How I Saved $1000 in Interest

Interest sucks. When I charge something on my credit cards I always neglect to think about the interest that purchases are going to accumulate in the long run. I say to myself “Self, that $200 price tag isn’t so bad, I can pay that off within a month” and never think about the fact that the $200 gadget is eventually going to cost me $230 by the time it’s paid off. Multiply that by however many items with a $200 price tag and you can see how it’s gotten out of hand.

My non-so frugal spending habits of the past few years combined with a wedding and a business has taken my conservative debt and has spiralled it into an amount that I am queasy thinking about.

My credit card has gotten out of control – I’ll admit it.

Big shocker – Gabby has poor credit management issues… don’t we all? I can’t really pretend to be so hard done by, I did it to myself so I need to fix it, cause I’m pretty sure you aren’t going to fix it for me (could you though? That would be awesome and I promise you could come over and be fed whenever you wanted… no? Well it was worth a shot).

Therefore I decided that since finances make up a huge part of my challenge I’m going to do something about it.

First things first – I made myself a budget and I’m determined to stick to it starting in September. Not only does this budget cover cost of living and all those fun things like groceries and baby stuff, I’m also being realistic and allowing myself some mad money and money that I know will eventually creep it’s way out of my wallet (helllooo yarn addiction!)

And, since I know that buying a house will be in my near future, I also budgeted out some savings so that I know we can at least cover the closing costs when all is said and done (my amazing hubby, bless his awesomeness, already has an amazing saving streak in him so no worries there).

Yeah, yeah blah blah… what the heck does this have to do with me saving a butt load of money in interest?
Answer? I got another credit card.

Wait. Doesn’t that defeat the purpose?

Maybe…. but I also have the good fortune to have amazing credit. I keep track of mine by using an online service called TransUnion. You pay a fee but it’s so worth it. I totally suggest everyone check their own credit at least once a year.

The good thing about having all those past debts and paying them off, a good job, a higher than average income and the ability to pay a bill on time has given me an awesome credit score. Lenders love me! Mostly because they want my money but I like to pretend it’s because of my charming wit and sparkling personality.

Keeping in mind that my sparkling personality doesn’t count for much in a lender’s eye I used something they do pay attention to – my awesome credit score and my amazing credit history. Using these I applied for a credit card that most don’t come close to being approved for. A credit card with an itty bitty tiny interest rate and a balance transfer rate that blows every other credit card out of the water. So instead of paying 11.99% for my debt (which, granted is still a really good rate) I will now be paying a measly 5.99%.

This one little thing has turned my mountain of debt into something that I can easily handle and will be saving me about $1000 in interest – money that I didn’t even spend in the first place!

So my main lesson (lesson? I guess I fashion myself a teacher now….I should get some horned rim glasses) is to treat your credit score like the precious commodity it is and be smart about your credit history. You may not have the amazing credit that I have right now but if you take care of it, eventually you’ll be able to wield your credit like the club of destiny it should be. That’s right, I just said club of destiny.