My Debt Blog

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:

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.

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I know it’s almost the end of July and I have put this off long enough because I was scared of it. It is time for me to suck it up and deal with it though. I feel like I got kicked in the financial gut last month. This is a blog about paying off debt and then I went and spent money I didn’t have and that set me back. Part of the issue was I didn’t properly budget in advance to handle the car insurance bill, which was paid in full, but everything got tight. Unforeseen expenses early in June drove me to the point of using the EF to hold us over until I got paid and then correct it. At any rate, here’s the ugly truth on the credit cards:

My Citi Dividend card is going to get even uglier because I used it to replace my wife’s stolen sunglasses. There are also some auto charge things that end up on that card, so I’ll beef up the payment to that account since those charges should be paid instead of charged. On a positive note all the other balances on the plastic are lowering and my payment on Bank of America has rapidly dropped by about $30 that can be refocused to other debt. I think for a short term goal, I would like to pay off the Zales account. Currently I pay an inflated payment anyways but if I were to double or triple that amount, it could be easily knocked out by the end of the year. In an attempt to reduce some of the comments, I have already taken the credit cards out of my wallet and now the only plastic I have is my debit card.

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Here’s the stats on my ugly load of credit card debt and the very little progress I have made in the short term of paying it off, yet much more progress on the long term cost of it. I got some credit line increases and some APR decreases this month which helps reduce the finance charges. Now if I push higher payments to these so that more will go to the principle besides just paying that minimum to cover the finance charge and nearly nothing of the balance.

I am considering opening a new credit line to transfer my now HIGHEST rate credit card to a 0% for 15 months. By making a bigger payment to it that should be blown away in less than that time and all with not paying any more finance charges. The unsafe side is if I don’t pay it off in time then the interest accrues from the start and that would hurt. I would like to at the least pay off one smaller account this year so I can beef up payments on the next smallest account. There has also been talk about me getting a second part time job to earn some extra income to go towards paying off debt. I have some hurdles to get through here in June because the car insurance bill is coming and there is no budget for our anniversary either. Goodbye emergency fund?

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Part of putting this blog together is to track the progress I am making on my credit card debt. These are the 4 active accounts I make regular payments on, even though I carry other various debts. I bought my wife earrings back in February and have to make 3 payments, and have one more to go. The offer was 0% interest and I’m not grouping that in my monthly updates because paying off a relatively small amount in a short period of time is not a long term goal. At any rate here is the chart:

I am trying to find a more efficent strategy to pay off more debt faster over less time or at lower interest. One of the latest options I am considering is lumping my 2 higher balance cards into one of those life of the balance low interest cards. I would much rather make a lump payment every month at lower interest than making two payments (double interest) every month and not lower their balances much. My high interest rate card company will not lower my rate, thus I have no choice but to no longer do business with them. Any other advice from readers is greatly appreciated.

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Here’s a snapshot of where I currently stand for the month of March. To my credit though I completely paid off my stove and the last $1000 for the furniture set. Take that and eat it debt!

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Let me start off by going back to the beginning of college. I’m only a 19 year old freshman at a state school. From the $18000 I saved my life for to go to college, half of it has been paid to the university. I have zero credit card debt. Responsibility got me to college, now I figured it was time to have fun.

By my sophomore year of college my money ran dry and my only source of income was loans and….dare I say credit cards. Stupid, I know. I wish I could go back and smack that kid, but we all live and learn. At this point I had accumulated about $3000 in credit card debt. Needed junk for my room and had to go out to eat dinner and stuff with my friends, right? I had that mentality that when I got out of college, having a ‘real’ job will just fix the problem.

Junior year rolls around the corner. I’m living in my fraternity house because it’s cheaper for me. I was putting every expense on a credit card, stupid again on my part, but it worked at the time. Now I’m up to about $7000 in credit card debt, the reality didn’t sink in. My girlfriend (now wife) kept telling me to use alternative student loans instead of piling school expenses on high interest credit card debt. I finally gave in and applied for an alternative loan which helped me free myself from the credit cards, I now had money in my checking account. (Stupid, I know.)

Senior year and I’m living in a really nice apartment, I had loan money to afford it. This covered the living expenses but when that money ran out towards the end of a semester, the credit cards would come in to catch me. Credit card debt climbed again, not as much, but to around $10000. If going into debt isn’t crazy enough, love can do the same. I bought my girlfriend a ring our last semester of college, and on April 14, 2005 I took a knee and asked her to be my wife.

We both rode out the rest of college feeling good about having our very expensive degree in hand (not literally, the thing they give you when you walk is blank, they mail it to you a month or so later) and ready to face the world. Moved up near Chicago, Chrissy was doing an internship and I got a job at a very large communications company as a programmer.

One would think having a lot of credit card debt would limit the chances of doing many things. I actually built up some positive credit long term credit history over my years. We knew that an apartment wouldn’t work for us long term, so the process of buying a house. It was not easy buying my first house, but I made it happen. On June 3, 2006 we were married and took a well deserved week vacation to Jamaica (the most expensive trip I have ever paid for in full ever).

The gravity of the debt situation hit me end of last year that I probably needed to start doing something about my debt. Blogging seems to be the latest trend for information, guidance, moral support, and knowledge sharing. I want to rid my life of the ‘bad debt’ that I have collected within the last 5 years. I’m 24 and have about $12000 in credit card debt.

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