How I'm Paying For It

UPDATE, July 22, 2011:  I took advantage of a second credit card offer for a 0% APR on all purchases for over 12 months, so instead of the Citibank balance transfer, I will just charge my entire cycle and hormones on the two 0% APR credit cards.  Even better.

Original Post:

I was hoping for some beneficent loan program at RMA that would allow me to borrow $15,000+ at 0% interest, but no such luck.  I was handed a brochure during my initial consultation for some financial options provided by a third party company, but the interest rate wasn’t low enough to interest me.

I am in the fortunate position that I have some liquid assets, but as most of it is in stock that I don’t want to sell right now, I’m trying to come up with other options.

So I am going to do what may be a very foolish thing and charge this on no interest credit cards and pay it back before the APR goes up. 

I am a Citibank Platinum cardholder and was planning to take advantage of a current promotion: 0% on all balance transfers until November 2012 (with 3% balance transfer fee).  My credit limit on that card is sufficiently high enough to cover these costs, but I was a bit bummed that I’d have to pay 3% in balance transfer fees to borrow $15K (so $450), plus my debt to credit ratio on that card would not be at the ideal ~30% level.  I was all prepared to do it anyway.

Then a good and caring friend who is aware and supportive of my egg freezing plans forwarded me a Citibank “Dividend” credit card offer that she received—0% interest for 12 months, including purchases!  I applied immediately and got a $9,400 credit limit, which has the added benefit of lifting my credit ceiling (which means my debt to credit ratio is suddenly lower).  I plan to use this credit card for the entire $9000 egg freezing cycle.  I'm not sure if my FICO score is impacted by the high debt to credit ratio on a single card or if it's about the aggregate debt-to-credit ratio across all my credit lines, but at least it's an interest-free loan.  I may consider charging $8K on this credit card and put the $1K on my AmEx for some breathing room.

Then I plan to borrow $5K from the other Citibank “0% on balance transfers” offer and suck up the 3% balance transfer fee (now only $150 since I'm borrowing less on this card).  This amount should cover the hormone medication, anesthesia, and the anticipated $300 for FSH/Estradiol blood tests before I begin my cycle.  I will actually charge the meds to my American Express Cash Back card so that I can get 1.25% cashback on this amount, and pay the AmEx in full next month with the proceeds of the balance transfer (so I get 1.25% savings on the hormones). 

If there are any additional costs that crop up, I should have enough cash to cover it (I hope).

My overall debt-to-credit ratio should be ~35% so I hope that's an acceptable number.  And that number should go down by 2.3% each month as I chisel away at the principal.

I wonder of Suze Orman would approve of my strategy or yell at me.

In terms of paying back these amounts, I’ll make sure to keep up with minimum payments for both Citi cards, but I will begin by paying off the new Citibank “Dividend” card first since the 0% offer expires sooner (12 months from today) and I’m trying to improve the debt/credit ratio on that card ASAP, in case that matters.  The hope is that if I pay off $1000+/month, I will be able to pay off the Dividend card by May 2012 at the latest, and then I can focus on paying of the $5K left on the Platinum card between May and November 2012 (when the 0% expires).  

I am not making any changes to my monthly 401K contributions in order to pay back credit cards soon-- my company generously provides a match for my contributions, and it's stupid to turn down that match money in order to pay back 0% credit cards sooner when I have reasonable time to pay it back.  Suze Orman would surely approve of this decision.

I know that this payment strategy may tarnish my sterling credit in the short term because of the higher debt/credit ratio, but I think it’s the smartest way to do it given my options, and I don’t think I will be using my credit scores any time soon for a major loan.

If I could do one thing differently, I would have maxed out my Flexible Spending Account contributions for this year.  I absolutely thought about it at the time I was enrolling in FSA, but I didn’t want to risk maxing it out because I wasn’t sure if FSA could be used for egg freezing expenses.  But seeing how FSA debit cards are used, it seems like they're not that closely monitored, and in many cases, it's difficult for card issuers to assess whether the expenses are for infertility (covered) or proactive fertility treatments (probably not covered).  In Cigna’s list of eligible expenses, the only time anything egg freezing-related is addressed is under Donor Egg Extraction (which does not apply to me):  

Donor egg extraction - Procedural expenses paid for the process of donor egg extraction to treat infertility are reimbursable. 

And Infertility (which also does not apply to me):

Infertility - Medical expenses related to the treatment of infertility are reimbursable. Eligible expenses may include egg storage, egg donor costs, infertility monitors, in-vitro fertilization and sperm washing. Surrogate costs associated with a qualified dependent of the taxpayer are reimbursable and may include such things as blood compatibility testing and psychological exams. If the surrogate mother is not a qualified dependent of the taxpayer, the costs that the surrogate mother incurs are not reimbursable. Storage costs associated with the freezing of blood cords, embryos, placentas and sperm (sperm banks) are generally reimbursable when a specific medical condition exists. Additionally, these costs are reimbursable only for a limited period until they can be used to treat the existing condition (generally up to one year). Physician's diagnosis letter required.

Maybe next year I can use my FSA for the cost of keeping my eggs on ice...