Welcome to How I Save Money . This month the members of the Wealth, Money and Life Network are writing about Interest Rates and the ways in which they affect us. I just made some major payments over to some credit cards and I am proud to say that as of today My Citi visa has been paid off completely.
The interest rate on this card was very high at first and then I got it down to 8.9% , which is still high, but definitely better than what it was before. This means that although I completely wiped out the savings accounts I will no longer be paying interest to this card. The interest rate was killing me and I have been carrying a balance on this card for a LONG time.
I finally got the balance down to zero and I will be operating this card on a strictly cash back basis. I earn 3% on all purchases on this card and I am using it to pay my rent and a host of other bills.
My budget is set up where the check for the amount of the rent goes out of my ING account and is sent to the credit card within a few days of the date of the rent payment. I get the benefit of having my money stay in my interest bearing ING checking account for a few days so that money is working for me.
Since I pay the rent with a credit card, I have a few days where I am not paying any interest on that payment before I send the payment out. This allows me earn cash back on paying the rent (and other bills) while earning interest on the money that will be paying the bill later on.
I am glad to finally be free from paying interest on that card so now I can use it to truly maximize the cash back rewards. It feels good to get rid of debt so that I can focus on paying down more debt and trying to find another way to save money.