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Our Credit Card Debt

September 16th, 2022 at 03:52 pm

I am finally ready to share our debt numbers… and it’s scary! (Both the amount and putting our real numbers out there for people to see.) In April of this year, our credit card debt reached a total of $24,905.68, which was $1105.68 OVER our spending limit at the time. Amazingly, we weren’t charged any fees for being over our limit, other than our monthly interest. However, our interest rate has increased literally every month since then, so that’s how they are getting their extra money. We went from 14.99% interest to 15.49%, then to 16.24% to our current interest rate of 16.99%.

Our credit card “very graciously” saw that we were getting in over our heads, so instead of suspending our credit card (which was over the limit) or denying transactions, they increased our limit by $5000! We now have a credit limit of (ridiculously!) almost $30,000! It took us a long time to wake up, but I think we finally did! We still have a TON of credit card debt, but we are working on it.

Currently, our credit card debt stands at, $19,943.47. Still way too high, but less than it was.

We have not been able to pay off quite as much as we would like for a couple reasons. First, like I talked about in a previous post, we were given a truck that cost several thousand dollars to get running. (But was still less than the price of a used car!) We paid cash for all of the repairs. Secondly, our dog had an unexpected vet bill. He is 12 and we have been very lucky that he hasn’t been very expensive, but last month he cost us $1000. We were able to pay cash for that too. We also took a long weekend away as a family to Pismo Beach. We hadn’t done that in years and because we paid for that in cash, I consider it money well spent; but I’m trying to be honest in saying why we didn’t pay off as much as we would have liked.

Most importantly, we haven’t added to our debt, and in fact, have made a little headway. As of our September 2022 credit card statement, we have paid off $4962.21, which amounts to 19.9% of our total credit card debt. Honestly, could be better, could be worse.

Going forward, I am hoping to be able to payoff around $800 per month, after interest. At that rate, we will still be in debt for almost 2 more years. Again, it’s longer than I would want, but I think an $800 decrease per month is realistic. I don’t want to set unrealistic goals because then I will just be depressed and discouraged when I missed them.

We don't have any student loan debt or car loans. We have a mortgage and small solar loan in additional debt.  I am really focusing on our credit card debt as that is what is weighing us down.

As I said in my last post, I am expecting a lump sum payment this year equal to 6.5% of my salary. I haven’t yet decided what I’m going to do with it, but looking at these numbers, it is mighty tempting to send it all to debt and just live with one month of expenses in my emergency fund and to work on building it back up, slowly. But I don’t have the money yet so I don’t really have any decisions to make, yet.

2 Responses to “Our Credit Card Debt”

  1. Lots of ideas Says:

    I don’t know what your credit score is, or whether you have the discipline to manage this, but there are a few ways you can play the credit card game to your advantage.
    1. Find a card with a zero % balance and transfer as much of your debt as you can pay off in the number of months you have to pay it off.
    2. Find a card with a cash bonus for opening it - these usually have a requirement to charge a certain amount within a few months. Use that card for things you would pay for anyway - insurance, cable, cell phone. Pay in full every month. These often gave cash balance rewards too. You and your husband might be able to do this a couple times a year. It is some work, but it is tax free money, so the return on the time you invest is pretty high.

    This cannot work if you use the cards in any other way, so think about this carefully before you try it.

  2. rob62521 Says:

    I'm glad you had the cash to pay for many of the items you mentioned...truck, vet, vacation. That's good.

    Good for you to plan on paying it off. You didn't get into debt overnight, so it isn't realistic to think you'll get out of debt super quick either. I agree, being realistic is for the best so you don't get discouraged and give up.

    Besides the big expected payment, perhaps there are ways to cut back in small ways that you can either throw at the debt in addition to your planned repayment, or sock it away for the emergency fund. Years and years ago I would save a bit here and there and when I got around $5 or $10, I would put it in a savings account. It wasn't much as it went along, but it added up. When I needed some cash for something unexpected, it was nice having that money that didn't hurt to save since it was just a little dib and dab here and there.

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