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Ohmigosh! I didn't realize I had paid off one of my credit cards, and so I overpaid by about $180. I could really use that money now. They will transfer the first $89.xx back into my checking account in 3 business days and the remaining $90 3 business days after they receive the payment that my bank automatically sent them today. And I have cancelled automatic payments to that account. Now I have to decide whether I want to reallocate the $90 I sent that card every week to my one remaining high balance card or keep that money in my checking account. Normally I would simply reallocate, but my income is in a state of flux right now, so I haven't decided what's best. Still, I much prefer figuring out what to do with the extra money to trying to figure out how to pay another bill.


( 6 comments — Leave a comment )
Jan. 14th, 2006 08:56 am (UTC)
W00 H00! DUde, I love that feeling! That's terrific! Go you!
Jan. 14th, 2006 08:56 am (UTC)
Believe me: pay off your cards as soon as you possibly can. In 2000, I owed £14,000 on three US credit cards. I took out a loan, paid them off, and then paid off the loan by Feb 2003. I have been balance-free since, and it enabled me to live on our joint incomes at the same level we maintained when I was paying off credit cards. The key to early financial success is: no credit balances.
Jan. 14th, 2006 09:06 am (UTC)
Believe me, I'm trying. It's just that I live pretty much paycheck to paycheck and, thus, have absolutely no savings at all. I send as much as I can to the credit cards every week, but every time I come close to paying them off, I have some major unexpected (and thus unbudgeted) expense that has to be paid with plastic. I currently am about $10,000 in debt, about $6000-7000 due to unexpected car repairs (brakes, transmission, clutch, etc.) and about $1000 due to a death in the family.

But I am on the right track. With the help of Katie-ex, I created a budget a few months ago that forced me to take a hard look at my finances, get my weekly spending as low as I can, and aggressively pay off the debt. I think that as long as I can find a job before my unemployment benefits run out, I will be able to pay off all my credit card debt within a year.
Jan. 14th, 2006 09:56 am (UTC)
I realise it's difficult; I couldn't have done it without HWMBO keeping me on the straight and narrow with regards to spending. Once you've paid it off you'll be able to do so much more with your money and save so much in interest. Of course, the credit card companies will be pretty pissed off at you. They call people who pay off their debts each month "freeloaders" because they don't pay any interest.
Jan. 14th, 2006 05:11 pm (UTC)
Yeah, they hate me. Which doesn't stop them from keeping offering me more credit cards. Maybe they hope that if I have enough of them I'll spend myself into debt.
Jan. 14th, 2006 02:47 pm (UTC)
Yay! That's a great feeling (well, not the overpaying, but the paying off a card). And while I do see the usefulness of automatic payments for people who tend to forget to pay bills on time, I can't imagine using them myself without at least looking at my bill statements regularly to see what's been paid and what the balance is, so I do find it a bit odd.

Anyway, the canonical wisdom is to pay off the debt. But, it's not necessarily what I would do, because I do like having at least a little bit of easily accessible money in savings. I'd say if your interest rate is high on the high-balance card then maybe it really would be best to increase payments on it to pay down faster. For me it would be tempting to see this in some ways as an "extra" $90 per month, but if I reframed things I would see the $90+n I'd been paying as a combined amount that I spend toward credit card debt each month, regardless of how the debt is distributed.

In your situation what I might actually do would be to put part of the $90 toward the credit card bill each month, and the other part in savings.

I'm also going to vouch for the effectiveness of the "save your change" approach to saving. Really. I started doing this with my cash a few months ago, and when my bank recently offered a way to do this with debit card purchases I decided to try it.

Of course, selling my car and getting paid back by Bri account for most of what I now have in savings, but I've also managed to stash away several hundred dollars between the "saved change" method and simply noticing at the end of some months that I had a little more money in my checking account than I needed to pay off bills and sliding that off into savings.

Good luck in your mission to become debt-free.
( 6 comments — Leave a comment )

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