Small Victories: Paying Off My First Credit Card

I had a really lovely day yesterday.  After the long Black Friday hours, I was exhausted and maybe starting to feel sick.  It was my day off but it was the last day of the month.  I really felt like I should go in to work, but ultimately I decided to instead stay home and let my body recuperate.  Kirsten recently wrote about finding work-life balance during the holidays, and I feel like I´m starting to find my own balance between really hustling at work, and being happy with the time I have at home.

The cookies we baked

I was torn about what to do but what sealed the deal was when Saturday night Michael took my hands in his and told me to sit down, we needed to have a serious conversation.  I figured he was joking–but who doesn´t get nervous when their partner says that?! I sat with him and with all the seriousness he could muster he sweetly asked if we could bake Christmas cookies together on Sunday.  I laughed out loud and said, of course!  So I decided not to go into work on Sunday.  We made a list of the cookies we wanted to make for our friends and headed to the grocery store.

My favorite ornament

Sunday we downloaded our favorite Christmas albums: Idina Menzel´s Holiday Wishes, Kelly Clarkson´s Wrapped in Red, Charlotte Church´s Dream a Dream, Celine Dion´s These Are Special Times, and The Trans-Siberian Orchestra´s Christmas Eve and Other Stories and got to work on the cookies.  We listened to Christmas music all day, while I baked.  Michael was my sous-chef, chopping, stirring, shaping cookies, playing video games and generally keeping me company.  The cookies turned out really nicely.  We put our tree up, too and well, it was simply a wonderful day.

Today I was happy to head back to work, re-energized, and in the Christmas spirit.  I reviewed our November finances, and I’m happy to report that I’ve paid off my first credit card!

SMALL VICTORY: PAYING OFF MY FIRST CREDIT CARD
FINANCIAL IMPLICATION: $428 + 21.99% APR

Sure, it was a small one, but I’m feeling some great forward momentum right about now. This isn’t the first time I’ve paid a card off in full, but it’s the first time since I’ve started this Odyssey.  More importantly, this is the first time I´ve committed to living credit card free. I feel good about it, because I’m doing well at living comfortably without using credit cards (for the first time ever–since I got my first credit card in 2009), and I’ve even put a little chunk of change in savings. It’s mostly been a matter of staying organized, planning ahead, and doing my best to forsee and plan for irregular spending.

In the past, when I’ve paid cards off, I’ve thought of them as “emergency funds” and continued to use them liberally.  Well now that I’m actually putting real money aside into a savings account for real emergencies, I shouldn’t need the cards anymore. I currently have 4 credit cards. My goal is to eventually only use one and pay it off in full each month. I know we’re a long way away from that, but hey… 1 baby card down, 3 monsters to go! The three I’m not going to use don’t really have good rewards perks. I opened them because they offered 0% interest for 12 or 18 months, but I’ve had them for almost three years now so my grace periods have long since ended.

By PURE luck, my cards with the highest balances have the lowest interest. They’re literally in perfect order, so I’ve never had to debate between snowballing or avalanching. This particular card that I paid off this month only had a $400 limit, and had the highest of my APRs, at 21.99%. I thought about calling Chase to close the account, but I really want to improve my credit score, and I know that having zero balance cards can improve my debt to credit ratio.

I´m especially proud that I´ve moved the debt-free needle from 9% to 12%.  I´m 3% closer to my goal!  I´m happy–even if it´s only a little bit.  And I´ve ramped up my 401k contribution, even if it´s only a little bit.  I like this article´s examples of how because of compound interest, little changes can make or break long term finances–of this I am well aware.  November had its ups and downs–I´m looking forward to what lies ahead.