Those who have been following this blog know that a few weeks ago I began looking for a card that offered a year of 0% interest on balance transfers. I applied for two cards and was rejected both times. I did finally get the offer I wanted from I card I already owned and moved the balances.
Today, I received a letter from one of the banks that rejected my application and it stated that I was turned down because I “have sufficient balances on (my) revolving credit lines and have sufficient debt relative to (my) income”.
I guess they don’t think I need any more available credit even though most of it is paid off. I know I have too many accounts and have decided to close some of them.
Today I decided I wanted to close two accounts. I’m not too concerned about my FICO score, but I’d rather have a good credit score than a bad one. With this is mind, I decided I don’t want to cancel my old cards that show my length of credit history and I don’t want to cancel the accounts that still have high credit limits so my debt to credit ratio will still look good.
The first to go was a credit card to Lowes. It is the newest account I have. I got it right about the time I finally decided to quit using credit cards, so it has never been used. It also has the lowest credit limit of all my accounts.
The second card is a Visa and it has the second lowest credit limit.
Before I called, I expected to be on hold for a long time and then I expected to have to explain why I wanted to cancel the accounts. I was sure they would try to persuade me to stay. When I made the call to Lowes, I didn’t even talk to a person. The automated phone system has “Close Account” as one of the options. It just asks you if you are sure you want to close the account. When I said “yes” it asked if I wanted to receive a letter stating the account was closed. I again responded with a “yes”. It’s always good to have things in writing.
When I called the bank that provides the Visa card, the man on the phone did ask why I was closing the account. I just said I had no plans to use it any more and he said “I can understand that” and told me they would be sending me a letter stating the account was closed.
I had them both closed within five minutes and I was then on my way to my shredder with cards in hand.
I clicked over to Blogging Away Debt and read that there is a free download of Jean Chatzky’s Book titled, The Difference. It’s only for a limited time Friday and Saturday on the Oprah.Com website.
On Blogging Away Debt, Tricia writes that what she has read about the book reminds her of the book The Millionaire Next Door.
That caught my attention, because I just recently went to the public library and got a library card. I went to the section with all the financial books and since the Dave Ramsey book was checked out, I got Pay It Down! by Jean Chatzky. I read that book in about two days and went back to the library. What did I get this time? You probably guessed it: The Millionaire Next Door by Thomas J. Stanley, Ph.D. and William D. Danko, Ph.D.
I am two-thirds of the way through reading that one. I guess the downloaded book will be next on my reading list.
It’s March 12th and, other than my wife’s cell phone bill, all our bills for March have been paid. I get paid tomorrow and there isn’t anything that *MUST* be paid in the next week. It’s been a long time since I could say that!
I’ve already submitted a payment for the first bill due in April, but the rest of my check I intend to save for now, since we are taking a short trip out of town to visit our oldest daughter in a few weeks. In years past, those drives to the next state usually involved gas and a hotel room put on a credit card. All gas and food bought on this trip will be paid in cash. My daughter has moved into a house with a guest room, so we don’t need a hotel now.
Other financial updates:
- I did one more balance transfer to move more debt to the 12 month 0% interest offer I received to further reduce the amount of interest we pay per month.
- The transfers have altered the way our debt snowball looks, so I will be rearranging the order the debts will be paid soon.
- Yesterday, I made a spreadsheet to try to predict when each bill would be paid off. If my math is correct, all my debts other than my wife’s car will be paid off, by January 2011. The car could be paid off by June 2011. This is all based on the amounts I’m paying now. If I can earn more or cut other expenses, this could all be accelerated. When I first made my debt chart at the No Credit Needed Network, I listed December 2011 as my goal to get this debt paid off. I’m now going to challenge myself to get it done by December 2010, which is 6 months less than what my spreadsheet calculated.
(This was a story emailed in by a reader of the blog. He has elected to remain anonymous.)
One of my worst money handling mistakes involves my tax refund. I’ve always liked getting a big refund, so at work, I claim on my W4 that I am single with no dependents, so they take a lot of taxes out each week. When it’s time to file, I then claim married with 4 dependents and get about $5000 back. It’s always fun when we get that check, but we always blow it fast and then it’s back to trying to find the money to pay all the bills each month.
You wouldn’t believe how many years I did this before I caught on. I was struggling to pay my bills, fighting with my wife about money, and missed several mortgage payments. My wife even skipped paying our homeowners association dues for the neighborhood we live in that they went to court and garnished my wages!
Someone finally pointed out to me that I could have an extra $400 a month if I’d just claim the right amount of dependents on my paycheck each week. I didn’t get that huge tax refund this year, but at least it’s easier to make the mortgage payment now.
Do you have a tale about your debt that you’d like to share with the readers of this blog? You can email it to: thedebtside@gmail.com. You can remain anonymous as I won’t include your email address or your whole name (you can choose an alias if you’d like) in the blog.
Something I have never mentioned on this blog that I might as well write about is the $25000 loan I took out of my 401k almost two years ago.
I consider it one of my dumbest moves ever! Maybe I did need the money at the time, but it didn’t do me any good, because:
- I can’t even remember exactly what debts I paid off with the money.
- I didn’t learn my lesson because I ran up my debt again.
- My 401k requires I pay myself back with interest, so $150 of my paycheck goes to pay that money back every week. That’s $600 a month! I could be making some serious payments on my debt snowball if I had that extra money every week!
If there’s any silver lining to this it is the fact that I have gotten accustomed to my check not having that $150 in it. By the time I have the 401k loan paid off, I hope to be debt-free (or very close), so I should be able to continue contributing that much or more into the 401k each week. If the stock market rebounds one of these days, maybe my retirement account can make up for lost time and I’ll be able to retire with a decent nest egg.
Do you have a tale about your debt that you’d like to share with the readers of this blog? You can email it to: thedebtside@gmail.com. You can remain anonymous as I won’t include your email address or your whole name (you can choose an alias if you’d like) in the blog.
- I started another spreadsheet to track my electricity usage. My electric company had the last three years worth of bills on their web site, so I was able to compile a lot of past data to compare our current (no pun intended) usage against. I just recently installed a programmable thermostat and my February bill was $100 less than my February bill was in 2008 and $109 less than the three-year average bill for February! Is it a coincidence or is this thermostat going to save me a bundle? I can’t wait to see what the March bill looks like to find out. Wait a minute, I used to dread the bills coming. What’s happening to me?
- We paid off another credit card on our debt snowball. It wasn’t the top item, but the balance was small enough that my wife decided to pay it off when she got paid. We aren’t following the debt snowball approach exactly as it’s written, but we are making progress and that’s all that matters to me.
- The item at the top of my debt snowball is our Care Credit card we opened when our daughter got braces on her teeth. The balance is $1000 and I have enough money in the bank to pay it off right now. As long as it is paid by July we won’t be charged any interest. I’ve been real tempted to pay it off now, but something is telling me it might be better to leave the $1000 in the bank (making our emergency fund $2000) in case an emergency comes up. Then again, I’m afraid we may spend it on a non-emergency and then it’ll be a struggle to pay it off in time.
