Even though it wasn’t the post-graduation dream job I’d hoped for, my four-year-plus stint at Sky Bank has helped me learn about the world of finance, which is good. Sometimes I forget how much of what I’ve learned can be applied to my daily life until someone reminds me.
I wouldn’t call it a resolution, exactly, but one of my medium-term goals is to reduce my credit card debt. I have… *does some math* …over $7500 in credit card debt spread across four cards, with APRs ranging from 13.24% all the way up to 19.80%. This is unacceptable to me at this point in my life, so I decided to start with one and pay it down. I haven’t defined my goal yet, i.e. how much and how soon, but I at least have a focus.
Two of my cards have similar balances, but the one with the higher balance has a significantly lower interest rate. I asked Aaron earlier this week which one he would pay down first, and he wasn’t much more sure than I was. Today, I asked James at work, and he suggested that I figure out which one was accruing more interest, and pay that one down first.
Holy shit. I *do* know how to calculate that. In my sleep.
So, for each card, I took my balance, multiplied by the rate, divided by 365 days in a year, and multiplied by 31 (actual) days in a month. It might not be the exact same way the credit card companies figure my interest, versus how certain loans work, but it was a ballpark figure that I could use for my own devious purposes.
Turns out that the lower balance, higher APR card accrues just under one dollar more interest per month than the higher balance, lower APR card. So, my initial decision was supported, and I’m on my way to having lower credit card debt. w00t!
Thank you, Sky Bank, for teaching me at least one relatively valuable life skill. That, plus I know how my mortgage works, how checks clear (or don’t clear), and how electronic payments are posted. Yay for unexpected jobs?