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Slow and steady wins the race...hopefully

May 26th, 2009 at 08:13 pm

About two years ago I had whittled our credit card debt down to less than $1000, and was on the way to being free. Now...not so much. Through a series of unfortunate dental events, home repair needs and outright reckless spending, it's skyrocketted to just over $10,000.

I have two credit cards right now. One is our Kroger card (grocery store). We use it for all purchases, and get money back every quarter for grocery purchases. Originally, I only used it for things that I would normally use my debit card for, and was transferring the money each day from the checking to an online savings account, and then back to checking once a month to pay the card off in full. That was the plan, and it worked for several years.

Then, I'm not sure what happened. But I put some things on there that weren't normal monthly charges. And a few more. Now I have about $2300 extra that I'm carrying on the card, and no longer can pay off the balance every month.

As for the other card, it's a Bank of America card, and it is the repository of all my other credit card debt, condensed into one card, enjoying a 0% interest period that expires next month. I've got right at $9000 on it. What I had been doing for the last few years was taking any credit card debt I had and transferring it to a new card with a 0% interest promotion, and stashing it there to wait while I worked on other debts that had higher interests. At the end of each promotion, I would apply for a new card, transfer the balance, and close down the previous account. I was also using this as my emergency fund. Well, emergencies came, and the card filled up (or close to it), and I don't think I'll be able to get another card with that high an initial opening balance with a 0% interest. I'm sure I could get one, but it would probably be for only $2000 - $3000, and I'd have to split the balance up. I may end up having to do this anyway.

But, I've prioritized recently. Before I can do anything about the BoA card and its balance, I need to get the Kroger card back to a balance that I can pay off every month. It's still worth it to use the card. It has a point system, but rewards you most for shopping at Kroger and buying Kroger brands, which we do anyway. And we get $60-$80 in Kroger checks every 3 months.

So, taking a page from the Tortoise and the Hare, I've decided to take the "slow and steady wins the race" approach to paying it off. I will never pay it off if I wait until I've got lump sums at the end of the month. I need to just chip away at it, paying little bits every time I have them. Even if it's just $1 a day, every little bit helps. Because the compound interest is just going to keep accruing.

So my goal, and my blog's plot, will be to discover those little ways to find money, and then immediately send that money to pay on the Kroger card. And track how I'm doing. With each amount paid, my overall time-to-payoff will go down, as will my overall estimated interest paid. I hope I can crunch the numbers enough to tell the tale.

So, I start today. Or yesterday, rather. I average aboout $1500 a month in total monthly charges, things that I pay every month, within the budget. My balance as of yesterday was $4398.71. But, I then cancelled XM radio, for several reasons. And had a refund of $18.78, so my balance today is $4379.93. Only $2879.93 more to go...

4 Responses to “Slow and steady wins the race...hopefully”

  1. creditcardfree Says:

    Welcome to SA! You have a great plan. Best wishes.

  2. HouseHopeful Says:

    Glad to have you here! And slow and steady usually turns into a little quicker down the line - but you'll definately win the race Smile

  3. L Saver Says:

    Welcome! I'm looking forward to reading about your progress!

  4. Ima saver Says:

    welcome! sounds like you have a good plan@

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