Friday, June 15, 2012

Cutting Down on Credit Use

By this time in the month our Visa normally seemed to be pushing the $1,000 mark. There were some months in the last year where we were making a two or three thousand dollar payment in order to pay the whole thing off. Some of these were major expenses that we'd anticipated and had cash in a savings account to cover but not all of them.

Our Visa is an awesome card in terms of the interest and the rewards. It is through our credit union so I don't recall the last time we had a late fee (even when I was a day or two late) or an interest payment. We've earned hundreds of dollars in rewards which I redeem for gift cards.


It's still a credit card and it is obvious to me now that it enabled us to feel like we were sticking to a budget when we really weren't.

It is so easy to throw something extra in the cart when you don't have to worry about having the cash on hand. An extra box of cereal. Some chips. Oh why not that ice cream?

Not to mention eating out and other shopping trips where it was "only" $30 or $20 here and there. It added up fast.

Then the automatic payments that were scheduled. Our iPhone "insurance" of $17 a month PER phone. The Cell phone bill. The Cable bill. My Aflac insurance (the policies I had before becoming an agent are charged to my card...all the others come out of my monthly statement). Prepaid legal (now known as Legal Shield). Send Out Cards*. LA Fitness.

It all added up to a whopper of a bill each month. I still do not know how we've kept our heads above water so long.

First things first...we cancelled the iPhone insurance. We have emergency funds and if we had to replace our phones we would just go with the least expensive functional phone we could afford. Hubby spent quite a bit on a super secure, extra padded case too.

Next went the automatic $150 gym training payments...I had signed up for this a little over a year ago...and it came with a contract. The good news is that I get the lowest training rates (6 appointments a month). But the bad news is that it cost me $150 a month. Plus tax. :( Not cool. So that amount is now $27 for one automatically billed appointment a month. I've got plenty saved up and can cancel now at any time.

Then I started looking for a way to lower our Verizon bill. Amazingly I found out that through my work I could get 20% off. WOW! That is $40 huge. Can't wait for that one to kick in. We will keep making this payment via the Credit Card though because I do want points for bills that are 'static' each month. I take the money out of the checking account at payday and apply it toward the card so no interest payments.

I figure I've managed to trim at least $250 in automatic payments alone from the monthly bill.

As for the food bill...that's another topic entirely. Let's just say the grocery store hasn't seen my Visa for two weeks now...and hopefully won't see it ever again!

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