Wednesday, March 4, 2009

Budget 03/04 - 03/17

First let me thank my readers for keeping me honest. Sometimes I think you guys are too easy on me but I know I have a ways to go before I can consider myself financially responsible. That being said, even with the shaky job future, I am optimistic that my short term debt is finally being paid off, I am cutting expenses, and sticking to a budget.

So here's where my money will be going for the next two weeks:

Starting Balance = $1146

Emergency Fund - 50
Friend C - 60
Credit Card - 100
Aunt Sallie Mae - 406
Defaulted Student Loan - 260
Nice Collection Agency - 125
Groceries - 50
Misc. - 95

I sent off $100 to my credit card today. I only owe $45 now! I was going to pay the whole balance but I wanted to wait a few days and figure out what my expenses really were for the next two weeks and where my priorities should be.

I am finally going to pay back my friend. It's kind of a weird situation and I know I should have done it sooner.

In the meantime, I have a question for my readers....when I do pay off my entire credit card balance - hopefully soon - do you think they will contact me about increasing my line of credit? Or should I ask them to? Or at least lower my rates? I've had a shady history with them but have been diligently paying at least the minimum for the last 8 months and more than the minimum for the last four months. Any advice would be appreciated. I'm not a fan of credit cards but having this one open is pretty much the only means I have of increasing my credit score.


TeacHer said...

It took a pretty long time after I paid off my whole balance for my credit card company to raise my credit limit - almost a year if I remember correctly. When they did raise the limit, they almost doubled it, but I was surprised by the long lag.


I found that my credit limit increased the most when I was charging a little bit each month and paying it off in full each month. I probably earned over $2K in limit increases over a period of a year or so, and this is when I was in college! Sigh, I was so much more responsible back then! :)


Mommy Saves ALOT!!! said...

Our CC have been paid for for months now and our CC company haven't increased our limits either. I was asking hubby if he should call and ask for an increase!


Shtinkykat said...

My friend's limit was slashed after he paid it off, so don't expect credit card companies to do you any service. You could call to request a credit increase but keep in mind, it could backfire. With a shaky payment history, 8 months of recent regular payment really isn't long enough for the credit card company to feel comfortable, esp. now. I would just lay low.

Did it MY way said...

Cut the credit card up. A higher limit just adds to temptation to use it. Cash is king.When will you youngsters learn.

Anonymous said...

Don't cut the card up! Our world is, unfortunately, highly credit based. You've got to learn to use credit responsibly sometime, and now is a great time. Make a few small purchases each month and pay it in full when the bill comes.

A higher credit limit would be great, it can only improve your credit score.

ldub said...

you know, i keep one active credit card with a benefit i like (in this case, a very low rate, the ability to make payments every day if i feel like it, and airline miles), and, after i went about 6 months on cash only getting my finances in order, i began putting ALL of my day to day expenses (groceries, gas, dog food, etc) on that card and paying them off the next day. as i have been doing that, they have steadily offered me rate increases. now i turn them down, because my credit ratio is under 10% and i don't want to switch into looking risky with way too much available credit, but it has worked. i think i'd recommend another six months with small purchases and immediate payoffs, THEN asking for a higher credit line, repeat for three more months, then ask for a lower rate (or do it in the other order). since husband-elect already owns the condo and you don't need a new car, plus credit scores rebound quite slowly, you've got time on your side - no need to try to jack it up to get a loan or something.

by the way, awesome progress! and good going on being measured even in the excitement of paying stuff off - i would have paid off that whole credit card impulsively and then been bummed at dealing with any budget-busters for the next two weeks! your approach is much better!

Anonymous said...

Good for you girl!

I wouldn't worry about increasing the credit limit. It's a tough economy and I think that CC companies are looking to decrease their liability.

I don't know what the criteria is, they raise my credit limit randomly but I think your focus should be paying off your debt and don't miss any payments, your credit rating will bounce back.

If you need to, keep the credit card open but don't use it (perhaps keep it at home and don't have the info saved online, such as amazon, at all).

- sgreen

Fabulously Broke said...


I think I'd try and ask for an interest rate decrease right now and cite that you are barely making payments, etc... and they may fold just so you don't declare bankruptcy or whatever (you say that as just a ploy to get lower rates)

I would NOT ask for a credit increase, you will most likely be rejected with your credit score not being spotless and your shady payment history.

They are also not likely to be giving limit increases in this kind of economy anyway.

Pay off the card, and keep it paid off then ask again in 6 months to a year. It'll be a nasty road, but in my eyes, the only logical way to improve your score.

(Don't go applying for new cards now, either).

Sallie's Niece said...

Thanks for the advice all. I should note that it's only a $500 limit card with a really crappy APR. My debt/credit ratio is real bad and will remain to be bad for the foreseeable future because of all my student loans so I was hoping they would increase my limit just to make my score go up. I have no plans to use the card, don't worry.

Anonymous said...

Keep the card, make sure you use it at least once every 6 months--otherwise they may choose to cancel it.

It's probably not worth it to call them to ask for a higher credit limit as you run the risk of them terminating the account or raising the APR. When you ask for a higher limit, they do a full review of your credit history.

Anny said...

I'd keep the card and ask for a lower APR. I'd pay off the card and then call them in a month to say you really like their card but the higher APR makes you hesitant of using it for recurring purchases. Credit card companies love to see recurring purchases (like cell phone bills).

This has always been my "lower the APR" tactic and its always worked. After a few months they will probably raise the limit on their own. $500 isn't much.

Maria said...

I wouldnt ask for an increase at all, but just make one small charge each month and pay it off before the end of the month. APR only matters if you carry a balance anyway.
Using it and paying it off monthly WILL help your credit score and that's what using credit wisely is all about. :)

Anonymous said...

I would just sit tight on the card, no credit limit increase, no asking for a reduction in the interest rate for at least a few more months. You may have paid it off, but you still have a a few blotches your credit report. There is the possibility that they could cancel your card too! Shtinkykat is all too correct! I would not worry about the interest rate as long as you pay in full what ever balance you have on the card.

Sallie's Niece said...

Yes I think the concensus is to just pay off the measly $45 and then just sit tight. Hopefully they'll offer me a balance increase after a while. Maybe if I start using it a little and paying it off each month? I don't even get any rewards on the card, it kinda sucks...but if we're gonna be buying a new place in a few years I want my credit to be improved.