AS far as the math goes, I would just write down the costs and gains if you do it one way, then write down the costs and gains if you do it the other way. You would need to know your heloc interest to do the math for your example above, I'm just saying, write it down on a piece of paper.


spsaver said:I've been reading this forum for several months and recently began getting my feet wet, i.e. refied and increased my HELOC, applied for and received Chase Rewards Plus, opened a BOA account which paid $50, moved $ to a BOA AAA MM account, opted back in for cc offers and upped a couple of credit limits with the CLI button. Thanks to all FWF gurus.

I'm a bit stymied now as to how to move forward though, as I don't have debt other than mortgage and HELOC and monthly WorldPoints cc balance (always paid in full). What else can I do to improve things? I have a low ($25K) income (but love my job and it's only going to last for another year until my boss retires). I'm a bit anal about my credit score (homeowners insurance is hard enough to get and expensive enough here in FL). Another problem I have is I'm a bit mathematically "challenged". For example, if I receive a balance transfer offer which would allow transfer to my HELOC or checking, is there a formula to compute whether or not it would be worthwhile? Just as an example, I recently received one from Chase at .99 for 6 mo., but my limit on that card is $5K. To stay under 50% utilization it would only be $2,500 less fees plus .99% compared to either what it could earn (or save in HELOC interest)? How do you figure out the savings when you receive these offers?

soundtechie said:AS far as the math goes, I would just write down the costs and gains if you do it one way, then write down the costs and gains if you do it the other way. You would need to know your heloc interest to do the math for your example above, I'm just saying, write it down on a piece of paper.

Great...but, I'm math challenged, remember? What do I multiply by what and subtract from what? Say using the example I gave and saying my HELOC interest is 7.74 or mm is 4.72. If I know how to do it for this example, I can extrapolate it to other offers/situations.

MilesHeighway said:Here are a couple of legit question!

I own an office lot which my mom "rents" for her business by paying the monthly installment for it, back in my home country. Does this constitute a "business"? No money actually exchanged hands.

Leaving the usual flaming that goes with "family and finances don't mix" (my family is way tight for 30 years, so we are all ok), my question are :

(a) Is this a "business" (i.e. renting out to my own family)? If so, I'll use this to apply for a bunch of Business CCs.
(b) Can I add the monthly installment (the so call "rent") to my household income so as to get a larger CLI?


/me wears flamesuit. Bring it on!

(a)This can be a business if you want it to be.
(b) You can always lie about your income and worst case if you have to prove it later and can't you'll just get your account closed.
If you don't want to lie and do want to "prove it" there is a very simple test. If it is income enough to report it to the IRS then it is income enough for the CC company. If you fail to report it to the IRS (whether because you don't have to or because you are committing tax fraud) then it isn't income you can prove to the CC.

First off, a hearty thanks to asdf from a new poster who is doing his best to absorb all the great info here yet is leery of posting new threads that ask redundant questions. I think this can definitely be a great service to newbies, and making it sticky would go a long way.

And onto my question - I've gotten the info from my bank and am prepared to get my house reappraised to get rid of PMI. I bought my townhouse at 185,000 3 years ago and every sale in the last 5-6 months for my development has sold for 216k-226k. If my house appraises at 210k, PMI ($114 a month) will go away. My problem is that I'm not sure how the appraisal for PMI works, I know I have to schedule it with the mortgage company's appraisers but how detailed are these appraisals? The inside of my house ain't much to look at and my white carpets on the first two floors are absolutely ruined. But everything works (furnace, AC, major appliances etc) and functions. When I got the house appraised when I bought it, they didn't even go inside! But I have a feeling going through the mortgage company's appraiser and to get rid of $115 a month for them is going to make it a more detailed task. Any stories from folks who did the same thing? How much do they take into account current and recent selling prices of simliar properties in the neighborhood?

JWheeler2003 said:OK, here is my newbie question --
I have a Capital One Line as follows:
CapitalOne - PLATINUM VISA CL $500.00 Balance $450.00 Util 90.00% 42 Months Old Never use, trying to get my CL reported to the CRA

Now, it is my oldest line, I also have a 40 and a 39 month old line, one at $4,200CL and the other is $4,500. I also have 3 recently opened lines, $5,000, $2,000 and $1,000.

I put $450 on it to try to get my CL reported to the CRAs, but it seems it might have been better to just have left it at $0?

They will not raise my credit limit, I don't know why, but on the phone they wouldn't do it. Maybe it had to do with the fact that the last time before this I had used the card was ~18 months ago.

Would it benifit me to go ahead and close this line?
I will loose the length of the line, but will also drop the crappy credit limit. Thoughts?

Do not close the line. I would pay off the card to reduce your utilization (90% or 100% it is still going to hurt) and stick the card in the drawer. You get "full credit" for the age of this card regardless of the size of it so you definitely want to keep it open. You will not get punished for having a low limit.

So it's nearing end of Dec 2006. My limit is $3000 on IRA contribution. Im oblivious whether my employer even has a 401K/IRA contributions. Anyhoo, should I just go ahead and buy the IRA at my local bank B&M?

Corganiacs said:So it's nearing end of Dec 2006. My limit is $3000 on IRA contribution. Im oblivious whether my employer even has a 401K/IRA contributions. Anyhoo, should I just go ahead and buy the IRA at my local bank B&M?

First and foremost, find out of your employer has a 401K contributions - if they do you want to contribute as much as you can that they will match. Free money...

Secondly - though I don't have my IRA started yet, I've been researching quite a bit this week. Three of the more popular online services among FW members for Roth IRAs are Fidelity, Vanguard and Scottrade

i already put this question in BT session. But i guess this is the rite place. Please be kind...
-------
HELP FOR A NEWBIE/MORON -

I have a balance 5K in one CC. I am using another one and this has a credit line of 10K. I am going to apply for a new CC with 0% APR(12 months) and am planning to balance transfer the 5K from my first CC. I am certain that i will be getting a bigger credit line.

My question: Could i BT 5K to first card and some more ( may be 5K if i get a total credit line of 10K for the new card) to my second card(though it doesn't have any balance rite now since i am regular in paying up the balance in the second card).
This way i could avail a larger balance with 0% for 12 months.( instead of 5K, i will have 10K )

thanks for any help.

For the record, I think this thread is a very good idea (of course I'm relatively new here and have tried to post very infrequently to avoid posting anything that my might be construed as redundant).

Now on to my question, which hopefully helps others besides myself (and unfortunately is slightly redundant).

There are at least two other threads here with some discussion on this topic that I have read thoroughly, but I am hoping someone has a little more insightful analysis of my particular situation.

My wife and I (each 30yo, no kids) are in a higher income bracket (federal = 33%, state (CA) = just over 9%), max out our 401K - annual limit for where I work is 15K (as it is for anyone not self employed I believe), my company contributes approx 12k/yr irrespective of what I put in, and we can no longer put money in a Roth due to income limits. My wife cannot contribute to any type of 401k b/c she works at multiple workplaces and does not qualify for benefits at any of them, but unfortunately she also is not defined as self employed so she has no pre tax contribution available to her. We (thankfully) have enough income to save, and I would like to do so tax free if possible. In 2010 my level of income will no longer prevent me from making a Roth IRA conversion due to the recent tax law that basically removes income limits from traditional to Roth IRA conversions (provided the tax law that was recently passed is not repealed - I realize that is a sizeable if). My wife and I are not eligible to make any further pre tax contributions to a 401K or IRA (unless somehow my wife gets plugged into a 401k from one of her employers - highly unlikely at this point), but as I understand it, we are eligible to make after tax contributions to individual IRAs. This means that our income will be taxed as earnings (approx 40% marginal rate as usual) and then could be placed in the after tax IRA. In the after tax IRA it would enjoy tax deferred growth until 2010, at which point we could convert it to a Roth IRA by paying taxes on all investment gains at our current marginal rate - hopefully the same as our current marginal rate of approx 40%. From then on it would grow tax free, and would also be eligible for withdrawal at 59 and 1/2 yrs of age, again, tax free. Alternatively, I could keep the money in a regular taxable account, and, provided long term capital gains rates remain 15%, (that is a HUGE if), if we invest tax efficiently with little turnover, we would pay only a one time 15% tax on all of the investment gains that this money accrues over time.

Here then are my questions:
1.) Is this the truly rare instance where it would make sense to invest IRA money in a Muni (tax exempt) bond or bund fund? In doing so, this after tax IRA money could accrue investment return without any additional tax consequence when it comes time to convert the IRA from traditional to Roth in 2010. Am I missing something here - i.e., just b/c tax exempt bonds are treated as such in normal 'taxable' accounts are they treated differently when you try to convert a traditional IRA to a Roth (or to put it another way, will I still get taxed at my marginal rate for the income that the Muni bond generates even though it is a tax free vehicle?)

2.) If my whole muni bond method is garbage, is it still a wise move to potentially forsake the 15% low cap gains rate in the future for the much higher 40+% marginal rate up front (let's assume I don't care about the vastly poorer liquidity of the roth compared to a regular taxable account)? Is there a handy calculator to figure this sort of thing out? I know one critical part of the analysis is that I need to know what tax bracket we will be in when we take the money out. I have no crystal ball, but my guess is that it will be the same or higher (I am no fan of taxes but a top federal rate of 35% is historically quite low - state tax may drop though if I move, but hopefully my income will be not that much different at age 60). On net then I am hoping my tax rate then is the same as it is now.

3.) What is the limit for contributing to an after tax IRA in my situation? Can I or my wife even contribute to one at all?

I would have posted this very long scenario + question in one of the other forums sort of dedicated to this topic, but my question is quite specific, and I also found that the other threads were dealing with distinct variations on my questions, and I did not want to enter a question where it wasn't wanted.

Thanks for any answers that I might get! And if you think this post should go elsewhere, please direct it to the right place.

Question:

Is this worth it...

I am too afraid to do a BT into a checking account to earn interest on the $$ like everyone suggests doing in this thread but I have thought about getting the Chase Freedom card which offers 0% on purchases for the first 12 months and simply paying the minimum. I would put the amount that was actually due (minus the minimum) into a HYSA earning 5.5%. I know this is chump change compared to what some of you make off BTs but do you think this is worth doing? I tend to only charge on average $500 per month. Of course at the end of 12 months I would pay off the entire amount due so I don't get hit with ridiculous interest charges.

Any thoughts?