Thursday, 18 September 2014

Credit Card Tricks

This morning was interesting. I woke up and checked my emails and saw that CC2 was increasing my credit limit from £6,800 to £11,800 from November. That is a £5,000 increase! 

This made me think, I started to aggressively pay off my debt in February 2014. Since then all three of my credit cards have increased my limits. CC1 limit is now £12,000 and CC3 limit is now £4,200, come November (based on today's debt), I will have £17,767.99 of available credit. This is potentially a problem for a spendthrift like myself. That is a lot of money to spend......

I've learnt my lesson - I promise. 

Now I know credit card companies will often increase limits on a yearly basis, however, CC3 had not increased my limit in 3 years. I suspect it was because I did not use that card during those 3 years. However, within weeks of me transferring a balance to that card, my limit increased. Surely the credit card provider should be thinking that if I have transferred a balance that I may be in financial difficulty and the last thing I need is access to more credit? Or is the prospect of me spending that money and paying interest just too much of an incentive to increase my limit?


Credit card balances seem to be a double edged sword. My understanding is that because I have had each of my credit cards for a long time (two for over 10 years), and have always made my minimum repayments (even, if at times, late) I am rewarded for this by an increase of my credit limit. The high balances I have in turn now result in me having a good credit record (apparently if I have decent limits, I must be 'good for it'). I find this rather bizarre. Now I know I am the one who spent the money and only I am responsible for my spending, but, my credit limits have continually been increased despite the fact that I have consistently had substantial balances. 

This has encouraged my spending as the money was there available to me. 

To put this into perspective CC1 initial limit in 2001 was £500, it is now £12,000. My highest balance on this card was £9,775.08 in December 2013 with a limit of £11,000. Yet my limit has still been increased. 


I do have a bit of a bug bear with CC1. Since I started paying off my debt (I have concentrated on this card as it had the highest balance and had the highest interest) my credit limit has increased and I am continually being bombarded with letters, emails and text messages about transferring balances to it and transferring money to my bank account. I had never been offered these 'opportunities' until I started paying off my debt. 

As it transpires, the increase to CC2 is somewhat useful to me. I need to transfer the balance of CC1 to keep the 0% interest and I was not especially keen on opening a new card and will now be able to transfer it to CC2. When CC3's 0% interest period expires in February I can then transfer it to CC1 or CC2. But long term, I only want one card so two of these will go eventually. 

Has your credit limit increased once you started paying off debt? Has the increases encouraged your spending? What do you think?

* Photo courtesy of www.freedigitalphotos.net 

This post is part of Financially Savvy Saturdays. Check it out!!


brokeGIRLrich

Tuesday, 16 September 2014

Random Facts about Me


I love reading the 'random facts' post so I thought I would jump on this bandwagon, so here goes:- 


One 

I'm a secret goth! This wasn’t so secret in my early twenties, but it is a secret in my early 30’s. I am still goth at heart and goth up for special occasions but otherwise this side of me is literally in the closet.

Two 

I love cats! I have one cat with a rather unique name (which I cannot mention as I will be outed). I would love more but my cat is a little spoilt and is far too use to being an ‘only child’. I think if I found him a brother or sister, he would cry.

Three

I have dermatillomania and trichotillomania. Dermatillomania is a repetitive and compulsive picking of the skin which results in tissue damage. In my case I predominantly pick at my scalp but pimples, nails and any scabs in general will be picked at. Trichotillomania is hair pulling. As a child I lost a lot of hair due to this. Now it is primarily my eyebrows which are pulled out. Both are very annoying conditions. As my scalp is rather sore at the moment I have been unable to have my hair cut or dyed for 3 months. I also spend a lot on eyebrow pencils and powder to fill in the gaps from pulling them out. I am naturally a rather ‘stressed’ person and being a lawyer is not compatible with these conditions. However, I also find that just reading books is a trigger as I don’t realise what I am doing whilst reading. I therefore rarely read books these days as a result 

Four

My favourite film is the Wizard of Oz. I refuse to own it on DVD as I like to make it an occasion when it is on TV (usually around Christmas) so I can sit there with some snacks and enjoy it

Five

I love Madrid. It is such a beautiful City. Once my debt is paid off, I will definitely be visiting again

Six

I am slightly obsessed with lip balm it’s a strange addiction but I always seem to end up buying them and become a little panicked if I don’t have one in my bag (hence why I buy more

Seven

I don’t love shopping like I use to. This is a good thing as a lot of my debt is from buying clothes/shoes/handbags/cosmetics that I didn’t need (except lip balms of course, I always need them). In fact, I generally hate going to the shopping centre these days, it is far too busy and there is too much choice

Eight 

I hate peanut butter! I hate it with a passion and whoever thought of putting it with jelly/jam?! Crazy! (I apologise to my American readers as I understand this almost has national dish status!)

Nine 

I love a 70’s style buffet one with prawn cocktails, pineapple and cheese on sticks, sausage rolls and a prawn ring. Vienetta to finish it off! The more retro the better

Ten

I want to jump off anywhere high. I love going up tall buildings for the view, but I always get the urge to jump off just to see what it is like. Don’t worry, I don’t have any suicidal plans, I just always thinks when up high ‘I wonder what it would be like to fall’. I should probably do a parachute jump/bungee jump to get this out of my system in a controlled manner.


If you would like any further elaboration, just ask! 



Friday, 12 September 2014

Fixed Repayment

If you are reading my blog then I expect in general that you are either in the same boat or have been in the same boat.

It seems to be common when reading other debt blogs that paying debt is something which preoccupies bloggers. I certainly notice that I am much stricter with my spending when I am blogging regularly and whilst reading other personal finance and debt blogs. During the summer and my RSI episode my spendthrift habits began to creep up on me again (particularly buying magazines and lunch/coffees). I am taking steps to try and nip this in the bud and am slowly getting there.

On a positive note I am finding that making a fixed repayment to my credit card each month is assisting in paying off my debt. I have three credit cards and due to the amounts I have already paid off, and the fact that all my credit cards are on 0% interest rates, my minimum repayments are now roughly £50, £50 and £80 each month. However, I always pay £280 per month for the £80 card (aka CC1) so at a minimum I am over paying by £200 (more than double of my minimum repayment). I like this method and I recommend it. It is funny how when I work my budget out every month I automatically allocate £280 to my debt repayment. I don’t have to but my mentality is that that £200 is for debt and nothing else.

The other advantage to me with making a fixed overpayment is that if, like last month, I need some extra money, I have a spare £200. It isn’t the same as an emergency fund, but it is reassuring in knowing that I can allocate that £200 to other things if I absolutely have to.


How do you/did you manage and prepare your debt repayments? What method do you use?