My Journey From Debt

Well, even though last week was payday, I’m going to have to wait until next week to pay all of my bills, and hopefully I will get enough from my part-time and side incomes to be able to pay them all.

Unfortunately, I’m not going to be able to pay my mom back the $300 right now like I had originally hoped, but perhaps I can use my income tax return to do that…

When I sat down to pay my bills just a little while ago, I had $575.86 available in my checking account and after paying bills, I am giving myself $50.86 until payday. I am paying the following bills today:

$225.00 - Credit Card 2 - Amount Due $219.50
$100.00 – Revolving Credit Account – Amount Due $85.00
$200.00 – Store Credit 2 – Amount Due $10.00

After this, my “Store Credit 2″ account should be paid off! I will still show a balance on the My Accounts Page due to my method for updating that page. As you may or may not recall, my method for updating that page uses the current balance as reported on my most recent statement updated at the time I pay my bills. This is done in the interest of both consistency and accuracy as things such as interest rates and fees may change from time to time making it difficult to predict exactly what the balance will be after making my payment. However, if my calculations are correct, I should be able to remove that entry when I get my next statement!

The issues I have been having with “Credit Card 2″ are causing me a bit of additional stress in that my minimum payment is now approximately twice what it was before. This means that even though I am freeing up some cash by getting that other account paid off, I still will not have any extra money above and beyond my normal payments until at least June.

I am noticing though that the minimum payment on my “Revolving Credit Account” has been decreasing at the rate of $2.00 per month by using my Rounding Up Method. Also, my minimum payments on my student loans seem to be decreasing as well, but you will be able to see that after I get paid next week.

Since my last update here, I have quite a bit of money flow through my accounts. In my previous bill paying post I mentioned two outflows that were pending but the action had yet to be taken. My rent payment was dropped off/made a couple of days after that post and as I mentioned, a credit card payment was scheduled to come out of my account and that did happen.

In other expenses, I spent $33.62 to repair a broken window and $39.30 to purchase a case of oil. I used a portion of the oil in changing the oil in my vehicle just yesterday and the rest will be used in the future. Also, my calculations indicate that I have spent $115.38 on fuel for my vehicle since my last update here.

Due to it being the start of another semester of school, I was required to spend $663.28 on textbooks. This has put quite a strain on my recent financial situation, but I have borrowed $300.00 from my mother (that I will be paying back ASAP) to help me with that. After these expenditures, the only other things I need to account for are that I have had two automatic transfers of $25.00 each from my checking account into my savings account and took $60.00 out of the ATM.

Ok, enough of the depressing stuff, it’s time now to talk about the money that I have had come in. Total income from both full and part-time work has totaled $1,745.28 and I received an interest payment of $0.02 from the bank.

I don’t think I’ve left anything out and my current account balance is $575.86 that I will be using to pay as many of my bills as possible. I will be looking into that later today and hopefully be writing all the checks tomorrow.

I mentioned previously that I called the people through whom I have my one remaining credt card as a means to try and get some stuff taken care of. Well, I have had some unfortunate incidents recently, but hopefully this will be the last. Previously, my credit limit on my account that I refer to as Store Credit 1 was reduced from $2,000 to $300. This really irritated me because I have never been late on a payment and I always pay more than the minimum amount required. Also, I have never paid interest on my account there due to only using it to take advantage of their “No Interest, No Payments” offers and getting it paid off before the deadline.

However, during a “regular review of accounts” they looked at my credit report and decided I was not worthy of having that much credit with them. The lesser of the problems created by this is that, normally, when they have their special offers, it is on purchases of $500 or more. Now, I’m not saying I should be spending that kind of money right now, but with my current credit limit I couldn’t take advantage of one of these offers if I wanted to. Secondly, and more importantly, this creates a bit of a snowball effect as my current credit available to credit used ratio is made that much worse as well.

Anyway, back to the present situation. Credit Card 2 is my only credit card that I still have and as such I do use it on occasion and did so in the past month or two. Due to currently being so close to my credit limit, I always make sure that I have credit available before using the card in order to avoid going over my limit. Before making my last payment, I had well over $100 of credit available. I sent in my payment and went along my merry way. A situation came up where I needed to use my card to make a purchase and did so because I knew I had the funds available.

What happened next was that my payment did not get processed on time, instead, it was processed the day after it was due; the next chunk of interest was added on to my balance along with a late fee. These factors along with my purchase caused my account to go over my credit limit and I was then nailed with an over-limit fee and my interest rate was changed from my undesirable but acceptable 9.9% to something much higher (29.99% I think it was) because of these events.

Well, when I received my bill and noticed this I was not very happy. I did not feel that this was appropriate, especially considering that I knew I had sent in my payment on time. When I called the customer service number, the agent I spoke to was understanding and helpful and was able to remove the late fee as well as half of the over-limit fee (or perhaps it was the other way around I don’t remember for sure) which I felt was an acceptable solution simply because the whole situation could have possibly been avoided if I had mailed my payment a couple days earlier.

Unfortunately, the representative that I spoke with was not able to do anything to help me with the change in interest rates and had to connect me with someone in a different department. After waiting on hold for quite some time, I spoke with a guy who said he would look in to it for me. What he ended up doing was reviewing my account (and looking at my credit report/rating) and determining that I would be stuck with the higher interest rate for 6 months. While it doesn’t seem like a very long time, it is quite insane to think of how much extra money this whole ordeal is going to cost me just in the increase in interest rates multiplied by my current balance and then by 6 months, it’s ridiculous! Anyway, that wasn’t the end of the bad news.

Apparently, due to what he saw in my credit report (I don’t doubt that my previous experience with that Store Credit account had some effect on this) and my current situations, it was determined that my account should be suspended. So, now I am not only paying a much higher interest rate, I temporarily do not have access to any “available credit” on this card. The only light at the end of this tunnel is that, like the interest rates, after 6 months of making my payments on time and such the account will come out of suspension. The interest rates will (supposedly) drop back to their previous rate automatically. I think I might have to call them and have them review it again to reactivate the account, but at the very least, I should be able to get the account reactivated.

There was one other thing I talked to him about that he was at least able to be the “nice guy” and take care of for me. When this whole situation took place, it was very close to the due date and my current balances in my accounts were not high enough for me to make this now much higher than normal payment. I asked him if there was any way that I could get a one-time extension on my due date so that I would be able to wait until payday to make the required payment. What he was able to do for me was set-up an electronic check from my checking account to make my credit card payment and schedule it for payday as well as waiving both the late-payment fee that I would be sure to get as well as their regular electronic check/pay by phone fee that I would have otherwise had to pay.

All things considered, I guess it could have been worse, I’ll just have to suffer with this insane interest rate for the next few months and focus on making progress on this account to get the balance down so that the interest rate will not be as huge of a deal.

Ok, it’s the 7th and I’m finally getting some of my bills paid. I did take care of a couple of things before, but the bulk of it had to wait till now. Since my last post, I was forced to take the remaining $226.07 out of my savings account (so that balance is now at $0.00) in order to make ends meet. I did lose $3.00 last month because that account balance was below $300.00 and that will happen again this month, but I will have $25.00 in there at the end of the week because it will be payday.

Expenditures since my last post include a $104.00 traffic ticket that I got due to icy roads (I couldn’t stop in time, rear-ended the car in front of me, and got a ticket for over-driving road conditions) as well as using my debit card at McDonalds ($6.05) for supper one night. I normally don’t use my card for fast food, but didn’t feel I could afford to take cash out of the ATM and don’t currently have any in my wallet.

Income since my last post amounts to $736.97 from various freelance and part-time income. Also, exciting to post is that Friday is payday from both my actual part-time job as well as my full-time job so that will help me out immensly! Especially because there will be holiday pay as well as hours worked so both should hopefully be a little more than usual.

Anyway, my current account balance is $741.61 as a result of a couple of bills being paid and not yet reported here:

$400.00 - Credit Card 1 - Set monthly payment
$100.00 - Store Credit 2 - Amount Due $10.00

This means it’s time to pay the rest of my bills and then when they start coming in for the next time around we will see how many late fees I manage to rack up:

$50.00 - Cell Phone - Amount Due $49.79
$100.00 - Revolving Credit Account - Amount Due $87.00
$100.00 - Student Loan 1 - Amount Due $54.83
$100.00 - Student Loan 2 - Amount Due $70.71
$100.00 - Internet - Amount Due $87.67
$125.00 - Landline/Cable TV - Amount Due $108.92
$100.00 - Electricity - Amount Due $70.13

This adds up to $675.00 which leave me with a little more than 66 dollars in my checking account. I probably should get some cash so that I have at least a few dollars on me, but I’m going to wait until I make sure I can pay the rest of my bills. I am really hoping that my paychecks along with the money that I already have total more than $600.

I am going to be spending a fairly significant amount of money on vehicle fuel in the next couple of weeks because I have some travelling to do this weekend. Also, I still need to pay rent ($355.00) and have already scheduled with Credit Card 2 that they will be taking $200.00 out of my account on Friday.

I called them after making my previous post and worked that out with them so that I wouldn’t get charged any late fees and also to take care of some issues I had on my current statement.

Well, after previously being pretty much on top of everything, I am back in the dumps again. Here I sit wondering how I am going to pay all of my bills this month. I’ll discuss how “short” I am on funds for bills this month in my next post, for this one I’m just going to look at how I got myself into the situation that I am currently in.

Previously, I reported that I had $260.95 in my checking account. However, I did still have to purchase Christmas presents. Between the gifts I purchased and a couple of extra items for myself, Christmas shopping cost $400.40 and I was not expecting to spend this much. In order to help cover these costs, I withdrew $250.00 from my savings account.

Also, with the money I withdrew from savings, I have spent $79.50 on fuel for my vehicle and $8.89 on fast food. Another thing that I did was make a stop at the grocery store and picked up a 12 pack of Sierra Mist, a couple boxes of macaroni and cheese, and a gallon of milk for a total of $9.81 off of my account balance. Oh, I nearly forgot to mention that I also had to purchase some dog food for my canine roommate which set me back $29.34 so it’s a good thing he don’t eat much and I only need to do that once every couple of months or so.

In the midst of all this, I did get paid right around Christmas and got $382.00 from my full time job and $109.34 from my part time job. These numbers together helped me make it through the holidays. After subtracting my $25.00 automatic transfer to savings, these numbers combine to leave me with $388.62 in checking and $229.05 in my savings account. It looks like I’m going to be paying a $3.00 fee this month for having my savings account below $300.00 again.