Capital One, You’re Going Down!

Last month, I had made a final payment on a loan – so I thought (more on that in another post). Now, I have a EIP payment with my current phone and my carrier which has one or two payments remaining of $25 each at 0% interests, it would seem as if I have funds that was once to a loan now available for something else.

This will be a Capital One Credit Credit which is currently used to address automatic bills after the first week. However, there has been issues that put me in using the card for other reasons as well. This has made me have a high balance due (in comparison to the $500 line of credit). However, with the loan out of the question, I will be able to essentially double my minimum monthly payment to them.

Capital One had a minimum payment of $25 – $35. However, each and every month, there is $65 leaving the credit line for a few bills. So, my solution was the minimum payment + what went out which typically meant about $100. I always tried to pay more out, but not always possible. Now with the loan payment taken care of, that money will go to the credit card.

There are a few things that needs to be addressed. My dogs should get a check up, which I will plan to do in December or January. I will also want to replace my phone, and from a technical standpoint, it is almost a necessity. This will delay my efforts of course.

By the end of the week, I will expect to have available credit of $325, but later this month, $65 will come out. Also, I will be waiting on a check from One Main Financial (on another blog posting). That check will go to the credit card as well. I will hope at the end of November, I should see available credit of $375.

In December, I will pay out $125 to bring my balance owed to $0. As bills will come in to the card, I will then pay the card those balance striving to keep the balance to $0. I will be putting money aside to cover for large transactions such as my dog checkups, and the phone. My expectation will be to apply $300 per month. This means that I will have about $175 in reserve to address the vet and transportation.

In January, I will have two choices to consider. Choice 1 is to pay $500 + fees and taxes for the Nexus 4 from T-Mobile, or to buy the Nexus 4 at Google Play for $350. Since I don’t think there is a physical presence of Google in Pennsylvania, I think I won’t have to worry about $35 worth of sales tax. And since I won’t be buying from T-Mobile (most likely), there is no $18 upgrade fee, nor an extension on any contract.

Unless the checkups will be more than $175, I would have only paid out $60 for bills. This will mean I will likely use the credit card to pay for the phone, and apply the $240 on standby for the phone and insurance. This will be a serious impact on the card as the phone will be $350. I’m assuming $25 for S&H, and $100 for the insurance for 2 years. That will mean I will have a balance owed of $240. This should be addressed hopefully in full in February.

So what of after February? Well, I will intend to move all of my automatic payments to the Capital One Card. This will include Crash Plan, Dream Host, eMusic, Hulu Plus, Netflix, and Second Life to the Capital One card. This will increase the money that is being reduced on a monthly basis to $95. This will make accounting these bills easier as everything is paid to one account rather than 5. All of my other bills including the Capital One card will be paid by my instruction usually on the first of the month.

This in the end will actually help me. First, my T-Mobile bill will be reduced. I will not have a proposed $15 EIP (Nexus 4) after paying out $250. I also will not have the $8 insurance fee. That is almost $25 that can go elsewhere. That alone is a 2 week supply of dog food. Second, my finances will be easier to deal with. I instruct payments to go out to various companies (rent, electric, internet, etc), and the credit card handles automatic payments. If I had a bad month, I will simply pay a minimum balance, and make up for it in future months. This means almost no chance of over-draft.

This will also improve my relationship with Capital One. Unlikely, but possible that the credit limit will be increased. This will mean I will be able to push for higher purchases such as a new tread mill for the dogs, and not have to try to juggle it with two cards, or invest in Amazon Gift Cards.

As my credit card only has a balance due of the bills, and I pay that out regularly, this will mean the extra funds devoted to them can be put into savings to set up for an emergency fund in case the dogs got sick, or I need something that is normally beyond my minimal budget. The crappy quality of life will continue, but maybe I will have something to show for it. I won’t be able to have more than $2,000 in the banks as that will threaten my income, but it will be a while (if at all) before I will have to worry about that.

I will still be looking to cut down bills even more, but the credit lines I will have that are still active will be addressed. This will mean that future bills means no interest charges. As I maybe able to build a savings account, it will be linked to my checking account to prevent any chance of over-draft protection. However, this will be very unlikely since all automatic bills will go through the credit card, and the online bill pay actually calculates the bills vs. the account balance. I also set an alert for anytime the account goes below $50 as I am paranoid like that. If I receive such an alert, it will be time to use the credit card, and then pay as possible or at the first of the month.

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