Now normally I don’t usually spend the time and effort to take advantage of offers like this because in the end I normally end up losing money because I don’t follow through well enough. This one intrigued me thought because $100 is a fair amount of money. On my current budget that is my cash allowance for the month.

The number of hoops to jump through is quite extensive but again $100 is still $100. Here is the preliminary on what you will need to do.

The fine details are a bit more involved:

• open an e-Savings account which means you must have or need a checking account through them
• the e-Savings account must appear on the same statement as the checking account
• must be a first time deposit account customer(savings or checking)
• must make a single application for both accounts and open both by 03/31/07
• you must fund the account with a minimum deposit of $5,000

There does not appear to be any limit on the amount of time you must keep the $5000 in the account. They only say that the $100 will be credited to your account within 90 days of having met all their requirements.