Debt Dumpers - 2015

[Eureka]

Since we are at the start of the month I thought I'd do an update to keep myself remaining accountable

For the month of August our debt balance decreased by $1,074.33. Not as much as I'd like, but a decrease is a decrease, I suppose

And I know adding credit cards isn't recommended, but I got an offer from Capital One for 0% until May 2016. I did the math and transferring my (almost) 24% interest Discover card over and continuing that same minimum payment would have it paid off before the promotional offer ends. Talked to Husband and it seemed silly not to do it, so we did. Goodbye interest

I also realized that it isn't necessary for my Husband to still have is MyFico account right now, so he cancelled that. It's only $16, but it's still $16 that will go into our snowball starting this month!

Lastly, thank you to whoever posted about cutting out their DVD portion of Netflix!! I don't know why that didn't cross my mind before, but it SO isn't worth it for us to still have it. Will be talking to Hubs about cutting that out tonight, which would add an additional $10 to our snowball!

Good luck on the debt dumping this month, everyone

That was me who posted about Netflix. Must be an epidemic...now my parents are reevaluating their value of the DVDs. Lol!

 

[LinderInWonderland]

That was me who posted about Netflix. Must be an epidemic...now my parents are reevaluating their value of the DVDs. Lol!

We cut the cord two years ago and haven't looked back. With Amazon Prime, Netflix, Hulu Plus and even WWE Network, we pay a third of what we used to pay for cable. Once HBONow is on Roku, it adds another $15 a month, but would reduce our going out expenditures since we won't have to go to viewing parties for Game of Thrones.

 

[bcwife76]

How many credit cards is too many?
DH and I share a Capital One mastercard that we NEVER use anymore (no balance on it, we just don't use that card as it doesn't offer us any rewards)
DH and I also share a Presidents Choice Financial Mastercard; this is our main card because we earn a ton of points on EVERYTHING we buy and 2x the points when we shop at any Loblaws store. Those points are then converted into a dollar value and you can use them to buy anything in a loblaws store. For example last month I used 60,000 points and got $60 off that particular grocery trip. And it did not take us very long at ALL to amass 60,000 points, esp when I earn double the points while buying gas and groceries at Superstore. Plus I have their PC Plus rewards card so each shopping trip I'm probably earning an extra 5000-10000 points just by buying things I was going to buy anyway. My red peppers, for example, got me 1200 points, my lunch meat at the deli got me 1800 extra points and the granola bars I bought for the kids lunches got me an extra 2000 points. So you can see how easy it is to rack those points up - free money baby!

I have 2 Visas, RBC which is the card I have had the longest (since I was 20) and Amazon.ca rewards Visa (which I use for anything US-related as they don't charge a conversion fee when doing the exchange from US to Canada). While I do use these cards a bit each month, I always pay the balance in full because I'm not charging much to them, easy peasy.

DH has an Amex.

Today DH got an offer from MBNA mastercard for a card (no fee - none of our cards have fees) and 0% on balance transfers for 10 months. I think he should take this card and move the balance of his AMEX onto this card. His Amex has an interest rate of 2.99% but this is ending in December. It is the only credit card that we carry a balance on because of it's low interest rate (if we can't pay our other cards in full then we *gulp* use our HELOC to pay them off which has a current interest rate of 3.4%). He thinks taking out this new card will affect our/his credit score negatively and that he will have too many cards. I think we should do it(save ourselves a few months of interest) and just not USE that new card for any new purchases (and also continue to reign in our spending *ahem* on any other cards). So yay or nay on the new card?

 

[dayvewc]

How many credit cards is too many?
DH and I share a Capital One mastercard that we NEVER use anymore (no balance on it, we just don't use that card as it doesn't offer us any rewards)
DH and I also share a Presidents Choice Financial Mastercard; this is our main card because we earn a ton of points on EVERYTHING we buy and 2x the points when we shop at any Loblaws store. Those points are then converted into a dollar value and you can use them to buy anything in a loblaws store. For example last month I used 60,000 points and got $60 off that particular grocery trip. And it did not take us very long at ALL to amass 60,000 points, esp when I earn double the points while buying gas and groceries at Superstore. Plus I have their PC Plus rewards card so each shopping trip I'm probably earning an extra 5000-10000 points just by buying things I was going to buy anyway. My red peppers, for example, got me 1200 points, my lunch meat at the deli got me 1800 extra points and the granola bars I bought for the kids lunches got me an extra 2000 points. So you can see how easy it is to rack those points up - free money baby!

I have 2 Visas, RBC which is the card I have had the longest (since I was 20) and Amazon.ca rewards Visa (which I use for anything US-related as they don't charge a conversion fee when doing the exchange from US to Canada). While I do use these cards a bit each month, I always pay the balance in full because I'm not charging much to them, easy peasy.

DH has an Amex.

Today DH got an offer from MBNA mastercard for a card (no fee - none of our cards have fees) and 0% on balance transfers for 10 months. I think he should take this card and move the balance of his AMEX onto this card. His Amex has an interest rate of 2.99% but this is ending in December. It is the only credit card that we carry a balance on because of it's low interest rate (if we can't pay our other cards in full then we *gulp* use our HELOC to pay them off which has a current interest rate of 3.4%). He thinks taking out this new card will affect our/his credit score negatively and that he will have too many cards. I think we should do it(save ourselves a few months of interest) and just not USE that new card for any new purchases (and also continue to reign in our spending *ahem* on any other cards). So yay or nay on the new card?

Based on what I understood of reading, I would go for it. A new card in and of itself is a negative on the score, but the added utilization of credit (not using any more, but have more to use) becomes a plus, and it kind of cancels itself out. Especially if you can get a 0% rate. Keep with the plan of not using it and paying everything (or as much as possible) off each month and I don't think it would be that bad.

IMHO; YMMV; Past performance no guarantee of future returns; I am not a financial adviser and I don't play on on TV either.

 

[PrincessKymm]

How do you decide which cards to pay off first? Is it strictly balance related? I have one card I can pay off next month. I can make a HUGE dent in the next one come December/January time BUT the card after that is almost the same balance (difference is $20). How should I determine which card to pay off? One is a store card and one is a MC. Should I pay down the MC so I can have it for larger emergencies?

 

[Eureka]

How do you decide which cards to pay off first? Is it strictly balance related? I have one card I can pay off next month. I can make a HUGE dent in the next one come December/January time BUT the card after that is almost the same balance (difference is $20). How should I determine which card to pay off? One is a store card and one is a MC. Should I pay down the MC so I can have it for larger emergencies?

Everyone has a different philosophy, some like seeing the lower balance go away more quickly. Dh and I do it strictly based on how much we're paying in interest. Kills us to throw money away on that.

We have small balances on two cards. We've been trying to keep the higher-interest card just for bills that are automatically charged, like Ezpass and Netflix, etc, and pay it off every month. One pricey car repair (of course it came up right AFTER we paid a big chunk on the other credit card and didn't have much savings left) has kept us from paying that one off the last two months. So we've been splitting our payments 2/3 on this one to get rid of it first, and 1/3 on the lower-interest card that's had a balance for awhile that we keep chipping away at.

 

[dayvewc]

How do you decide which cards to pay off first? Is it strictly balance related? I have one card I can pay off next month. I can make a HUGE dent in the next one come December/January time BUT the card after that is almost the same balance (difference is $20). How should I determine which card to pay off? One is a store card and one is a MC. Should I pay down the MC so I can have it for larger emergencies?

If the difference on the 2 cards is only $20 dollars, I'd knock out the higher interest rate first.

My take in general is lower balances before higher rates. If the balances are near the same (less than 1 monthly payment worth) then it's higher rates over lower balances.

 

[Miss Whimsy]

Oh no! What happened to your cat? That's a huge bill.

just saw this, sorry!

We took him in because he wasn't eating, and it turned out he has kidney and heart disease. The $5K covers a week's hospital stay with daily tests, a feeding tube, and lots of meds. Ultrasounds (of his kidneys and heart) are WAY expensive.

 

[Angeejoe]

@gracie1 -

You haven't been on the thread in a few weeks! I hopes all is well& your off to some tropical destination with no internet!! I'm missing your optimism!

 

[NinaBella]

Thanks for the info about Care Credit, guys, I'll look into it. He's going to have some ongoing issues, though hopefully nothing like this $5K bill again, but I need to be prepared to up my vet expenditures over the course of his life. I'm just glad he's back, and that he's eating. He's starting to be a little jerk again so I think he's feeling better. (Why do we put up with cats, I ask you.)

Our Care Credit card was 28.99% interest! My son needed emergency surgery so the doctors office had us fill out the paperwork. I have no idea why it was so high. Most of my accounts is co-accounts with DH and are less than 10% interest. The only thing I can think of is I had my son listed as primary and me as a co-signer and he has very little on his credit report and some are not good. So be careful with Care Credit. They are not the lowest percentage rate. That is one of the accounts I just paid off recently because of the interest rate.

 

[NinaBella]

How do you decide which cards to pay off first? Is it strictly balance related? I have one card I can pay off next month. I can make a HUGE dent in the next one come December/January time BUT the card after that is almost the same balance (difference is $20). How should I determine which card to pay off? One is a store card and one is a MC. Should I pay down the MC so I can have it for larger emergencies?

There are two methods. One is to target them by the interest rate paying off the highest one first. I have read and I believe is a Dave Ramsey theory to pay off the lowest balance first regardless of interest rate. This second method is a good way of just getting rid of accounts. Plus, I read there is more gratification to get rid of accounts and keeps you motivated to keep getting out of debt because you can see the fruit of your efforts sooner. In addition, you can take the payment amount you made on that paid off account to pay toward the next account. It's a great method in my opinion.

I am doing a combination of both. I put all my debt into a spreadsheet that shows total balance and percentage. I can see the lower balance accounts and determine which I can realistically pay off within a few months. If they also happen to be high interest accounts, even better! Just in the past couple months I have paid off my two highest interest accounts and my two lowest interest accounts.

So now, I am at a point where I have to pick which account to snowball starting October 1st. On one hand, I can snowball another store card and have it paid off in 2-3 months. HOWEVER, I am considering that all four of my credit cards are pretty much maxed out. If I pay off the store card... great... account done... I will no longer use those accounts. BUT, if I pay toward my credit cards, it will take much (much, much) longer to pay them off, BUT, if there were to be an emergency repair/event in our family, we would have room on the credit card to use the credit card. Only in the event of an emergency of course. Right now we have a small emergency fund, but is no where the amount we need in an emergency fund. I am also the type who thinks why have a large savings when I have debt to pay. I would prefer my credit card balance be paid off and use that for emergencies only.

So, pick your method. I suggest keeping a spreadsheet (or manual list if you like) that shows all our accounts, minimum monthly payments, total balance, and interest rates all on one page. I keep a spreadsheet and have tabs for each month, so each month I track how much I pay toward each account, auto sum all my money in, money out, and total debt. My bank website also has a similar budget feature, but I like the spreadsheet.

 

[mrsabbott]

Dave Ramsey does advocate paying off smallest to largest but I am also doing a combination of both. As it stands right now, we are staying afloat (barely) with our current income. We plan to jump start our version of the debt snowball by using our tax returns. If I paid off the card with the highest interest rate (it's a big one) it would free up about $200 a month. If I paid off my 4 smallest balance credit cards, it would free up about the same amount per month.

Instead, I am going to pay off a loan we took to replace our a/c unit (total unexpected expense, right when I lost my job.. of course!). It is 0% interest for the first 12 months and then the interest is something like 28% or something nuts like that. So, we are going to pay that off before the 12 months is up and free up $180 a month. That will leave money open to pay off some more debt. We decided to pay off 2 small loans (one for my husband's Harley, one is the business loan we took out for a business we had to close). That will free up another $230 a month in payments! The interest rate is reasonable but it will free up more $$ per month in payments. Depending on our tax returns, we may also pay off our smallest credit card and free up an additional $40 a month payment.

I just feel like it makes more sense to free up more money per month than to pay off the smallest first or the large one with the high interest. Now, after we do that.. I am going to pay off smallest to largest because, well.. there is something to be said about paying off a credit card and seeing that $0 balance!! It will motivate me to keep on going and I will be able to pay off more quickly when I free up more $ per month.

Ninabell, that is a tough decision on which card to pay off. Considering the ridiculous amount of emergencies my family has had the past year or two.. I would pay off one of the credit cards and put it aside. At least until you can establish your emergency fund! Good luck!

 

[Dentam]

Got back from our trip to WDW last night. Time to get serious about getting more debt paid off! My goal is to get the remaining balance on my Disney cc (about $2,300) paid off by the end of this year!

 

[ariel1025]

Well, talked to Hubs about cutting out the DVD in the mail portion of our Netflix. He was hesitant so we compromised on cutting back to the 2 DVDs a month plan instead of unlimited. Only $4 added to the snowball instead of $9, but it's still something

 

[gracie1]

@gracie1 -

You haven't been on the thread in a few weeks! I hopes all is well& your off to some tropical destination with no internet!! I'm missing your optimism!

I'm here!!! I was just catching up on the threads. Have been working a lot and haven't posted in awhile. I do wish I was on some tropical vacation!!! I'm in the process of trying to refi my mortgage and combine the home equity loan that I have into it. While I owe 22 years on the mortgage and 8 years on the home equity loan - I plan on combining them for a 20 year mortgage. I've been mulling this decision over and over because I keep thinking in 8 years one loan will be paid off - however with the savings that would come in interest alone I think it will be worth it. But who knows - they may not want to refinance me. It would drop almost 3% off the equity loan in interest and almost 2% off the mortgage. I still go back and forth in my head over this....

Sounds like everyone else is doing fantastic!! A lot of debt dumping going on - and it doesn't look like anyone is adding to their debt so that's a huge accomplishment!!

 

[bcwife76]

What is Netflix dvd? Apparently it's not available for Netflix Canada. Our monthly fee for netflix is going up next year - I guess we were 'grandfathered' in at the original monthly rate of $7.99 but starting next May it's going up to $9.99/month. Still a darn good deal I think.

 

[ariel1025]

What is Netflix dvd? Apparently it's not available for Netflix Canada. Our monthly fee for netflix is going up next year - I guess we were 'grandfathered' in at the original monthly rate of $7.99 but starting next May it's going up to $9.99/month. Still a darn good deal I think.

Netflix DVD is where they send you DVDs in the mail based off of a queue you create in your account. You can get unlimited mailings a month, so as soon as you send one back they will send another, which is what we had in addition to the unlimited streaming plan. Or you can get 2 mailings a month, so after you mail back the first one they will send you another one and then that's it for the month. There is a much bigger selection of newer release movies than on the streaming.

 

[Dentam]

I never had good luck with netflix dvd's - most arrived scratched which I'd only find out after I was halfway or more through a movie and then it would go haywire. Very frustrating. I've had the online streaming for years and only pay about $8/month for it. The selection used to be kind of sad but I've been impressed with how many new movies and shows they've been adding in the last year or so!

 

[bcwife76]

Ah gotcha, definitely a service we wouldn't use then as we don't rent dvd's - doubt very much Netflix Canada would add this service on. DVD rentals are a dying breed out here, I can't even think of one rental shop anywhere near us. The Safeway store closest to my house had a Redbox service for a while, but I noticed the last time I shopped there it had been taken out.

I think now more and more people are using On Demand, as all the tv providers here offer that. Or they acquire their new movies in other ways...... lol

 

[SirDuff]

Ah gotcha, definitely a service we wouldn't use then as we don't rent dvd's - doubt very much Netflix Canada would add this service on. DVD rentals are a dying breed out here, I can't even think of one rental shop anywhere near us. The Safeway store closest to my house had a Redbox service for a while, but I noticed the last time I shopped there it had been taken out.

I think now more and more people are using On Demand, as all the tv providers here offer that. Or they acquire their new movies in other ways...... lol

Redbox pulled out of Canada early this year. Canadians just weren't using the service at the same level that it is used in the US and it wasn't profitable for Redbox to have locations here.