Budget Freak

As you may know, I’ve been making money taking advantage of 0% balance transfers offered by many credit cards. So far, I’ve made over $90, and I’ll be getting another interest payout of $75 by the end of the month. When taking advantage of these offers, it’s critical to keep up with payments. Any late payments, and the 0% offer is revoked and you’re stuck paying interest. I’ve paid 3 bills so far on my two different cards, and it’s been pretty smooth. I’ve also helped myself by setting up reminders that go off at various times the week before the payment is due. If you try something like this, I highly suggest you do the same.

Things are going so well, I decided to push my luck and apply for more cards. Over the weekend, I applied for 4 more cards offering 0% balance transfers, a Chase, American Express, a WaMu card, and another Discover card. I heard back right away from WaMu (only a $1,000 limit ), I was rejected by American Express, and I’m still waiting from Chase and Discover. Looking back, I’m pretty sure I screwed this one up. My credit score right now is probably in the toilet. If I had done these applications when I originally started the arbitrage game, I’m sure I would have been approved, no problem. Now, I’m around a 60% debt to credit line ratio, and I have a few recent hard credit pulls in the last 3 months. To a credit card company, that’s a huge risk, and they’re unlikely to hand out a large credit limit, if they’ll even hand out a card at all.

The smart thing would have been to wait until my balances were lower and the old credit pulls had fallen off (at least 6 months). I guess I got a little impatient. Lucky for me, I’m not too worried about my credit score right now. I’m not planning any large purchases for at least another year, if not 2 or 3 more years. Even still, these inquiries will disappear in a few months, and as soon as I pay off the balance transfers, I’ll have a clean slate.

Then again, maybe I’ll get lucky and Chase and Discover will approve me. Who knows.

One more thing to note, the WaMu card I applied for did have a 0% balance transfer offer, but it also had free access to your FICO credit score. This alone, is worth applying for the card, and I’m really glad it’s the one card I did get approved for. Most companies will charge $10 a month or so to check your credit score, so I had to jump when I saw it for free. Now I can actually watch my credit score take it’s nose dive!

I just requested a free credit report from www.annualcreditreport.com. You’re entitled to 3 free credit reports a year (I think it was a law that was passed a couple years ago), from each of the major credit reporting companies. They don’t include your FICO score, but it will list all your open accounts and if there are any late or missing payments. It’s a good idea to make sure everything is in order every now and again.

My report was all intact. They did misspell my company name (swapped one letter), but I don’t care enough to fix it. Hopefully that won’t hurt anything. Also, I noticed that Capital One noted that for 4 months in 2006, my account information was “Unknown.” How the heck don’t they know what my credit status was? The other 44 months on the report are all “OK,” but for some reason, those are missing. Strange.

I’m getting more and more concerned with my Capital One card. Part of the reason I wanted my report right now, is because of this article about Capital One hurting your credit score. It seems they record your credit limit as your highest balance, thus hurting your credit balance to credit limit ratio. On my report, Capital One doesn’t even have my credit limit listed, where every other card I have does. Lord only knows what that means.

Anywho, it’s good practice to check your credit report every couple months, especially now that it’s free. The way I’m going to handle it is just to get one report every 4 months from each of the 3 companies. Since I just got this one in March, I’ll set up a reminder in my calendar to request one again in July, and another one in November.

By the way, if you ever do need to check your FICO score, golbguru has posted a great tutorial on getting your credit score on the cheap. Check it out.