Credit Card Ban: 6-Month Check-In

woman usgin calculator to manage expenses become debt free
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Talking about money is uncomfortable. Money is a taboo subject, but also, a personal endeavor that one is just supposed to figure out on their own, which I find to be counterproductive. I want to talk about money because at the very least I can figure out a path for financial security that works for me and remove the stigma around money related topics. I’m taking my money management to the internet because there’s no better way to be held accountable. (See here, here, and here.)

The Reality

In January, I took a very hard look at my spending habits and account balance on my credit card, which was drifting close to $10,000. I resolved to spend within my means and only make purchases with my debit card so not another penny would be on my credit card. Looking back through my account statements of the same time period January through April 2017, I attempted a similar no-spending rule, but I see that my will caved in May. The floodgates opened: I purchased shoes, books, and clothes that in reality I didn’t really need. It was pretty much a spending free for all in the remaining months of 2017.

Image result for credit card debt

In 2010, I opened the card with a credit limit of $1,000 to buy books for college. After I graduated two years later and moved to New York for grad school, my credit limit steadily increased, and my purchases steadily increased with it to keep up with the cost of living in the city. In 2013, I moved into my own apartment and bought all new furniture from IKEA. In 2014, I moved again, but this time into a smaller space AND I had to pay for a new tooth ($1,615, plus follow-ups not covered by insurance). Spending continued unchecked in 2016, I bought ComicCon tickets (as a gift for my BF) in May before moving in August (which has it’s own spending problems–need furniture and other things to fill the house!). My spending habits over the duration of the account being open are all over the place and I’ve never attempted paying down seriously, especially at times when I truly could have made better financial choices.

The Strategy

Now I’m trying to get a grip on what I prioritize in terms of spending and getting into my own head to find out what makes me want to spend. There are two things helping me pay down this card:

1. I got a raise at the end of March.

This is the highest amount of money I have ever made. My decision making for what goes on the card is changed because I know I can pay for things with my debit card and I look much more carefully at what I am spending if I only use my debit card. This has also helped me save more and put more money each month toward paying down my balance. As of this 6-month check-in, I’ve only paid down $1,000 of my balance (even though I’ve paid over $1,600, thanks to my ridiculous interest rates). At this rate of no spend/pay down, it will still take me over three years to fully pay off the card.

2. I am constantly looking at my credit card statements and account.

Hyper-monitoring of my account and reviewing where I went wrong in the past is a brain training technique I have been using to counter my I-Want-The-Thing mindset. I’m making daily check-ins to my debit card, credit card, and Acorns accounts. I froze my credit card to prevent spending in January, but apparently I had a recurring charge from domain.com that I was not notified about—or at least, was not notified how the charge was going to be paid—and that charge ended up on my April account statement. My credit card company explained that recurring charges could still be processed on my account even though it was frozen (annoying), but when I called, they offered to stay on the line as they contacted domain.com customer service. I explained that I did want the service, but didn’t want it charged to my credit card. They refunded the money and instead charged it to my Paypal (connected to my debit card). A $17 crisis resolved.

I also updated some of my accounts to delete my saved credit card information, like on Seamless, PayPal, and Amazon. Removing the card from these accounts prevented easy spending on the credit card.

My first test for no spending on my credit card was in April. I needed to travel to Virginia for my mom’s wedding and pay for a U-Haul on our way back. My raise was kicking in, but it didn’t really leave me with enough padding in my checking account. I ended up transferring money from my Acorns account so that I felt secure enough with the charge. The instinct was to just put it all on the card and not worry about it. I had to reassure myself that I did, in fact, have enough to cover the cost of the trip, so I didn’t need to use the card. Planning ahead made a huge difference in how I approached spending in this situation.

The Future

If I’m really thinking big picture, I need to eliminate my credit card debt so I can make a bigger dent in my student loans, which are a much higher debt, but more manageable because the payments are income based.

The rest of the year, I’m anticipating my expenses like removing my wisdom teeth, wedding season, and Christmas related traveling. Look for a check-in in January to see if I kept up with my no-spending resolution.


 

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