Update on the D-word – Getting out of debt
We talk about debt around here. It’s safe.
When I first mentioned my credit card debt last summer, tons of people commented with relief, “So it’s not just me who’s working on this!” I still can’t believe that I shared my total number, but I’m going to do it again. And also a cool tool you might want to try.
My numbers, today:
Total: $28,621 (down $1,784 since last August!)
Card 1 9.9%: 4,712 (down $679)
Card 2a 2.9%: 1,420 (down $633)
Card 2b 34.9%: 2,522 (down $56)
Card 3 23.9%: 14,467 (down $416)
(Update: Bank of M&D Loan 0%: $5500)
The bad news:
Out of the $4,800 I’ve actually paid to these companies over the last 5 months, only a fraction of that amount went towards paying down principal.
But it wasn’t just the interest rate that got me. I take responsibility for the 2 late-fee payments because my bill-paying system isn’t working effectively enough. And the increased APR on Card 3 as a result of one of those late payments. It’s ouchie, yes. I had some big emotions about it (mad, sad, giving up, etc.). But there it is. Those slip-ups cost me cash.
The good news:
Gosh, it feels good to be in the 20’s – and out of the 30’s!
The plan: Even with the setbacks, I’m on track. My plan is working: pay a set amount every month that exceeds the minimum payment. I won’t bore you with the intricacies of that plan, but in short, I’m paying as much as possible on the highest APR accounts first. And this highest % happens to be the lowest balance, so I’ll be excited to get that one outta here!
New laws: On February 18th, the new credit card legislation goes into effect (CCARD details) and the payments I make to Card 2 (which has 2 different interest rates) will start going to the higher interest account, not the lower. Thank you muchly, Pres. Obama, Congress and Senate! That will put more of my money toward paying them off.
Cool tool: The cool tool I found is a credit card pay-off calculator. According to this tool from CNN Money, it will take me 3 years and 3 months to eliminate my debt if I keep paying the same amount ($800/month). And only about 25% of that will be interest. What, you might wonder, would it be if I only pay the minimum balance? A nice, round 30 years to pay it all off – and about 75% of that would go toward interest.
If that’s not an incentive, I don’t know what is.
Do you wonder how long it will take you? Get out your most recent statements and fill out the online debt calculator (completely anonymous).
Share if you like – what are your most recent successes toward getting out of debt?
Organized under Creating order, Inspiring motivation. Labeled as credit card, credit card debt, credit card legislation, debt, small business.
41 days ago,
Sarah said:
Hooray for you for being up front about this! Money is one of those giant taboos in our culture, and I definitely would’ve gotten into less trouble with it if it hadn’t been.
My most recent triumph is that my biggest debt is now below $10,000. Somehow, taking a digit off feels like a big deal
40 days ago,
Gina Rafkind said:
Hey Jennifer,
Is there any way you can transfer your balances to one card? the card with the lowest interest rate? I have gotten emails in the past from my credit card company about transferring balances I owe on other cards to that card.
If not, have you tried talking to the credit card company about lowering your interest rate? I know people who have gotten lower rates from doing this.
Just a couple suggestions of things I’ve heard about.
Keep going – before you know it you’ll be below 2!
Best of luck!
40 days ago,
Vicky said:
Hey Jennifer – well done. But am I missing something here – I added those 4 figures and got $23,121. Sounds way better too! Keep up the good work.
And yes, when I had CC debt I asked the CC co. to reduce the interest rate and they did.
38 days ago,
jennifer said:
Sarah – Thanks! : ) Yay!
Gina – Yeah. I won’t bore you with the details, but my negotiating options are limited.However, I *am* looking into consolidation for the 34% card especially with the lowest 9% card – which would be awesome. Thanks for the cheers! I can’t WAIT to be below 2! : )
Vicky – Ya got me! I just updated the post and added the loan that was included in my total. Nice to see you here!
36 days ago,
Sally_K said:
Hi I think it is great you are sharing your debt to the world. Debt is something that can decrease with light and grow in darkness. I know you said your negotiating options are limited but have you tried calling each credit card company and talking to a human. The worst that can happen is they say no, but I’ve advised lots of people to do this and the credit card companies surprisingly have been willing to do some very helpful things like setting up a payment agreement and knocking off a bunch of interest. I always tell people to just make the call, it can’t hurt.
Congratulations on getting your debt down!
Sally_K´s last blog ..Squeeky Clean Social Media Winner
17 days ago,
Mark W. "Extra Crispy" Schumann said:
Actually.
One of my friends does those go/no-go credit decisions for a certain unnamed Bank in America.
She says that sometimes customers who ask for a credit line increase are not only declined for the increase but also have their limits decreased due to excessive debt or bad payment history. In some cases their cards are even canceled.
I don’t know whether this ever happens in a balance-transfer scenario. Just saying that sometimes they really can do worse than say no.
Mark W. “Extra Crispy” Schumann´s last blog ..When to give up