What about personal accountability?

I am constantly amazed by the stories of people who get themselves into incredible amounts of debt but blame the credit card companies for making it too easy. That is like blaming McDonald's because you are overweight.

There is an article in today's USA Today that demonstrates my point. Yes, people were granted more credit but just like the 400 lb man driving past the fast food restaurant...he doesn't have to stop and eat.

See the excerpt below.

"Kenna and Richard Baker of Des Moines say that as their home's value rose, they were barraged with offers for home equity loans and credit cards. They opened up new credit cards.
They also refinanced their mortgage twice and withdrew cash to pay off existing card bills and make home improvements.
But as the economy weakened and Richard's pay as a delivery driver fell, they used their cards again for necessities. "We had to pay the gas bill on cards one month or we'd get cut off," says Kenna Baker, 44.
Today, the Bakers owe $30,000 on credit cards and $105,000 on a home worth only $63,000. They blame themselves but also say lenders share responsibility for "making it so easy" to borrow."

Free at Last!!!

Today I paid off the last $373 owed on my Citibank Mastercard. I am officially free of credit card debt. I still use my Skymiles Platinum American Express for everyday purchases so I can earn miles toward free flights but that card is paid off every month.

I am wondering what portion of credit card users pay off their balances in full each month? I have had my Citibank card since 1990 and this is the first time in 18 years that I have not had a balance on either my Citibank or some other credit card. Wow!

My next debt goal is to pay off my car loan with my next year's tax refund. Once I pay off my car loan in 9 or 10 months it will free up an additional $510 per month that I can put towards my savings goals.

Credit Card Debt Update

I was able to pay down the entire Discover card balance earlier this month with my federal tax refund so all I have left of credit card debt is $1,268 of Citibank. In a few days I will pay down an additional $500 on Citibank. I am not feeling quite as joyous at being almost debt free as I thought I would but it does feel good.

One from American Express vs. Delta Skymiles Platinum

I am considering switching my Delta Skymiles Platinum card for the One card from American Express.  My current card earns miles on Delta and I have earned enough miles from my spending to purchase several plane tickets.  I also get a free companion certificate each year when I renew it.  There is a $135 membership fee but again the companion certificate which was worth a $400 ticket last year along with the thousands of miles I earn make the card  worth the $135 fee.

The One card has a deal where 1% of your spending to be deposited in a savings account along with a $50 bonus the first time you use the card.  I spend between $20,000 and $25,000 a year on my American Express so that would earn me at least $250 this year including the $50 bonus.  The annual fee for this card is $35 but it is waived in year one. 

The interest rates are irrelevant because I pay the balance off every month.  Now that I see the pros of each card in black and white in front of me...it makes more sense to stay with my platinum skymiles card.  There are also benefits with the platinum card that I would not get with the other such as doubling the warranty periods for items bought with the card, etc.

What do you think?

Balance Transfer Offers

I am amazed at how many balance transfer offers I get in the mail. I feel lucky because my mailbox locks. I feel sorry for people who have an unlocked mailbox. Anyone could steal them right from the mailbox and go to town screwing up their credit!

Most of the credit card companies have wised up and now charge a balance transfer fee which can be up to 3% of the entire amount transferred. When I transferred my balance to Discover last year at 0% they offered the transfers for a fee of $29 each. I made transfers from 3 different cards so it cost me $87 total. Since then I have received $80 in rebates which helps to offset the transfer fees and the small amount of interest I have paid on purchases in that time.

Federal tax refund

Imagine my surprise when I logged in to my online bank account as saw that my federal tax refund had been deposited.  I filed my taxes two weeks ago.  I promptly paid off my 0% balance Discover card.  Now my only credit card debt is $1,280 on a 0% balance transfer.  That will get paid off this month.  What a relief to be freeing myself of credit card debt.  

MySurvey.com income

I received my first $10 check from mysurvey.com the other day. This will go into my savings account. I am scheduled to receive another $10 check in a couple of weeks. Nothing like a little easy money and ten bucks is ten bucks!

I also earned $40 in rebates on my Discover card. This quarter they have a promotion whereby you can earn 5% cash rebates on hotel charges (up to $800 in charges, I believe). I was able to charge a hotel that I stayed in for work on to my Discover card and earned $35 in rebates. Now that was really an easy $35. I also had some residual cash rebates in my account so I was able to apply $40 towards my balance. Discover will only let you apply or redeem rebates in multiples of $20.

A tax refund already!!!

This morning when I went online to check my bank account I saw that my state income tax refund of $1,215 had posted to my account. Hooray!

I promptly went online and made a $1,215 payment on the cash advance from my Citibank credit card. I double checked the status of my federal refund and the IRS website stated that I should receive it by February 12, 2008. That is pretty quick as I filed both my federal and state taxes less than one week ago. I am hoping to completely pay off the 0% balance on my Discover card and most of the remaining balance on my Citibank card this month.

For the first time since I can remember, I will have NO credit card debt and a little cushion in the bank.

My escrow refund arrived!

Hooray! Today the mailman brought me my $1,592.18 escrow refund check. I am going to use it to pay down the cash advance on my credit card. My new escrow payment is about $85 less than it was before the last escrow analysis. I plan to save the difference in my emergency fund.

It is going to be such a relief to get my credit card debts paid off! I think I will e completely credit card debt free , with the exception of the monthly charges on my Amex that I pay off monthly, by mid-March. Wow! Less than two months away. Ever since I got my very first credit card in 1990, I have had a balance that I could not pay off. Finally, after 18 years I will be free!

I just filed my taxes electronically

This morning I was able to complete my federal and state income taxes in TaxCut and got them filed. I am expecting a $5,366 refund from my federal return and $1,215 from my state return. With all of the issues surrounding the AMT rules and how that may delay refunds I am curious how quickly I will see the money. I have every bit of it earmarked to pay off debt.

In trying to get to my Delta $25,000 threshold I spent more than normal in December and now the bill is coming due. In order to avoid the double billing interest hit that I would pay with Amex because I didn't pay off my full balance I took did a balance transfer from my Citibank MC. It cost me $75 but I figured that it was less than 2 months of interest on a high Amex balance. I will pay off my full Discover card balance and most of my Citibank balance by the end of February. I will still owe $845 on Citibank but I think I will be able to pay that off in March.

On another note I will be getting a refund of about $1,200 because I am having to cancel the vacation that I had already paid for due to personal reasons. I am still out the airfare but I can use my ticket for another trip less the $50 change fee. I am completely out of the other person's ticket. I may take that money and buy a new Apple laptop. I am not sure yet.

Delta Skymiles Medallion Bonus

I realized yesterday that I was about $2,000 shy of earning the 10,000 Skymiles bonus for spending $25,000 on my American Express card in 2007. I put almost everything I can on the card and pay it off every month. Like the commercials say…double skymiles for groceries, gasoline, drug stores, etc. I made a strategic decision to accelerate my final cruise payment which was not due until February 1, 2008 for my April cruise and to also go ahead and buy the plane tickets. That leaves me just $437 shy of the spending threshold. For those of you not familiar with the Delta Skymiles program, Medallion miles help you earn silver, gold, or platinum status. Usually the only way to earn Medallion miles is to fly with a few exceptions and one of them being the $25,000 per year spent on a Delta Skymiles Amex card. I earned the 10,000 for 2006 but in retrospect I only got to silver status as I am less than 5,000 miles frm the coveted gold status which would allow me to use the shorter security line. Anyway I am currently trying to think of anything that I know that I would spend money on anyway so I can spend it before December 31st. I don’t want to spend money just to spend it. That is not the point. I don’t want to waste money and go into debt for things I don’t need. I know that I am going to purchase tax software for about $60, groceries for $60, a heating pad for $35. I know this just sounds crazy but the Medallion miles are valuable.

$25 in found money!

I received a notice in the mail yesterday about a lawsuit that alleges that Visa, Mastercard, and Diners Club credit cards conspired to set and conceal their fees for making foreign currency transactions between February 1, 1996 and November 8, 2006. At first I almost threw it away because I was thinking that I was not eligible for the minimum $25 settlement, but then I remember that I did travel out of the country during that time period and use a credit card. I submitted my claim online. The deadline is May 30, 2008 so I probably won’t see the money before then. I will keep my fingers crossed.

Discover Card at 0%

Early this morning I awoke in a panic worried that I had not made two transactions on my 0% balance on my Discover card this billing cycle. UGH!!! Fortunately, I still have more than a week to make the transactions otherwise I will lose my 0% interest rate. The rate was the only reason I applied for the card. I have had it since late January 2007 and have saved a lot of money in interest with it. I have also earned a $20 rebate which I promptly put towards my balance. I have been able to pay off approximately 25% of my original balance in part to not having to pay any interest on the balance. I will need to stay on top of the two transactions per month stipulation though. I plan to pay this card off with my federal tax return early next year and that will be the end of my 17 plus years of continuing credit card debt. It is strange to think that ever since I got my first credit card 17 years ago I have always carried some type of revolving balance on my cards. I have never paid them all off completely. Something has always come up. Maybe I just never made it a priority.

July Debt Update

Credit Card Cash Offers

Why is it that I always get “convenience” checks from my credit card companies in the mail. Every week I get new offers. Maybe beacause in the past when I ran really short on money to pay bills I would use them. It is an expensive way to get money. Not “pawn shop” expensive but expensive none the less. I have built up a little savings which I helping with my temporary shortage this month so I am not tempted by the credit card offers.
They charge 3% right off the top with no maximum. YIKES! Using savings will not be free either as I will have to for go the interest I would have earned for the time is it out of my account…but that is still way cheaper than the alternative. Having savings is a nice thing.

Credit Line Increase

July 11, 2007
Discovercard increased my total credit line to $9,900 up from $8,400. That is good because it will decrease the total credit line that is being used from 14.7% to 14.3%. After i make a payment later this week the percentage will go down to 13.9%. That should help my credit score. I have not checked my credit score in about a year. It was 770 last I checked and I will check again next month. The website for the free report is http://www.annualcreditreport.com/. This site allows me to request a free credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion. The report will not include the credit score, which can be purchased for $5.