by Hope
Before I post this table, here’s what’s happened with the USAA credit card. You will see it’s much higher than normal. For the past several months, I have paid the amount for our phones and car insurance on this credit card, posted my debt update and then those bills come off this card. I would pay it at the beginning of the month, then wait for the next statement date, then pay bills with it. (Actually they are auto-paid, no extra fees for using credit card. Yes, I earn points. Which we all know I use when I travel.)
I would post my debt update in the in-between time. And not only did I do this to show the debt coming down, even though it went right back up, but moreso, I did this to help my credit score. Because waiting until after the next statement date, when they report to the credit bureaus helped my credit score.
But now…now I don’t give a flying flip about my credit score. I just want this debt to be gone. So I paid the CC by the due date and then immediately paid my insurance and phone bills versus waiting. That’s why that CC is higher. I’m still doing the same thing, just not delaying in paying the bills any longer.
| Debt Description | October, 2023 Total | Interest Rate | Minimum Payment | Current Total | Payoff Date (Est) |
|---|---|---|---|---|---|
| CC - Amazon | $1,497 | 29.99% | $48 | $1,391 | ? September, 2024? |
| CC - Frontier | $3,857 | 29.99% | $130 | $3,426 | ? November, 2024? |
| Dad - New Furnace | $2,600 | 0% | $0 | $2,600 | January, 2025 |
| CC - USAA | $5,000 | 19.15% | $135 | $4,761 | |
| Student Loans | $22,121 | 2.875% | $22,700 | In Deferrment until May, 2025 | |
| CC - Apple** | $500 | Paid off every month | $0 | ||
| CC - AMEX | $894 | 29.24% | $0 | $0 | Mar, 2024 |
| CC - Sams | $1,106 | 29.99% | $0 | $0 | April, 2024 |
| Personal Loan #1 | $2,500 | 0% | $0 | $0 | July, 2024 |
| Personal Loan #2 | $2,500 | 0% | $0 | $0 | August, 2024 |
| CC - Wander | $1,630 | 29.24% | $0 | $0 | August, 2024 |
| Total | $44,206 | $313 | $34,878 |
I already shared about my unplanned CC payoff here and that my second personal loan was also paid off this month.
I’ve called and closed those first two credit cards that were at a $0 balance. I’m sure that’s going to ding my credit score. But on the flip side, those were my newest cards, I think. So may help eventually since my oldest credit average should increase. Again, I think. But really, not tracking my credit score at all these days. No foreseeable need.
Hope is a creative, solutions-focused business manager helping clients grow their business and work more efficiently by leveraging expertise in project management, digital marketing, & tech solutions. She’s recently become an empty nester as her 5 foster/adoptive kids have spread their wings. She lives with her 3 dogs in a small town in NE Georgia and prefers the mountains to the beaches any day. She struggles with the travel bug and is doing her best to help each of her kids as their finish schooling and become independent (but it’s hard!) She has run her own consulting company for almost twenty years! Hope began sharing her journey with the BAD community in the Spring of 2015 and feels like she has finally in a place to really focus on making wise financial decisions.
If you’re carrying a balance month to month on this USAA card, there is usually no grace period for new purchases. Interest is calculated from your average daily balance (or a close analog).
So, unfortunately, if you are paying your phones + car insurance earlier than before, your average daily balance is probably higher and you’re paying more interest with this new approach. Great that you are collecting points that are useful to you, but don’t rack up extra interest just to do so.
The solution if you need these points, is to use the credit cards to pay those bills and then pay the credit card as soon as possible, well before your due date. Like within 1-2 days if you can swing it. Keep your average daily balance as low as possible until you’re fully paid off.
All great points. Using a card to earn points doesn’t make sense when your interest rates are this high and you’re carrying balances from month to month.
I can see your opinion. Getting closer and closer to having no balances carried over month to month for sure.
But the points make a huge difference for me when I do travel.
If you didn’t pay so much in interest rates, you’d have much less of a need for points. Do you need me to explain further? Points are not bonuses for free travel. You paid for them via higher interest rates. If you pay XX extra a month by charging bills to your cards with a high interest rate, you’d get back maybe 0.x of that value in points. Much better not to pay extra on your cards and put that money (which is real money, not a small fractional perk of ridiculously high interest rates) to travel.
The above comment is not an “opinion”. It is it is math following the terms and conditions of credit card interest. If you carry a balance, you should not be putting on new purchases and then letting them float until the next statement. It will cost you more in the long run. Interest is calculated on the average daily balance of the card not on a “previous statement” amount or something of that sort.
If you absolutely must “earn points” I suggest you keep it simple. 1. Charge insurance (or utility bill or whatever) to CC. 2. Go immediately on CC website and make a payment for the same amount. Then it is only raising your average daily balance for a day or two, rather than a couple weeks or whatever it ends up being.
How many points could you possibly be earning on a monthly/yearly basis?
I don’t understand what you’re saying here. Your current column doesn’t add up and I think you’re saying you didn’t include the USAA balance but why? This makes it look like you owe less than you do?
The balance is there and I did double check the addition. Perhaps you are not seeing the full list based on your view.
The total owed is correct and USAA balance is included and correct.
I agree with Anonymous that the totals are misleading. From the table, it appears that your debt has decreased by $14,000, but if you calculate the amount paid on each line item, the debt has decreased by about $9000. The difference between the two figures is $4761, the exact amount of the balance on the USAA card.
You are absolutely leaving out the USAA balance. Your total is 30,117. When I add up the numbers it’s 34,878. Which happens to be your number plus the USAA. Why do you always pull these shenanigans?
It was not intentional, corrected.
Why are you always like this? People point out that your math makes no sense, you haughtily assure everyone you “double checked” and then you admit “it was not intentional”? Spend three minutes with a calculator while you “double check” and you’ll catch these errors. Why should anyone ever believe your numbers as financila blogger when you can’t do second grade addition? You get paid for these posts. Of course none of that income is included in your “planned spending.”
You don’t think it is? How come? You think I’m making a ton of money for this?
For the record, it is included in my income.
As usual, you ignore the first part of the message. Why don’t you actually check with a calculator your totals? It’s not a matter of how much you’re paid, it’s about being accurate and transparent and competent. You always try to fudge the numbers, you get caught and then you’re self righteous instead of being embarrassed about elementary math.
It’s not correct. Even if you just add up the numbers in the ones column, you can see that you total is not correct.
Why are you excluding the balance USAA card from the Current Total? There are a lot of words in this post, but not many go towards explaining what is actually happening here.
It was not intentional.
Your current total says $30,177 but that’s not what I get when I add up all the numbers in that column?
Hope, you have not included the USAA balance in your total. Simply adding your current balances equals $34,878 – exactly $4,761 more than your posted total. The math you use to justify your continued use of credit cards is confusing enough. It sends readers into even more of a tailspin when the hard numbers don’t add up.
I’m afraid you are shooting yourself in the foot with the credit card. As long as you carry a balance you will get charged interest on new purchases. If you must use it, immediately pay it, don’t wait until the end of the billing cycle. I’m talking the very next day. It raises your average daily balance and the interest you are paying.
June debt total36445
July debt total 35711
Total decrease 734
July debt total 35711
August debt total 34878
Total decrease 833
It’s easier to just tell people what you decreased your debt by Hope. Keep going.