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03 December 2011

One step out of the pit is a mile in the right direction

Priceless
I worked three weeks of nearly 20hrs of overtime. Yesterday I paid off the smallest of my debts. It was a store credit card with a limit of $250. I started to pay part of it and since I had enough cash on hand, I paid the balance and closed the account.

According to the pernicious counsel out there I should not have closed the account but just let it sit with a zero balance. I guess it has something to do with how my FICO score looks to potential lenders or something. The thing is, I know me. And I know that if I have an account open, I'll use it. But also, being debt free to me means not having any relationship with the debt machine.

One thing I noticed about store credit accounts is that you end up paying a lot more for the merchandise. A $5 pack of razor blades and a $5 pack of razor blades financed are two different things. You get the blades and pay $5 plus tax and if it's cash, you're done. If you charge it, max out your card and pay the minimum, a portion of that $5 gets paid off every month and you are handing the store interest on top of it. Maybe it's a few pennies but they ad up. I'd rather pay cash.

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