Plastic Pinch Update for August
Things are going down but nowhere as quickly as I would like it to. I’m at least where I was before June and all those events happened. Instead of trying to pay off debt I am trying to avoid increasing it. On the other hand my wife isn’t helping us opening a store credit card and buying a bunch of clothes with it. Debt reduction seems counter productive when this happens. Here’s where I currently stand:
| Credit Cards | Balance | Credit Line | APR |
|---|---|---|---|
| Bank of America | $4,067.98 | $5,500.00 | 17.24% |
| Associates | $1,297.89 | $1,700.00 | 18.99% |
| Citi Dividend | $5,346.00 | $8,700.00 | 9.90% |
| Zales | $1,000.00 | $5,000.00 | 9.90% |
| Totals: | $11,711.87 | $20,900.00 | |
| Debt-to-Credit | 56.04% | Change | 1.28% |
I’m glad I got the Zales account down to the 1k because that means it will fall below that next month. If I could figure out a way to budget four focused payments of $250 I could kill that by the end of the year. I also opened a new credit card myself that offers 0% APR for 12 months and $100 gift card with initial purchase. So when I get the card I’ll have to wait before doing the balance transfer to it and buy gas or something with it, pay it off, collect my gift card, and then transfer a balance to it. It will be nice to not pay interest and focus every dollar on principle. Just have to figure out what to do about this store card my wife opened now.
Be careful with that new card. A slipup could land you in a worse position than with the ones you have now. Also make sure there is not a transfer fee (typically 3%) for those balance tranfers, and you will not be able to use that card for ANYTHING, and make absolutely sure the balance zero before transferring - otherwise you’ll get charged interest on that balance until you pay off your 0% transfer. Not fun!
I would immediately pay, cut up, and cancel that new clothes card.
It will take about a month to charge, pay, and grab my gift card offer out of this new card. Once the balance shows zero I will then go about the balance transfer(s) depending on what kind of limit I am dealing with. The nice thing about this card is there are no fees or cost at any point during the introductory period. So if I pay it off in 6 months, I could transfer another cards balance to it and keep it going until the 0% runs out unless I pay it off first. The overall goal of the 0% card is to get that principle balance down faster.
The total damage done with the clothes card was $360. If we had an extra $360 lying around, she would not need the card. I know it sounds very simple or easy to say “pay it off and close it” but it isn’t. She opened this new account, charged a bunch of stuff to it, and then basically handed it off to me to take care of it. We didn’t have the money for her to buy a bunch of clothes, but the credit card allowed her to do it. She felt like she was solving our lack of money by doing this.
This extra payment doesn’t help our budget at all because it’s just another thing to deal with every month. I am thinking it might be better to consolidate some of her small store cards so there’s only one payment to deal with. The number of payments and keeping track of them all throughout the month is stressful. If I had the money I would pay it off otherwise.
Seems like one thing you could do (I find this works really well for me) and it might help your wife, is to take a huge piece of posterboard and write each card, loan, etc… on it with the amount owed. You write that part really big, leave enough space under it to write each payment. When a card/loan is paid off, you get to draw a huge, thick line through it. Hang this in your kitchen. It’s a big, honkin’ visual reminder of your goal and what you’re are actively doing to get there. It helps me because I see it, and I am encouraged to strive to do one more thing to put money towards my debt, whether it is to try to have a spend-free day, or changing plans with friends to invite them over instead of meeting out. Or changing plans with friends from a full dinner out to just drinks.
If there’s one thing that I have learned, is that it’s stay away from consolidation. I tried it multiple times over the past ten years and each time, I would run up the credit card again. Then I would have the loan, plus new debt on my credit card.
Also, with your wife having multiple small store cards, you have a real opportunity. As each small debt on the store cards is paid off, you have a chance to celebrate the baby steps your wife is making towards accepting/embracing your goal of being debt free. As she sees how small changes on her part have a great effect on your family’s debt, it will encourage her to continue to make changes in her behavior. She can also feel that sense of accomplishment of paying something off.
This is a lot longer than I intended, but I guess I had a lot to say. Hope all is well and best wishes for your continued success!
For a spouse to go out and open up a new credit card and buy a bunch of personal stuff with it without any discussion when you’re broke and in debt is totally unacceptable in my opinion.
You’re much more patient than I am! If my wife had done that to me and then dumped the bill in my lap and told me it was my problem I probably would have thrown her purse onto the driveway and set it on fire.
It does seem like your wife is working against you and almost mocking your efforts to live debt free. There’s definitely a power struggle here.
I hope that something gives very soon. Living a life sponsored by Dillards or Visa can get old really fast.
I couldn’t understand some parts of this article , but I guess I just need to check some more resources regarding this, because it sounds interesting.