@quikj9 wrote:
@IsambardPrince The OP stated that they got a debt consolidation loan for 18k from SECU to pay off their credit card debt at a much lower apr, so there's no need for the debt snowball method here. Their credit card accounts will soon show a $0 balance and their utilization will plummet, driving their credit score up.
I don't like debt consolidation loans unless your plan is to cut up the cards now and never use them again.
They just return the balance on the credit cards to zero and move the mess somewhere else, and the card companies don't mind them because they know full well that 95% of the people that do this are just going to charge the cards right back up because psychologically it seems like the mess isn't there anymore because they swept it under the rug.
Most people will end up with twice as much debt, only the other debt will be at 10-12% instead of 20-30%, but then they'll have all this new debt, so it won't matter.
If you leave those accounts open, you're leaving open the path to what got you into so much trouble already so it can come back and hurt you again.
OP should still close Citi and use the deposit money towards repayment of debt.
OP also stated: "I have some high business expenses that i want to benefit from the points from prime cards."
Credit card points do not matter, at all, if you ever pay them interest, even once. The value of the points doesn't matter if you ever pay them a single interest payment. The points go away and you get hit with many times their value in interest on the first "revolving" month.
The credit card companies are marketing companies. Every detail about how they design a credit card is meant to bait a trap and soak you with interest and fees somehow. The only reason they pay "points" or "cashback" is to bait the hook. They hope that you'll go heavily in debt when your original plan was having visions of a free vacation after putting your bills through the card that year, and that's why they run these programs.
To be fair, nothing requires you to behave that way, but it's easy to mess it up, and they designed it that way on purpose.
If you do not approach a credit card as "This represents real money that I had/have to work for, and then some, if I don't pay it right back.", you won't have credit cards. The credit cards will have you. When most people see credit card points, their mind detaches from the spending and starts thinking about that vacation at the end of the year with the points. It makes them spend more to chase points.
Most airline miles are unredeemed. There's enough unredeemed airline miles out there in America to send 20,000 people to Pluto and back about four times.
Banks set these things up so that your points are dangling and subject to being stolen from you the longer they're in a cashback account. If they close your account or audit you, they claw back or freeze your points so you can't redeem any of them. Many people who leave points in a cashback account end up losing hundreds or thousands of dollars when they expire or the bank closes the account and takes them all back.
That's why you also need to cash out constantly. You also don't earn interest on this balance, so the longer you go without cashing out, the more inflation chips away at it. You're loaning your points back to the bank at 0%.
The credit card companies only have points and cashback programs because if there was nothing in the card for you except fees and interest, most people would just go back to using their debit card. So the card companies don't want to do it, it's just lipstick on the pig.
These schemes were designed by people like Andrew Kahr to make OP think he's winning with money when he loaded up his cards, paid them a lot of interest, and now just has a different kind of loan with interest to scoop and toss his credit card debt.
The way the scheme works is you spend a dollar and someone gives you a couple of pennies. Then if you don't pay them back in roughly a month or so, you lose them and they start charging.
I went off the rails a bit about Care Credit that got another thread locked because moderators here don't like people who state the facts about these products. Aside from a 0% financing plan, there's almost no value in this card. Mostly, it finances elective and vanity procedures, not necessary medical care. It has sky high interest because it's from Synchrony Bank, and it doesn't earn any points. They offer it at dentist offices for the same reason anyone does. It enables the dentist to charge more without having to worry about who pays or not, suing the ones that don't is now the bank's problem. But if I went to the dentist, I would pull out a card that gave me 3% of the cost of getting my tooth worked on and pay it back in full at the end of the month.
I asked my spouse's dentist how much she would charge me for Invisalign. She said "Your teeth aren't that bad, maybe $4,600." and this was two years ago. I said "Ouch." and she said she could sign me up for Care Credit. I said, "It's not that I can't afford it, it's that $4,600 isn't worth it so that my teeth are a little straighter with a hunk of plastic in my mouth."
I think the dentist is probably back there just 3d printing this crap and loading up a Care Credit card. Good lord.
