In the prior installment of this series, we listed several approaches to debt consolidation. For this third post, we’ll be turning a critical eye toward the first one on our list, the popular credit card balance transfer.

At a high level, evaluating and using a balance transfer follows a 7-step process:

1. Gathering information about your current cards
2. Finding balance transfer offers
3. Understanding the terms of a balance transfer offer
4. Crunching the numbers
5. Making a decision
6. Things to do after the balance transfer takes place
7. What not to do after the transfer

Let’s take a closer look at each…

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Popularity: 33% [?]

I discovered peer-to-peer lending with Prosper.com in October last year and I quickly became fascinated with the whole concept. After some initial learning curve and paper bidding, I took the leap and invested $1,000 in 20 loans of $50 each. I am happy to report that all my loans are still going smoothly.

By reinvesting the profits, I now have 22 loans at an average interest rate of 14.99%. All of these loans have been current with their payments so far. Time will tell whether my success is just “dumb luck” or the method by which these loans were selected has some long-term merit.

In this series of posts, I’ll be sharing with you the method I’ve developed for selecting loans. The reason being is two fold: one is to give back to the Prosper community that has helped me learn the ropes, and secondly, to improve the method through public peer review for everyone’s benefit.

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Popularity: 24% [?]

Here are some interesting nuggets I found while sifting through my RSS feeds this week. Enjoy!

• Why You Need a Credit Card - Patrick at Cash Money Life writes on the benefits of credit cards. One statement I agree with 1,000%, “The key is using your credit card properly, which means only borrowing amounts you can afford to pay off right away. If you follow that method, you will never get into trouble by using your credit cards.” Bullseye.
• How We Got a $1608.43 Cash Back Rebate Check - Kudos to Jim at Blueprint for Financial Prosperity for using the Citi Cash Returns card for what it’s best at– massive short-term expenses. Way to go!
• Eleven Perspectives on P2P Lending - Prosper Lending Review presents a question from a reader who wonders if he should invest a $100,000 nest egg with Prosper. Eleven different bloggers and lenders chime in with their opinions.
• Fynanz: How Students Spell Peer-to-Peer Loans - Erick Schonfeld over at TechCrunch introduces a new peer-to-peer lending site that specializes in loans to students. Fynanz has longer term loans than other sites such as Prosper.com and lower interest rates as well. The interesting twist with Fynanz is that they help share the risk of the loan by guaranteeing up to 100% of a loan’s value should it default. Additional coverage of Fynanz this week can be found here.
• Looking for a High-Yield Savings Account? Provident Direct Could be an Answer - Sun’s Financial Diary gives readers a heads-up about a new online savings account I hadn’t heard of yet, Provident Direct. I don’t have any experience with them, so naturally I don’t have an opinion yet about the account. It is still offering a 4.50% APY return right now, which is extremely high. My bet is the rate will come down due to the recent rate cut, but may likely still be one of the highest rates out there.

And finally, the one that gave me a chuckle was FinanceGirl’s 10 Signs You Have Finanacial OCD (thanks Karen Datko for the heads up!). Wow, I thought I was persnickety with my money. At least I now know there are people more particular with money than I am. As for #’s 2, 5, and 10… uuuhhh, I have no comment!

Popularity: 26% [?]

In the first post of this series, we explored the different ways to pay off credit card debt. As I stated in that post, debt consolidation is my recommended approach. In part 2 of this series, we’ll now take a broad-brush look at some ways you can combine your debts under one lower rate.

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Popularity: 28% [?]

When the news came out Tuesday about the Fed cutting the funds rate 75 basis points (3/4%), it was a foregone conclusion what would happen next– rates on online savings and interest-bearing checking accounts were about to follow suit. Well, the inevitable happened today for FNBO Direct as they reduced their interest rates from 3.85% APY to 3.25% APY.

There’s still a couple of silver linings though about FNBO Directs‘ rate cut. For one, FNBO didn’t lower the rate by the same amount the Fed did: a 0.60% drop versus 0.75% respectively. The second benefit is that FNBO’s new rate is still higher than some other bank’s rates that have not yet adjusted. For example ING Direct is at 3.00%, Salem Five’s eOne account is at 3.1% and Schwab’s Investor Checking is at 3.01% APY. I expect all of these to drop into the 2’s within a week.

Popularity: 27% [?]

Number of credit cards used… 3.

Free money earned… $2,222.75.

Finance charges paid… $0.

Having credit card companies pay you instead of the other way around… priceless.

Last year, I earned over two thousand dollars in free money using an arbitrage strategy with cash back credit cards. I say this not to pat myself on the back, but to make a point that credit cards do not necessarily have to be a bad thing. When used in a certain way, they can be quite profitable.

Credit cards make me money (instead of costing me money) because I pay off my balances in full each month. I realize though that I am in the minority of the credit card using public. Due to family emergencies, unexpected repairs, or even a bit of impulse spending, many people have credit card balances that exceed their capacity to pay off in one fell swoop.

This multi-part series of posts will show you how to pay off credit card debt and get to the happy place where you can turn the tables on the credit card companies and have them pay you for a change.

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Popularity: 21% [?]

I have noticed recently that people have been finding my site when looking to compare the American Express Blue and Blue Cash cards. If folks search long enough on my site, they’ll find out a decent amount about one of these cards, the Blue Cash; however not much in the way of a side-by-side comparison between the two. In this post, I’d like to close that gap so people interested in one of these cards can quickly see which one might work best for them.

Before diving into the differences between these two cards, let’s cover what they have in common. With either card, both will offer the following:

• No annual fee
• Ability to carry a balance (in addition to the option of paying off the balance in-full each month)
• 20-day grace period between a statement close date and its payment due date
• A rewards program (the details of which differ though)
• No limit or expiration on the rewards you earn
• Introductory 0% APR on purchases

Subscribers to my tutorial on getting free money know that I’m no fan of carrying a balance. The interest rates on credit cards are rarely low enough to justify carrying a balance. With both the Blue and Blue Cash cards however, it’s easy to make an exception to this rule. With the 0% APR on purchases, I myself carried a revolving balance on the Blue Cash card, then paid off the entire balance at the end of the introductory period.

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Popularity: 40% [?]