Saturday, 18 October 2008

Reducing the Minimum

Having been warned by about some sneaky new tricks from the Halifax people but then forgetting about it until I happened to check the account online - I at once noticed that the upcoming minimum payment was less than half of what I had just paid the month earlier. What they have done is reduce the minimum payment percentage by half, to only 1%. This means you will never really clear your card if you only make minimum payments. It really is madness!
In the passed I have always had direct debits set up so as to always pay my credit cards, etc. on time but have decided to cancel all the direct debits and replace them with standing orders. That way I control just how much money I pay on each bill.
Barclaycard do allow you to set a payment amount above your minimum payment but they are the only credit card I have found to do that.
This is the Mary Hunt snowballing method, you make the same minimum payment on your lowest debt's and then throw the rest of you money at the highest debt. But unlike the general snowballing method you don't reduce the minimum payments each month, you keep them at the same amount. Maybe not every one's cup of tea but it works for me.
As I am down to only three debt payments a month and shortly that will be reduced to only two - it really makes sense.
On to other matters I did break my no spend rule and made a purchase on Thursday - something I had forgotten to buy on Tuesday. But I had a really great meet up with an old friend whom I hadn't seem in more twenty years on Tuesday and so forgot lots of things I had meant to do that day. But I only used the money in my purse - however I now don't have the £5 I like to always keep in my purse. Break one goal and another goal goes down - can't win sometimes.

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