As part of the “12 Days of Christmas, PF Blogging Style,” I have today, Day Three. Hum a few warm-up notes and sing along with me:
“And on the third day of Christmas, I gave to hubby, THREE PAID CARDS!”
Yup, we have paid off all three credit cards we had. The accounts are down to zero, and will not be resurrected if you ask me. So, how did I do it?
The absolute best tool for paying off the credit cards is getting on an accurate working budget! Writing down our income and expenses proved to me that we made enough money to pay all our bills (which I didn’t think it could) and that I had been wasting money on who-knows-what. Once I had the written budget (I put my budget on a dry erase board next to my desk) I could allocate money to get rid of debt!
It helps that I got onto the Dave Ramsey program almost a year ago, right after Christmas of 2006. The credit cards were numbers three, four, and five on our debt snowball list, so I had to finish off the last of my car note and a small personal line-of-credit at my credit union before I got to them. I took care of those in January and the first week of February, then rolled up my sleeves and set to work on the credit cards.
The first one, Chase MasterCard was very easy to kill off: it died by “the sword of the income tax return.” Chase honestly never knew what hit them, it was over so quick.
The second one, American Express Blue Card, DID know what was happening to them. It took me from March to June to kill them off, and they went kicking and screaming the whole time. American Express has two little nasty habits that make me want to NEVER do business with them again: the first was moving the due date around. For most of the time we had that card, the due date was the 22nd of the month. When I sent them a larger than normal payment in March, they upped my due date to the 20th, even though it was not a weekend if I remember correctly. For April they bumped the due date up to the 18th. As they were moving my due date, they still mailed the statements at the same time, giving me a shorter time to send in my payments.
The other nasty little trick American Express pulled on us was double-cycle billing, which means even after I brought the balance down to zero in May, it rose again like a zombie from one of the “Living Dead” movies in June. When I asked them why, they said it was in the fine print that we were on double-cycle billing, which means they were charging us for interest from the month I had already paid!
By the time we got to the last credit card, an AAFES Star Card (military store credit card), I discovered the genius of Dave Ramsey’s snowball method: we had a lot of extra money in the month! So after talking to hubby and extracting a promise from him to not use the cards again (he was still not sold on the Dave Ramsey plan yet) I simply wrote out a check for the entire balance due. WOW that still feels good to this day. It was “only” about $778 at that point .. but I just paid it. Boom, just like that. (Can y’all tell I am still loving that?) That was July 2nd, right before I started my blog :) and what a way to celebrate Independence Day for me.
So here it is, almost Christmas time and almost a full year of debt reduction. Y’all can see by my little chart in the sidebar I have been making progress on our last debt, hubby’s truck note. We can’t be debt free for Christams, but we are credit card free! And just yesterday, hubby was telling me how happy he is that I got onto a good sound financial plan, and how easy life is without all that debt hanging over our heads. Last week his First Sergeant offered him permissive TDY, which is basically free leave, and he was able to take it and drive to Florida last night to see his family…because we have extra money in our budget. We have that extra money because we have broken loose of the chains of credit card debt (and most other debt by now). Can y’all imagine how much easier our financial life will be once we finish paying off the truck note and have no debt other than our mortgage?? Hubby and I can, and it looks GOOD!
Give it a try yourselves: make the budget, live by the budget, pay off those pesky credit cards…and next year YOU will be singing this song with us. And here’s the first two days of Christmas in this series (i’ll wrap it up next week with a link to all of them):
- 1st Day of Christmas: The Best Way to Manage Money by Lynnae at Being Frugal.net.
- 2nd Day of Christmas: Two Guaranteed Ways to Financial Freedom at Credit Withdrawal.
- Tomorrow, Day 4 is over at Plonkee Money!