Heather Allen

Thanks for following along on this credit card payoff journey! I’ve previously written about my credit card ban at 6-month and 1-year progress intervals.

The Reality

Since January, I’ve paid $2,550 toward my card. My balance has decreased from $7,935.67 to $6,437.90, a decrease of $1,497.77 in six months. Since starting my credit card ban (18 months ago), my balance has decreased $3,505.87.

At the beginning of the year, I set a goal to myself to call my credit card company and negotiate my interest rate down because this has been my biggest snag in my pay down plan. The reality is that I didn’t call them until LAST WEEK (having to prepare this post was a big motivator). I’m not sure what was keeping me from picking up the phone–mostly anxiety. I tried to prepare as much as possible when I called. However, this call did not go well. The representative said that my interest rate for the balance I already have cannot be changed at all. They instead offered to lower the balance on future purchases. Since I have no plans to make any purchases with this card, it was moot. I had fallen into this trap before and ended up with 3 different interest rates, which is what is killing me now, so this time I was prepared to say no.

This doesn’t have a lot to do with this specific credit card, but to be transparent, I did open another card earlier this year. We got bonus points for spending a certain amount within the opening window. We paid it off right away. I’ve since used it to get points, but have paid the balance in full each month to avoid interest. You might notice that I say “we” a lot here, that’s because this is a joint account with my fiancé. Fortunately, I’ve learned enough about credit cards from this pay-off process to understand how important it is to pay them off ASAP. Having a credit card can be useful if it is used responsibly. I’ve learned that lesson from my current credit card fiasco.

The Strategy

At this 18-month mark, my life has changed a bit. In March I got engaged and opened this second credit card. My priorities are shifting. I knew I needed to ramp up my payments for this card to reach my new financial goals. Starting in April, I began to increase my monthly payment from $300 to $500 a month. Keep in mind that I was always paying above the minimum since I started my credit card ban. This increased payment is challenging because I have to be extra diligent with my monthly budget to make this happen (it is possible because I was able to find $200 extra dollars a month, yikes!). This means that I can’t go out to eat as much and I definitely shop less (except I haven’t exactly followed through on this June was a spendy month for me). For a couple of months, I was able to pay even more because I was working overtime so my extra money was going toward the card. An extra incentive for paying $500 a month is that I will pay down the card ahead of my projected payoff date. In reality, I might not be able to accomplish this because there are some travel plans coming up that might take out of my credit card payment budget. I’m still working out the kinks in my budget, but I’m so ready for this card to be paid off!

The Future

My increased monthly payments put me at a July 2020 payoff date as of this post. That is about 6 to 9 months ahead of the 3-year end date that I had first projected when I started my credit card ban in 2018 (I think it was March 2021, but honestly I can’t remember!).

I’m extra motivated to pay off this card because I can put the money that I have been shoveling toward the card into our wedding savings, so we can actually afford a New York wedding! And knowing that my credit card is paid off before entering into marriage sounds pretty sweet to me.

I think my next option is to either pay this card off ASAP or look into balance transfers. My credit score is my most precious financial asset so balance transfers worry me because I don’t want my credit score to be affected. I’ll do more research on this by my next post. In conclusion, progress is progress. I’ve made a huge dent in my balance since January 2018, but I’ll be forever frustrated with my interest rate.

Thanks for reading! ♥

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