Heather Allen

I’m very proud of myself! I went a whole year without using my credit card!! Past me would never believe it!

The Reality

Here’s the deal, last January my bill was the highest it had ever been. My spending in 2017 was unfiltered and my credit limit kept increasing, but I didn’t care about paying it down. So I reached $9,943 on my statement in January 2018. In January 2019, my statement bill is now at $7,935.

Reduced by $2,000!! That’s awesome! If I continue on the no-spend route, I’m on track to pay it down within the next 29 months. When I posted the 6-Month Ban Check-In, this is about where I expected to be in terms of projected end date, but I think after I go on vacation in March, I’ll increase my payment each month so my credit card will be paid off at least in 24 months. This is a three year process. That’s the part I hate so much. I’m making progress, but it is slow.

The Strategy

This year was not without it’s challenges. I did more traveling than I ever have in a single year, especially around Christmas, and I made purchases for future travel this year. Plus, we bought a new bed from IKEA and had to move furniture from Virginia to NY. It was a busy year! Here are some things that helped me avoid using my card:

1. I got a raise and promotion in March, but in addition to this, in October I also received a raise with my annual review. My salary increased 10% over the course of the year. You can read more about my monthly break-down of expenses here.

2. I dipped into my savings and Acorns accounts, but not all at once. I know this is not the advice experts or serious financial people will want you to hear, but I had extra expenses outside of my normal bills so I used saved money to pay for those expenses. For instance, this upcoming trip in March was paid for in September. I used my savings to pay for plane tickets to visit my mom in Seattle. I used my Acorns to pay for holiday gifting, I used my savings to pay for an unexpected veterinary visit on December 31.

But, I did not use the card. I used to use my card as a crutch, but now I don’t rely on it for anything. If I use it, I throw my whole plan out of whack.

The Future

Here’s what I am focusing on in 2019: reducing my interest rate on my card.

I reduced my statement balance by $2k in 2018, but I paid $4,000 toward my balance. Half of my payments are going toward interest!! It’s outrageous and I’m disappointed in past me for getting into this mess. Here’s how my interest rate is applied to my balance:

• Purchases made 4/12/17 and after, an interest rate of 18.49%
• Purchases made between 8/20/10 and 4/11/17, an interest rate of 20.24% (from the time I opened the card to 2017)
• Purchases made during a promo period of 12 months interest free, 20.24% (2016 maybe?)

WTF!

At this point maybe it’s best if I just transfer my balance elsewhere because otherwise how am I supposed to negotiate for a lower rate that 1) either covers all these different periods, or 2) will actually get me to the 0 balance faster! The issue I’m worried about with balance transfer is that it will kill my credit score, which is at a really good place since I’m now utilizing less than 50% of my credit limit, but I’ve actually managed to keep a good credit score throughout my whole financial life so I’m hesitant to mess it up. First I’ll speak with my credit card company, then I’ll look at my options from there.

This process is not easy! I’m in a better place now to understand how best to deal with these sort of issues, and this sort of financial journey takes time.

Thanks for reading!

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