vakkotaur

Have been pondering a few things as credit offers come in, a loan is soon to be paid off, and savings might be better built up.

As of this moment I have three formal monetary debts: a few dollars on a credit card, a couple payments left on an auto loan, and the mortgage. The first will be paid off in the next week or so, I expect. The second will be paid off in a couple months. The third will be several years.

The mortgage, while a large sum and for several years, is not too much a concern as very few can purchase a house without resorting to debt. Also, rather than mere depreciation there is equity. Not that I won't be celebrating the final payment, but I can deal with the mortgage psychologically perhaps better than other debts. I don't know how some folks can seemingly casually take on huge debts for things, other than a house, and even then I wonder about some.

Once the auto loan is paid off I hope to save the equivalent of the payments and use them to build up a sum that will make the next auto purchase less annoying. Ideally I'd like to not need a loan at all, but I doubt that will be the case. At least I can make a bigger downpayment and get shorter loan for a smaller amount. When I got my current vehicle (a Toyota Corolla) the vehicle I switched from was a ten year old Hyundai Excel. If an Excel can last ten years, I expect a Corolla should do at least as well. This gives me about five years to save up.

How to save it up? Step one is simple enough, I just adjust my direct deposit and transparently put into a savings account each week. But savings account rates suck rocks, you say. Quite right, they do. So a bit of looking around suggest I have three choices at the moment, none ideal.

1. Savings account. Very liquid, no early withdrawal penalty (I've the account for some time), dead simple, but the interest rate is depressingly low.

2. Certificates of Deposit. Less liquid, but not too bad. The rates are only slightly better than the savings account.

3. Savings Bonds. Not very liquid - can be cashed in after six months, but with a three month interest penalty if cashed in after less than five years. For this purpose, there would have to be multiple bonds and therefore the three month penalty would hit several times. It might be better for a longer term, but is the current bond rate something to be locked into for several years?

Nothing looks great, but the CD looks to be the least worst. I get the nasty feeling, though, that I'm overlooking something.

Yes, I do have a couple credit cards, which may shock some people. I managed to get by for years without one. But with online purchases needing them and hotel reservations being so much easier with one, I went and got one. Not the ideal (at ~17%, bleah), but I figured it'd be useful and maybe show the places that send me offers that they can trust me enough to send offers with the better rates. Since then I've gotten another card, at a better rate, though still rather higher than I'm comfortable with.

I've also shredded quite a few offers for higher rate crud. Providian stuff is on my 'shred on sight' list due to insane rates. I almost got another card (not from Providian!), and even applied and got it, but had the account closed before the card was activated. It was a bait and switch, with the good rate played up and the bad in fine print and they send the bad. So I cancel, have them put me on their do not call list and such, and shred the wretched thing.

A few days ago I got an offer from BankOne and it seems good, at first. 6.9% fixed, no fees and that's the real rate, not an intro come-on. But the fine print tells me that fixed can change to variable at their whim and I'm not sure if I even get notified prior to this - or at all? (Jay's experience with a card's rate being jerked up 6% without notice hardly gives me the warm fuzzies, even if it is a different company in his case.) And to make it even better? The very next day I get another offer from BankOne, for the same card, with a 0% into rate and 9.9% rate after intro. Which is it? 6.9% or 0 and 9.9%? Could they at least be self-consistent? is that too much for them? I haven't yet shred either of these. I might just go for the 6.9% and see how long that lasts -- being ready to cancel it should it creep up too far.

As I tend not to have much if any balance on the cards, I have no reason nor much ability to play the card shuffle game of balances transfers to a new card with a low intro rate. What do I want? I want to be able to deal with the odd problem it comes up and not have it be excessively expensive from a lousy rate card. What do I want? I want a company to treat me decent from the start and keep on treating me decent. If one does that, they'll get something the others don't have: customer loyalty.

And yes, I should have thought of some this years ago, I know.

Oh, the radio station on the PA has changed. Still an oldies format, though you might expect rap from the callsign.