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NoSoup · 05-26-2003, 12:48 PM

Popo:

First of all, for anyone else viewing this post, I PMed Popo for more information. I will copy that message here:

Before I respond to your question, I just wanted to get a little more info.

Do you currently have a source of income? Do you have any other credit cards? And, just out of curiosity, what will you be doing?

Also- do you mind if I post your response?

Thanks,
NoSoup
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Thanks for getting back to me.

My only source of income is current student loan and my wife who's a CPA. I have 3 credit cards in total, the other 2 with no balance (15k and 10k limits), plus one BestBuy card almost maxed at 2k but to be paid in full in a month. That's it.

I just applied for a new card that has 0% for 12 months on balance transfers then 8.9% fixed after that. If approved, I will close one card. Or should I close one right now before the application is processed?

I'm a dentist in a specialty program, and no problem with posting this response.

Thanks for the help.
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In response to your first post, I would pay down that Credit Card a little bit, you are currently sitting with a 64.7% balance to limit ratio, It is best to stay under 60%. If you pay it down to 10k, you would be under that 60% mark.

In response to the PM that you sent me, I would close out the Best Buy card. Because Best Buy is considered a retail store, any credit that it lends out is considered higher risk, or "bad" credit on you bureau. Another reason you should close it is because it is currently maxed out. Credit Reporting Agencies keep track of the highest balance that you have ever carried on a card. I know that Best Buy generally encourages the use of their cards by offering 0% interest on your purchase for a set amount of time, but it may be better to spend the couple extra bucks now and have better credit later.

Depending on how much money you have extra each month, you may want to start contributing to an IRA account. I would suggest a Roth IRA, simply because in my opinion it is the best deal out there. I understand that in a few years you will be making quite a large sum of money, but with the Roth, there are fixed contribution limits each year-your income has no impact on how much you are allowed to contribute.

My only other advice is to keep your finances in check. I'd imagine it would be very easy to run up those credit card balances knowing that in a couple of years you will be making such a large sum of money, but it will be worth the wait. When you enter the workforce, I would suggest paying off all of your outstanding balances (on any credit cards or auto loans) before moving into a house or making any drastic changes to your lifestyle. It would probably only take a couple months, and it will be much easier to pay them off with your current lifestyle than the one you adopt later.

Good Luck, and if you have any more questions, let me know.

Thanks for posting!

On a sidenote, popo's post is a great example as to how debt is relative. Speaking for myself, I would be in quite a pickle if I had $400,000.00 dollars worth of school loans, but then again, I am not making a quarter of a million dollars a year. Thanks again, popo.

05-26-2003, 12:48 PM	#12 (permalink)
NoSoup Non-Rookie Location: Green Bay, WI	Popo: First of all, for anyone else viewing this post, I PMed Popo for more information. I will copy that message here: Before I respond to your question, I just wanted to get a little more info. Do you currently have a source of income? Do you have any other credit cards? And, just out of curiosity, what will you be doing? Also- do you mind if I post your response? Thanks, NoSoup -------------------------------------------------------------------------------- Thanks for getting back to me. My only source of income is current student loan and my wife who's a CPA. I have 3 credit cards in total, the other 2 with no balance (15k and 10k limits), plus one BestBuy card almost maxed at 2k but to be paid in full in a month. That's it. I just applied for a new card that has 0% for 12 months on balance transfers then 8.9% fixed after that. If approved, I will close one card. Or should I close one right now before the application is processed? I'm a dentist in a specialty program, and no problem with posting this response. Thanks for the help. -------------------------------------------------------------------------------- In response to your first post, I would pay down that Credit Card a little bit, you are currently sitting with a 64.7% balance to limit ratio, It is best to stay under 60%. If you pay it down to 10k, you would be under that 60% mark. In response to the PM that you sent me, I would close out the Best Buy card. Because Best Buy is considered a retail store, any credit that it lends out is considered higher risk, or "bad" credit on you bureau. Another reason you should close it is because it is currently maxed out. Credit Reporting Agencies keep track of the highest balance that you have ever carried on a card. I know that Best Buy generally encourages the use of their cards by offering 0% interest on your purchase for a set amount of time, but it may be better to spend the couple extra bucks now and have better credit later. Depending on how much money you have extra each month, you may want to start contributing to an IRA account. I would suggest a Roth IRA, simply because in my opinion it is the best deal out there. I understand that in a few years you will be making quite a large sum of money, but with the Roth, there are fixed contribution limits each year-your income has no impact on how much you are allowed to contribute. My only other advice is to keep your finances in check. I'd imagine it would be very easy to run up those credit card balances knowing that in a couple of years you will be making such a large sum of money, but it will be worth the wait. When you enter the workforce, I would suggest paying off all of your outstanding balances (on any credit cards or auto loans) before moving into a house or making any drastic changes to your lifestyle. It would probably only take a couple months, and it will be much easier to pay them off with your current lifestyle than the one you adopt later. Good Luck, and if you have any more questions, let me know. Thanks for posting! On a sidenote, popo's post is a great example as to how debt is relative. Speaking for myself, I would be in quite a pickle if I had $400,000.00 dollars worth of school loans, but then again, I am not making a quarter of a million dollars a year. Thanks again, popo. __________________ I have an aura of reliability and good judgement. Just in case you were wondering...