20.99% or 1.99% interest? A no-brainer

Now that we’re man and wife, I’ve finally decided to take a closer look at Mr. Saver’s two major credit card accounts.

Apparently, I should have looked sooner.

One is at 16.74% with a balance we can quickly pay off, and the other at 20.99% and a larger balance. This second card has been accruing $60 in interest alone, monthly, while he pays a paltry $100-$200 toward it each cycle. I almost fainted.

Conveniently, I received a balance transfer offer for 1.99% through January 2010, with a 3% transaction fee. I couldn’t move that money over fast enough. The transaction fee is “only” what he would have paid in interest in 45 days, so it’s totally worth it.

We should be more than able to pay it off by January, but worst-case scenario, it reverts to my usual 6.74% interest rate.

And we’ve put a moratorium on using his cards. To keep the accounts active, though, we’ll put minimal purchases on there, knowing we’ll pay the balance off in full come the next bill. That way, we’ll continue to lengthen Mr. Saver’s credit history, since they are his longest credit accounts.

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