Credit Card Paydown…Winning!

Having done this a few times now, I’ve learned that it’s not so much about how large a balance you’re carrying but how able you are to make constant and consistent payments while keeping the credit cards in your wallet.

Here are the three puzzle pieces that determine success or failure: Payments Made, Interest Charged, and Purchases Made.

The total balance doesn’t matter one bit. $20 in the hole or $200k in the red, it doesn’t matter.

In hockey terms, it’s a lot like a player’s plus/minus rating.

For those that don’t follow ice hockey, the +/- is a statistic that doesn’t take into account how many goals a player has scored. If you’re on the ice when your team scores a goal, whether or not you’ve influenced the play at all, you get a plus one. If you happen to be on the ice when the opponent scores a goal, you get a minus one. Pretty simple, huh?

Well, sometimes the most valuable player on a team is the guy with the fewest points. Some players are just “good luck charms” for those around them and the +/- rating is what showcases an otherwise un-noticed talent.

Brad McCrimmon, who sadly died in that hockey team plane crash a few months ago, has always been the “stud” of this statistic.

He was a defenseman who never once scored more than 13 goals in an entire season. Thirteen goals isn’t very many.

Casual fans thought of him as a, well, just a generic and totally replaceable player. I know I was never “excited” to see him on the ice — really, just a boring player among the likes of an offensive lineman in football or the guy who bats eighth in baseball.

Simply put, no one was chanting his name.

But when you took into account the +/- statistic, well, he was second to none. It became crystal clear that his team scored often and the opponent pretty much never scored while he was on the ice.

So, even though he wasn’t on the score sheet very often, he was, in a technical sort of way, the best player on the team. By far.

Back to finances…

So, first and foremost, my payments for the month (goals for) must exceed the sum of my expenses and the finance charges (goals against).

It’s really that easy.

I don’t even need to address the total balance — as long as the above holds true, I’ll always be headed in the right direction.

Duh?

I know, this isn’t rocket science but so many people somehow manage to lose track of how simple it all is…

So far, in January, I’ve charged $399.06 and I’ve submitted $1473.95 worth of payments. There have been no finance charges as of yet.

That means that my plus/minus rating is plus $1074.89.
And we’re less than halfway through the month…

Winning!

(I know, I know, I’m 6 months late with the Charlie Sheen references…)

Posted on January 14th, 2012 at 7:43 am by Brainy Smurf
2012 Goals, Credit Card, Finance, Motivation | 1 Comment »

New Feature from Citi!

Mixed in among all of the inserts that always come with my Citi statement and bill was this nifty little flyer.

Talk about spin… I mean, they’re trying to imply that they’re meeting my “borrowing needs” better than ever before by raising the minimum monthly payment.

Say what?

This reminds me of how owners of Sony Trinitron televisions and monitors in the 1990′s would brag about how they’re screens were actually better than anything else on the market when, clearly, they weren’t. They had a MAJOR flaw. A visible one?!

I fell victim to it.

Anyway, none of this really matters since I don’t carry a balance with Citi.

I just thought it was hilarious that they tried to spin a rate increase as a feature for the consumer.

Posted on October 17th, 2011 at 1:30 pm by Brainy Smurf
Credit Card, Finance, Rants | No Comments »

Musings of a Multi-Thousandaire

How come people use the phrase “quarter of a million dollars” but you pretty much never hear anyone say, “quarter of a hundred thousand?”

Well, that’s how much credit card debt I had just a couple of months ago.

A quarter of $100k.

Yep, I said it.

A few weeks from now, I’ll have pared that down to a 4-figure number.

I’m not there just yet.

I’m just sayin’…

Posted on September 21st, 2011 at 5:43 am by Brainy Smurf
Credit Card, Finance | No Comments »

The Secret of Using (Un-expected) Cash Effectively

For me, it’s to go with my first instinct and to do it quickly.

Right now, my top priority is my credit card debt.

I’ve got a lot of it again and it’s weighing me down.

Anyway, a long overdue invoice came in on Friday.

As it was for something I billed back in October of 2010, I wasn’t really counting on ever receiving payment anymore but since it was a $6k bill, well, I hadn’t forgotton about it either.

My first reaction to seeing the check was, “Wow — I can’t believe they actually paid… FINALLY.”

And then I started to think about how perhaps I’d just sold those I-Bonds for nothing.

But then I thought about how much of a dent I could put in my credit card balances on top of all of the money from the I-bond sell-off.

Holy 5-figures, Batman!

But I did nothing.

Instead, I sat around and waited for Hurricane Irene to arrive… and started to think about all to cool stuff I could afford to buy…

And just as I was about to buy something stupid online this afternoon, I kicked it into reverse and instead scheduled a $6000 credit card payment for tomorrow.

Woo-hoo!

Posted on August 28th, 2011 at 2:24 pm by Brainy Smurf
Credit Card, Finance, Success | 1 Comment »

401k Contributions Halted

It only took an entire year but, finally, this afternoon, I submitted the paperwork to stop contributing to my 401k.

No, no, it’s not due to the recent ups-and-downs on the market and any sort of economic uncertainly.

And I know that I’m not following my own advice by making this move.

But you know what?

I’ve got more credit card debt than I’m comfortable with and I’ve been dancing around that fact for too long.

Fourteen months ago it was a zero balance. Since then, I’d been tap dancing around $25k — and now the finance charges are starting to kick in.

My first manoeuvre was to sell the I-Bonds.

Hitting the pause button on the 401k is the second.

My debts will most certainly fall now.

They’d better.

Posted on August 25th, 2011 at 8:34 pm by Brainy Smurf
401k, Credit Card, Finance, Motivation | 3 Comments »

Buried Alive: Money Hoarding

Coming this Fall on the PIAC network…

So I suppose having hoarding tendancies could be considered a good thing when money is one of the things you hoard.

As my finances clearly show, my “condition” isn’t too bad. If I were totally insane, I’d be swimming in cash like Scrooge McDuck.

But I do have some “investments” that aren’t really performing (and never will) that I’m reluctant to let go of — even when I fully understand the money could (and should) be more wisely used elsewhere.

I’m taking about the I-Bonds.

Sure, my bonds are earning over 4% right now — a lot more than most — but I don’t own enough of them for that high earnings rate to amount to much of anything.

On the flip side, though, I’m carrying almost $25k in credit card debt. And as of last month, nearly half of it is at what I’d consider an obscene interest rate.

One could fund the other.

A few weeks ago, I took a baby step and sold off around $1200 of the bonds to help pay for the auto repairs and a family vacation that we took.

It felt…okay, I guess.

I’m kinda sad cause I really wanted to hit the $10k mark for some reason and now that seems a bit out of reach.

But it’s time to cut the cord.

Frankly, I was never terribly fond of the TreasuryDirect website with its early 1990′s interface and ridiculous login procedure.

There gone.

I’m sellin’ ‘em.

Okay, most of ‘em.

(You can’t expect me to part with *all* of them so suddenly!?)

Posted on August 21st, 2011 at 2:26 pm by Brainy Smurf
Credit Card, Finance, I-Bonds | 2 Comments »

Holding Steady at $28k in the Hole

So it’s now been a year since we re-financed our mortgage.

On one hand, that move gave us great financial, well, not freedom, really, but…flexibilty, I guess.

I mean, suddenly having a sub $500 mortgage payment when you’ve grown accustomed to a $1500 mortgage payment for years on end should be lifestyle altering…

And it was…

But it feels like we’ve gone the wrong direction.

Back then, we were debt free and living pretty comfortably — a tiny mortgage payment was really just icing on the cake.

The good kind of icing where you can’t feel the sugar crystals in your teeth. I recommend Betty Crocker.

One year later, though, we’re $28k deep in credit card debt and our mortage balance $4k higher than it was.

That’s not progress…

Déjà vu?

Money’s not tight, like, “Oh crap, how are we going to pay the water bill,” but it’s not growing off of trees like it probably should be.

Still, though, while the re-fi may have sparked the tailspin of the last year, I’m still convinced that it was the right move.

I just lost my way shortly thereafter…

I stopped paying down the mortgage like a maniac.

That was a good move, actually, but it also kinda gave me that stuck-in-the-mud type of feeling. The balance isn’t falling — and how could it with $500 monthly payments?

Financially speaking, it’s unwise to overpay it. Mentally, though, I really miss seeing the balance drop each month. For a few months there, I was knocking it down over a thousand bucks per month and it felt great.

Really, though, the big mover and shaker of the past year was the major renovation that we had done last year.

I don’t regret it — it HAD to be done and it’s made our house a safer and more comfortable place to live.

At the same time, I really thought we’d have it paid for in full by now.

And we should.

I just didn’t stick to my re-payment schedule.

And I kept spending. An expensive trip last summer and the new car purchase just a few months ago were crippling, just crippling, and we haven’t recovered.

Making matters worse, in another month or so, Henrik will be joining Duncan in daycare.

Wanna talk about a budget buster?

More on that later…

Posted on May 14th, 2011 at 1:32 pm by Brainy Smurf
Credit Card, Finance, Mistakes, Mortgage | 3 Comments »

Okay, so about that 4-week goal…

Not gonna happen.

I know, I know… It’s pathetic to be giving up on it after just one week but the goal of spending less than $1500 for the entire month isn’t possible anymore.

A couple of annual business expenses that I’d totally forgotten about happen to come due in February.

Further, I just received a bill for roughly $200 from the dentist for a cleaning that I had done in January. Remind me to say “No” to the x-rays next time…

We dropped our dental insurance last year as we we’d been paying out more in premiums for years than our bills would have cost if we’d paid out of pocket.

It’s times like these where it feels like a bad decision but, mathematically, it was sound.

I only wish we could do the same for our medical insurance but that’s a whole other issue…

Combined — plus the routine monthly utility and mortgage expenses — well, I’m going to exceed the $1500 ceiling in no time so here’s the new goal…

It’s actually a tangent of the original goal — I’d wanted to spent less than $1500 so I could pay down my credit card debt at a more robust pace. Well, the new goal is to have one of the remaining credit card balances paid off by month’s end.

That exceeds the original goal and, yeah, I might need to “borrow” a bit from savings to do it but it’ll be the right move in the long run.

Just like dropping our dental insurance was…

Posted on February 8th, 2011 at 10:15 am by Brainy Smurf
2011 Goals, Credit Card, Insurance | 1 Comment »

So, About that Credit Card Repayment Chart…

Late last week, I mentioned that I was back in the red…and that I was going to get going on doing something about it.

Well, I’ve started.

I dug into the PIAC archives to dig up the progress chart that I used the last time I was in debt and quickly realized that it kinda sucked.

Sure, it got the job done but this time I think I’m going to take a different approach.

Back then, it was more of a schedule than anything else where I had it all planned out from day one right to the last penny owed.

This time, I’m going to make it more of a journal rather than a schedule. I plan on trying to pay back $2900 per month towards debt.

Lofty goal — and one that I’m not certain I can consistantly make — but if I do manage, well, I’ll be debt free again by the end of the year.

Here’s the chart (which you may want to enlarge):

Simply put, I’ve got three cards carrying balances right now.

The Capital One account, which is actually my wife’s, is the 0% offer that we used to partially finance the renovation. The offer expires in April and we’re a bit behind in our original plan to pay it off before paying any finance charges.

The Chase account is another 0% percent offer that I took advantage of just last month. That offer expires in October of 2011.

The last account is my Bank of America Business account. This is the card that I use to make all of my business related purchases — and will continue to use. Once I get it back down to a zero balance, I shouldn’t have any trouble keeping it there on a month-to-month basis.

For the time being, I’m not pre-populating finance charges (they’ll be entered manually along the way) and I’m not even attempting to calculate minimum payments ahead of time either. In the end, they’re pocket change when compared to everything else…

If all goes as I hope, I’ll be debt free in October. I don’t expect it to work out quite that well but that’s why I’ve given myself a two-month cushion.

Now, eager to get started, I’ve just gotta wait until I get paid later this week to start seeing a dent in the numbers…

Posted on January 11th, 2011 at 1:50 pm by Brainy Smurf
2011 Goals, Credit Card, Finance | 1 Comment »

Debt Repayment: Round 2

Go hard or go home.

In high school, the football locker room had that painted on the the wall just above the door in huge royal blue letters.

The track team, of which I was a member, used the same locker room in the Spring (though we still called it the football locker room).

We always thought the saying was a little goofy as every one of us distance runners would have much preferred to “go home” over running 5-10 miles after school, you know, “for fun”.

Must be a football thing…

Anyway, I know it’s supposed to be a big motivational thing so I’m gonna use it here as one of those sports cliches — except for paying down debt.

Back in my “in the red” days, I was somehow able to scrounge together roughly $2000 per month to put towards debt repayment. Even during my anti-PMI campaign, I was tossing nearly $1000 extra towards my mortage each month too.

Yeah, I went big.

And it paid off.

Balances fell faster than I’d ever thought possible and I managed to stick with it (or stay motivated) long enough to get myself in the black.

How’d I do it?

Not sure.

I’m still in awe of how much money I was able to come up with during that time to pay down the debt.

I do know, though, how I was able to stay on track.

I had a HUGE chart that I updated each and every day to keep on top of my progress. Keeping such close track (and not wanting to wait months to make updates) lead me to start making weekly payments on things. Weekly payments led to balances falling rapidly. Rapidly falling balances led to more updates needed on the chart.

Dare I say it, It was almost fun to keep track of my debt reduction since there were so many opportunities to make updates.

Well, I’m back in the red again — and without much of a game plan — so guess what I’m doing?

Yep, resurrecting “the chart”.

I’m still trying to find the old beast in my archives so I can copy it exactly — and then improve on it — but I plan to get it back up and running and to get the carefully orchestrated weekly payments started up before the end of the weekend.

I’m shootin’ for $2500 payments per month in 2011… Even with another smurfling on the way in April, I think I can be in the black by December.

We’ll see…

This’ll be my financial goal for 2011.

Posted on January 7th, 2011 at 7:19 pm by Brainy Smurf
2011 Goals, Credit Card, Finance | 3 Comments »

Smart Credit Card Strategies

Years ago I lined myself up quite nicely without even realizing it. Though I only carry one credit card in my wallet these days, I currently have four of them in my arsenal.

That’s not really a unique or powerful spot to find yourself in on its own. Lots of people have 4 or more credit cards…

But when I point out that the cards are all from totally separate banks, well, that’s where it gets interesting.

I have a card from Bank of America, Chase Bank, CitiBank, and Capital One.

None of those companies are affiliated with one another.

Four months ago — all of them had a balance of zero. That situation has changed in the meantime (due mostly to the renovation) but this is where the four un-affiliated accounts come in handy.

You know those 0% offers that you get in the mail on a daily basis? Yep, the ones teasing you with 0% balance transfers?

Well, the fine print on those always mention that you can’t transfer a balance from an affiliated card.

ChaseBank is BancOne. You can’t transfer one to the other. Same deal with MBNA and Bank of America. Chances are, if you have plastic in your wallet, a those names are quite familiar…

Over the past few years, with all of the bank mergers, the landscape has gotten a lot smaller. You might think you have balances with a bunch of different companies but you might, in fact, actually have them all with the same bank without even knowing it.

As a result, your options are severely limited.

The way I’ve got it set-up now, well, two cards have a balance and the other two do not. When a sweet offer comes around (or if a 0% offer is coming to a close), I’ve still got two routes to choose from.

Really, since I’ve maintained a stellar credit rating, I can probably ride the 0% offers back-and-forth indefinitely (as long as I maintain a $0 balance on two of the cards at all times)…

True, I’ll still get hit with the 3% transaction fee each time I make a transfer but with the balances I’ve been tossing around over the past couple of months, well, they “pay” for themselves in a matter of weeks.

Basically, you might want to check your wallet and see if you’ve got avenues to take should you need them.

If not, you might want to consider applying for that credit card you’ll likely never use, you know, just in case…

Posted on December 16th, 2010 at 7:48 pm by Brainy Smurf
Credit Card, Finance | 2 Comments »

Debt Repayment: After Two Years, I’m Back at It

From a pseudo defensive stance, over the past week, I’ve kinda felt the need to, I dunno, further respond to EnoughWealth’s comment regarding my ridonkulous spending last month — specifically the television purchase when, from their point of view, I should have just saved up for it.

In theory, they’re right.

Obviously that’s the case.

In reality, we’d been without a living room for 6 months during the renovation. Now, the room was complete and it was time to furnish it.

In the past, I’m sure you’ve all pieced together decorations for a room one-by-one but I think everyone can admit that taking that route, regardless of your personal taste, well, it usually ends up looking disjointed and cluttered.

Here we were with a brand new living space, completely empty, with an opportunity to do it right.

All at once.

And we did.

Could we have waited? Not really.

Have you ever gone 6+ months without sitting down on a couch to watch a little television after dinner?

We just did.

And we’d had enough.

But this isn’t really about a television or a couch or even a renovation — it’s about the money.

Did we take on some debt during this extreme makeover and subsequent redecorating?

Yep, we sure did.

But we can pay for it too…

Right now the total damage is around $24k worth of debt which we financed using credit cards — $17k of which is at a 0% interest rate.

My repayment/savings plan is currenty set to $570 per week -or- an average of $2470 per month.

It’s all on auto-pilot too utilizing weekly auto-transfers from my checking account. I’m not in a position to easily “skip” a payment here or there…

Further, the plan is actually conservative.

I could do more.

I probably will do more.

I guess my defense is that I know what I’m doing.

I’ve been in deeper debt before and I got out of it.

Best of all — my expenses are far lower than the last time I had to do this *and* the things that got me into debt were totally worth it.

Big difference.

I’ll be debt free again by mid-2011.

Mark my words.

Posted on November 16th, 2010 at 9:32 pm by Brainy Smurf
Credit Card, Finance, Motivation | 3 Comments »