Green Panda Treehouse

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Photo Credit: bnhsu

There are 5 Fridays in March, so I got an “extra” paycheck this month. How will I spend it?

• 54% will go towards my emergency fund/snowflake account (I’m also putting my extra car payments here)
• 18% will go to my IRA
• 14% will go for gasoline for the week
• 5% will go towards eating out (so far I’ve been under my budget this month)
• 9% left over will go towards padding my checking account

The credit union where I have my car loan isn’t budging, so I’ll send one large payment for March so the extra cash will go towards principal.

I’m going to get aggressive on killing this car loan. I’m seeing if I can work a few extra hours a week (from my home). I can do 5 of my reports from my computer at home and that would open up 4-6 hours of my office time for other projects that require my physical presence. Wish me well as I try to convince my manager next week.

I’m also getting more focused and organized on the site. As you noticed I have some ads and will try to increase my income with them without cluttering up the site. Please give me feedback. My intention is to make this a win-win situation where we pick up helpful financial information and I’m able to eliminate my debt.

Right now the pay-off total is $5,108.97. It grows each day with interest (something like $1.76).

If you have any suggestions for paying this loan off quicker, please let me know. What debt are trying to ‘kill’ this year? What’s your strategy?

Photo Credit: Rojer

I’ve been trying to pay down my car loan faster, so I’ve been making extra payments. I use my local credit union’s online bill pay which let’s me put a memo on my ‘checks’. I write that the extra payment is supposed to all go into the principal. Apparently that is not the case. I called customer service and I was informed that I couldn’t make a payment directly towards principal.

Every payment I make goes towards the interest accrued from the last payment and the principal.  She suggested that I just put the extra money with my regular payments. I don’t want to do this for a couple reasons:

• The extra $40-50/week (snowflake money) that I save I want to immediately put it towards the loan to make sure I don’t spend it.
• I’m worried about the interest accruing between monthly payments.

I guess I’ll spend this weekend and see if I can find the cheapest route with this. I’ll being digging around Paid Twice to learn more about snowflaking.

I’m so glad Ana from DebtFree Revolution brought this scheme to her readers’ attention. I felt so outraged about this rate jacking that I want to pass this on to people that could possibly be affected.

Business Week released an article about the rate hike. Even Bank of America’s spokesperson had no reasonable explanation.

Bank of America had sent out a letter to its customers notifying them that their rates would increase. In fine print there was an opt-out clause requiring them to send a letter to Bank of America. Interestingly, calling the bank is not an option. If they did not do this then their old balances and new balances would increase.

The shady part of this hike was how Bank of America was calculating it. Business Week explains it:

What’s striking is how arbitrary the Bank of America rate increases appear, credit industry experts say… JPMorgan Chase (JPM) and Citigroup (C) announced ahead of Levin’s hearing that they would stop the practice of raising card rates based solely on FICO scores.

But Bank of America appears to be taking an even more aggressive stance because, beyond credit scores, it is using internal criteria that aren’t available to consumers. That makes the reason for the rate increase even more opaque.

I’m glad we didn’t get a credit card from Bank of America. What can you do? Here’s some things I thought:

• If you have a card with them and a balance on it, please opt-out of this rate hike. They make it difficult, but spare yourself a larger headache.
• Try to pay the debt off as soon as possible. You may want to use your income tax return if you got one.
• See if you can transfer the balance to a card with a lower rate, preferably one with 0%.
• Try to pay the debt off as soon as possible.
• If your Bank of America card is one of your oldest cards, don’t cancel it, as it could lower your FICO score. Just don’t carry a balance on it.

I understand banks are a business. What I don’t get is when they try to increase revenue by hurting their customers. That’s so short-sighted. If you’re looking for a different bank, try ING Direct or a local credit union. I use both and I’m satisfied.