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Home > Snowflakes 11/09/16; Credit Card Musings
 

Snowflakes 11/09/16; Credit Card Musings

September 10th, 2016 at 05:28 pm

Challenge starting balance: $6,835.74
Plus:
- weekly EF savings $35.69
- football winnings $48.00
- my credit card repayment to balance transfer card $151.50
- B's credit card repayment to his card $180.00
- extra credit card repayment to his card $103.00
Challenge closing balance: $7,353.93

This week's additions to the challenge are the usual EF savings, plus football winnings for games 4-6 from my team (these were all fairly low wins so could add them all together), plus repayments to both my and B's credit cards.

With my credit cards, I am all set to be officially retired from credit card debt by 30th September. That has a nice ring to it, I must admit!

There are some small transactions on my credit card I use amounting to around $77 for 3/4 of a tank of fuel (which I pay back at $20 per week) plus some cosmetics I needed to buy.

There is the anticipated $110 remaining on my balance transfer card plus I have been charged a $129 annual fee for this card.

Which brings me to reassessing what I want to do with this card after it is paid off at the end of the month.

I had the idea of either earning cashback rewards on various cards after the cards were paid off to actually bring some income in after paying credit card companies interest and whatever charges for so many years; or getting a points card and using it to earn rewards.

Now that I have to pay this $129 I'm thinking I may as well keep this card open for a while to utilise the annual fee paid. I've kind of had a shift in thinking of my thoughts about credit card debt too, so I have to consider that.

The thing is our EF is generally at the moment around $7000 give or take a few thousand. So really the credit cards when they are paid off are technically an asset because they are credit available to be used at any point in time if needed, no questions asked.

So if there was a major emergency ie I suddenly lost my job we would be able to use the cash saved in the EF possibly to pay mortgage and bills and use the credit cards to pay for food and other necessities; and we would most likely have six to nine months emergency money available as opposed to two to three months with the cash only.

Perhaps I might revisit the points/cashback ideas in six months or so. Would need to change at least one credit card in any case. My everyday credit card I use has a 14% interest rate (best rate possible for the big 4 Australian banks) while the balance transfer card has a 21% interest rate - so will need another card to replace that with a much lower rate in the next few months. I could increase the credit available on the 14% card, but really I would rather get a lower rate card from a smaller institution - you can get around 8% cards.

Sorry for the super long post guys, I'm just trying to formulate ideas and plans and put them in writing to refer back to later! Feel free to add any thoughts or suggestions.

With B's card I paid the monthly $180 and then referred the balance against what I had in our debt paydown spreadsheet. According to the spreadsheet his card should be at $3192 - it needed an extra $103 repaid to reach this amount. Next month he will be owing just over $3000.

4 Responses to “Snowflakes 11/09/16; Credit Card Musings”

  1. FrugalTexan75 Says:

    I've been using credit card sign up bonuses to pay down DHs medical debt, and will also use it to pay on his student loan and possibly our mortgage as well. As long as it is always paid in full, then credit cards are a great tool I think. Smile

  2. MonkeyMama Says:

    When I've paid an annual fee on a bonus credit card they always refund the entire fee when I cancel the card. (Maybe it if it's done within 60 days?) It might be worth cancelling to get your $129 back, if you were thinking of canceling it anyway. I don't know if that is more universal or if it depends on the card.

    September 30th - woohoo! Just 3 weeks!

  3. MonkeyMama Says:

    P.S. I was going to say that I like the colors of your blog. Big Grin

  4. VS_ozgirl Says:

    Thanks for your input guys! I've had a look into my balance transfer card, which is actually an airline rewards card so I think I may hold onto it for a year to test it out and get the rewards happening on that. Pretty sure I can score a free flight for little effort so I might give a go for a while!

    Yes can't wait for September 30th!!

    Thanks MonkeyMama for the compliment on color choice Smile.

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