Credit Card Debt

There's a lot of talk about the credit market and the result of upcoming changes in credit regulations; in my case, my card is from my credit union and has a small credit line, though a fairly high interest rate. Someone much more financially smart than I said that credit card interest isn't a problem until you carry a balance of more than $1,000. Currently, I have a balance, though in the last year, I have not carried a balance; I try to make one purchase on the card each billing cycle but think I missed one.

My current balance is a result of a blowout the other day and a trip to the tire store, where I made an unplanned purchase of two new tires. Of course it happened in the middle of my pay cycle, so I didn't have a whole lot of unallocated funding; I get paid every other week, so pay dates change monthly, but my student loan comes out of my account on the same date each month. It's meant to come out of the second paycheck in the month, but this time it didn't work out that way. The money is scheduled to leave my account two days before payday. And I have a substantially similar sized check outstanding that's making me nervous. I have money in savings and am only concerned about whether it gets pulled into checking. So far that large check hasn't cleared and I hope it holds off until payday. At that point, I know I'm fine, as my next bills aren't due until more than a week after payday.

Now that my tax return took care of some small outstanding debts, I'll be in a much better financial position, once that big check clears. My total monthly payments have gone down by $400 for the moment. Because I want to buy a house, I'll put as much as possible into savings. Theoretically I would be able to pay off my bar loan next year, upon receipt of my income tax refund; while the interest rate is lower than a mortgage would be, the interest isn't tax-deductible so it makes more sense to eliminate it first. It's also my smallest payment. Whether or not I buy a house, I would like to pay off that debt as soon as possible.