that damned plastic
I noticed a while back that for two consecutive months, I only paid the minimums on my old credit card debt. My original plan was to pay at least twice the minimum - I totally make enough each month to cover at least that much of the balance. I had to take a look at my spending and find out what was going wrong. So why did I wind up coming to the conclusion for two months in a row that the minimum was all that I could afford?
Three words: that damned plastic.
I had to get rid of the crazy interest rates that were keeping me from paying down my debt, so about six months ago, I consolidated my credit card debt, putting the balance on a new line of credit to get a better interest rate. This resulted in zero balances for both of my credit cards and one monthly payment that’s supposed to get me out of the balance after six more years of paying interest. But hold up, I’m not trying to have this mess on me for another six years. The plan is to have it all paid off by August 2008 at the latest. But in order to do that, I have to send in way more than the minimum payments.
Yes, it feels good to have a zero balance on those cards. Yes, it feels good to be able to ring up a balance and then pay it down to zero before interest accrues. But just because I CAN doesn’t mean I SHOULD. Sheesh. You’d think just looking at the amount of money I’m trying to pay off on old credit card debt would make me lock those cards away, but here I was using them again. And the worst part was that I was using them because I wanted stuff that I couldn’t afford using my buffer (see my post of 6/20). I figured, well, I’ll have the money next month to pay it off, so it’s OK to use the card now. What’s even worse is that on some level I knew I was wrong when I was thinking it. Unh, unh, unh.
So now, I have to put my cards back on lock down before I get myself in trouble. The money that I should have been using to pay down the balance on my OLD credit card debt was instead being spent on trying to pay off NEW credit card debt before interest accrued. The horror! I am so ashamed… This is how come other people get consolidations and wind up in worse debt than they tried to claw themselves out from in the first place, and I promised that I wasn’t going to do that to myself or my future family. If I were to keep doing this, it would take me SIX WHOLE YEARS just to get out of the old credit card debt, let alone my other debts. No thanks!
Well, the good news is I’m nipping that mess in the bud. I already know how to get by without using credit cards - I’ve done it for years before now to keep from maxing out. I can do it again. This month I paid more than the minimum. And next month, I’m instituting a new method. My very own personal mandatory monthly minimum, withdrawn automatically from my account without any further effort on my part. Thanks, Single Ma! (It’s more than twice the required monthly minimum, and I won’t even feel the difference in cash flow, cause it’s made up of tax and insurance premium savings.
