by Ashley
Here’s my debt update now that March is over.
Place | APR | Feb End Balance | March End Bal |
| Capital One CC | 17.9% | $413 | $0 (Yay!!!) |
| Wells Fargo CC | 13.65% | $7697 | $7429 |
| Carmax – Car Loan | 7.75% | $24040 | $23736 |
| Bank of America CC | 7.24% | $2219 | $2198 |
| License Fees | 2.7% | $5808 | $5720 |
| Mattress Firm | 0% until Sept 1, 2014 | $1381 | $1281 |
| Medical Bills | 0% | $9,000 (approx.). | $8328 |
| Total: | $50,560.44
| $48,692 |
A couple things to note:
First, I removed my student loans from the spreadsheet. I shared them in the first debt update to give you a big picture of all my debts. I’m not opposed to sharing them with you and am happy to do a big quarterly update if people are interested, but I always said my focus was on credit cards and I’m paying so little toward the student loans that I’d rather look at this reduced spreadsheet so you can really see where I’m making dents in my debts instead of just having a HUGE looming debt amount that barely budges every month (which would be the case if student loans were included).
Second, the medical bill debt is no longer approximate – this is the actual amount owed. Just so you know, the total amount was actually over $9,000 but we had already been making some payments, and when we had extra money last month we put a big chunk of it directly toward a lot of the smaller medical bills we had received (more details this afternoon when I discuss our revised budget). Some may argue this was unwise since they were interest-free, but we had 8 different medical entities to pay and now we have reduced this number down to 4 and have established payment plans for the remaining debt (except the Mayo Clinic – details this afternoon). It was important to me to knock out a lot of the smaller bills so we could have fewer monthly debts to deal with.
Third, in regard to the license fees, many people commented on my last post to look into the “service” fee, saying it might be more than I think. I checked it out and discovered that the service charge is a percentage of the payment received. I played with the numbers and for a payment of $50 it was $1.38 (2.7%); for $75 it was $1.74 (2.3%); for $100 it was $2.50 (2.5%), so it appears the percentage of the fee goes down with larger payments. Regardless, 2.7% is still much lower than any of my credit card debt so I will continue making smaller payments to that entity at this time.
I also plan on drastically increasing the amount we pay toward debt, overall, each month. I feel like this is a tease, but I’ve got to tell you just to make sure you check back this afternoon for our full revised budget where all these details will be revealed.
Hi, I’m Ashley! Arizonan on paper, Texan at heart. Lover of running, blogging, and all things cheeeeese. Freshly 40, married mother of two, working in academia. Trying to finally (finally!) pay off that ridiculous 6-digit student loan debt!
Congrats, Ashley, I can feel your joy at the progress made this month!
Congrats on paying of Capital One! Clearing a card is a great feeling! I’m not necessarily a Dave Ramsey fan or follower, but I think his idea of tackling the small debts first regardless of interest is a good one- not for the long haul, but for the first 6 months of your payoff plan, where you need to feel success. So you should definitely feel good about knocking those medical bills out, even if it wasn’t the best “financial” thing to do. It keeps up your motivation, and when you are in it for the long haul, that’s IMPORTANT. On that note, I would consider hitting the mattress next. It will feel good to knock it out, you’ll be able to do it relatively quickly, and, as an added bonus, avoid all the nastiness with the 0 percent interest ending.
You’re so right! I really want to target my Wells Fargo CC prior to my Bank of America CC because its such a HUGE difference in interest rates, but it has felt AMAZING to knock off some of these other payments (Capital One, medical bills), and the Mattress Firm account is definitely on the chopping block! More details this afternoon! *wink*
That’s some very solid progress right there! Keep it going!
Also, the APR on your license fees is actually even much smaller than 2.7%, since you should (approximately) divide the total annual installment charges (“interest”) by the amount of the debt not by the payment. So, something like $16/$5808 which is a very small number. Great!
Ack, x100 of course to get the interest rate in %.
Oh wow, I had no idea! Thanks for pointing this out – I learn something new everyday! : )
Keep up the good work and get that debt to 0!!!
Congrats on making some progress and getting under the $50k mark (for the debts listed)! How exciting to have paid off some of your debts in full, even if they are the smaller ones! Keep it up 🙂
that’s some great progress!
Question (and some might oppose this idea) but have you considered doing a balance transfer on the WF debt? When i was paying off my credit cards (no done as of last month – wohoo!) citibank and discover had some pretty great deals at 0% for 18 months with a 2.99% fee on the transfer.
I did the math and it made sense for me. You might want to check it out, bc that’s a high amount at a pretty high interest rate. Then I just divided my balance over 17 months (just to be safe) and that was all I paid to the card. It might end up freeing some money to go to some of the other debt.
For once balance, i only transferred the amount I could pay off in 18 months and that also saved me some money in interest.
Do some number crunching and see if that will be helpful in your case.
Funny you posted this, because this actually just came up. I just got a balance transfer offer through my Bank of America CC for a similar deal (0% APR, flat fee…I think 3%). But my credit limit for BoA is relatively low, so I’d have to either ask for an increase (which would require them to run my credit, and I’m trying to avoid any further inquiries right now), or pay off the full balance, transfer a partial balance from Wells Fargo, and I’d still be stuck with some on my WF card. I’m not ruling it out as a possibility, but I think for right now I’m trying to attack fast and furious and will try to call and ask WF to lower my interest rate. I tried last month and they said no, but after paying off my Capital One account I JUST passed the 50% debt-to-credit threshold, which will hopefully impact my credit enough to have WF approve a lowered interest rate. I’m planning to call back sometime mid-month to see.
Yay for paying off Capital One! Is it sad that I’m envious of your interest rates? lol. Our Capital One cards are at 19.8% and they will NOT lower it!! I have a great credit score and have never been late with a payment. Drives me nuts. I can’t wait to get rid of them!
I’m behind on entries so I’ll have to read up on those license fee’s you mentioned. With that said I’m loving how active this blog is now!! So much to read and follow, love it.
Awesome! This is really great! My general view is to wipe out any small stuff first, regardless of interest rate, just to make life easier and then go highest interest rate on down the line. (I classify small stuff as anything smaller than whatever you have for extra debt payment.) It’s not as logical, but it sure makes life easier to get those out of the way!
Also, great job sorting through the medical bills and also checking on the license fees! It’s nice to see a good solid picture of what you’re dealing with and some nice progress too!