Plastic Pinch Update for July
Like I said in my last update, the balance on my Citi card is ugly. Even with a bigger payment, and it wasn’t much more than the minimum as I’m focusing on my smaller debts, it did not level out a whole lot. I’m struggling here trying to recover from an ugly June with more expenses than I really needed to deal with. Even with spinning and rationalizing what is going on, it will not continue to go up! Here are the details on the damage I have done to these things this past month:
| Credit Cards | Balance | Credit Line | APR |
|---|---|---|---|
| Bank of America | $4,108.24 | $5,500.00 | 17.24% |
| Associates | $1,299.71 | $1,700.00 | 18.99% |
| Citi Dividend | $5,400.00 | $8,700.00 | 9.90% |
| Zales | $1,055.93 | $5,000.00 | 9.90% |
| Totals: | $11,863.88 | $20,900.00 | |
| Debt-to-Credit | 56.76% | Change | -0.77% |
I’ve decided in an attempt to try to not only motivate myself to pay it off, but force myself to pay it off within 12 months, to get a 0% balance transfer offer (with no fees!) and move the Associates balance to it. I’ll divide out the balance into fixed payments and treat it as though it were a term instead of revolving account. The Zales account will drop to $1k this month, and I would love to make a mad attempt to pay this one off this year. This would mean about 4 payments of $250 each to kill it once and for all so I’ll see if this can be done.
All the balances are increasing! Are you still using the cards? Cut em up!
Am I reading right that the Citibank is over the limit? I would get that under control before paying off the lower balance one. Aren’t they charging you overlimit fees every month?
I’m going to have to agree with Chris. Cutting them up (make a copy of the front of each card first- you will need the #’s to cancel the cards eventually), is the first step to become debt free.
No temptation to use them!
I’ve visited a few times but this is my first comment. Here’s my opinion/advice.
In short: You should make all the minimum payments each month. Apply the rest you have available to your highest interest debt.
You’re focus should be on getting rid of your 17% and 18% debt. Why are you focused on the lower interest Zales debt? I guess if you’re struggling to make the minimum payments then you should also focus on getting rid of your lowest balance debt (so you have one less required payment each month).
I would even pay off existing high interest debt before paying any new debt put on the Citicard. As long as you follow the rule that you’re not adding more debt than you’re paying off on the other cards.
You should certainly get one of these cards that has a 0% 12-month introductory period. I was successfully able to move debt between three different 0% interest cards before finally paying it off without paying a single cent of interest! You just apply for a new card a few weeks before the old one’s introductory period expires.
Chris, only the Citi balance increased. The credit line for that one also increased and I am in no way over limit on it. I normally just copy the chart from the prior month and update the numbers so something didn’t copy right I guess.
I don’t carry the cards but the reason the Citi got used is the lack of available cash for the first anniversary for my wife and I. This may not make much sense but I just didn’t want to deal with fighting about money on our anniversary so I turned to credit. Stupid, I know. Then I used it to replace her gift that was stolen from her car being broken into while we wait for money to come back to us from the bank, credit card company, and insurance company.
I’m aware that the Zales account has lower APR than the Associates card so this doesn’t make sense to pay based on math. The Zales account is what I still owe for my wife’s engagement ring (which used to be much closer to that limit when I bought it) and there is a huge emotional reasoning to want to actually own this. I will move the higher APR balance to a 0% card so that it helps me pay off that balance without paying a bunch of interest. I’m not about to open a bunch of those though because I am trying to focus my efforts on these two smaller debts before taking on the others.