Tag Archives: debt

First and last credit card

My first credit card — a Chase Rewards card that I got back in 2005 to help with Thorn expenses — is now my last and final. It had a $300 credit limit when I got it, and had a $2700 limit earlier this evening. I paid the remaining bit of balance on it this morning and closed it just 20 minutes ago once I saw the balance was $0. It took 2 minutes and 52 seconds to sever my last line of revolving credit.

I feel strangely… cut loose. Like I’m no longer wrapped up in so much of America’s debt problem, even though I still have loans.

But all that’s left is the $25k of my student loans and the bit I owe my parents.

You might laugh at “only” $25k, but $25k at ~6% and 0% interest (student loans and parental loans, respectively) beats $6k at 30% interest any day in terms of my ability to sleep at night.

December 2010, y’all, if my salary stays the same in that time. Unfortunately, my credit card woes won’t disappear off my credit history for 7 years, or 2014 for the worst of it. The “worst” being some rather late bills. 2015 for all the revolving credit info to be gone.

I’m very glad that I realized at the end of teaching that I needed to get the debt under control (that is, gone), rather than after I was earning larger wages. It’d be much harder to curtail spending and sack away money if I’d grown accustomed to spending all that I earned on a proper developer’s salary. Now I have about the same living expenses as I did when I was teaching, but more than half-again the income.

That’s good stuff.

Step 0, done

Thanks to my NC and federal tax returns, I am now current on all credit cards and ready to “snowflake” my way to a starter emergency fund (with the help of my IN tax return and the economic stimulus check, yes).

In the process, I paid off what remained of my tax debt from last year with no additional money out of pocket.

Lingering headache aside, today is starting off very well. Windfalls are nice. Paying well over $900 toward my high-interest debts in a month is nice, too.

Now I just need to get those interest rates lowered with some phone calls during lunch.

On tax returns and economic stimuli

So, as I’ve made clear in the past, I’ve decided to take on my debt full-tilt using ideas from Dave Ramsey’s books and various financial blogs I read.

My budgeting earlier this year was skewed by irregular income for a couple of months, courtesy of leaving teaching, having unemployed time, then starting a new gig.

I’ve been chipping down at one debt in particular these past few months — it’s a credit card where one charge went just over the credit limit, blooming in fees and extra charges beyond what I could pay during my paycheck-to-paycheck living while teaching.

I made out like a bandit on my tax return this year, both on the federal and the two states I filed for. Other friends seem to have made a lot more, but I’ll take my $1200 and run, given that I owed last year.

That $1200 will get me current on that credit card — the first, often-unmentioned step of Dave Ramsey’s plan — and the remainder, along with my economic stimulus check of $600, will get me very close to the starter $1000 emergency fund. I went ahead and created myself an account and snowball plan at What’s the Cost. Luckily, my two highest interest debts (don’t even ask) are my smallest — the two credit cards. After that, my next biggest is a loan from my parents, but that’s zero interest. I think I’ll still go ahead and knock that out before I tackle my student loans, especially since there’s a real person on the other end of that debt.

Paidtwice wrote just this morning about how debt sucks because every windfall is already spoken for. I don’t resent using $1800 to pay down my debt, and I don’t even feel bad about not stimulating the economy with my $600 check. I find it satisfying, like she does. If I were free as a lark from debt and with a good emergency fund, I honestly don’t know what I’d spend the money on. I’d probably invest some and use the rest to plan a trip to Texas to visit T-dawg, my parents, and the sister (who’s growing up way too damn fast!). I’ve always lived paycheck-to-paycheck and fighting with debt, so that kind of windfall, with no real strings attached, is foreign to me. At tax time in two years, though, let’s see where I am.

I’ve been eagerly and repeatedly checking my bank account for my refund deposits. I want to get this ball rolling. 🙂