Has anyone ever tried the “adding good credit” technique? I did some research and everyone swears by it, but I’m wondering if anyone out there who has actually tried it can share if it helped or didn’t…

Turns out that the answer to the question in my last post was predetermined by the Zales 12 months interest-free promotion that would be expiring on May 18, 2008. Time flew by so quickly; I had only been making the minimum payments and enjoying the finance-charge-free bills. I totally forgot about it. So, we still owe $4700 on it and have roughly 8 weeks to pay it off. I. Can. Do. This.

But you know, the saying is true: when it rains it poooours. We just found out the DH’s job may not be as secure as once thought. Upon hearing this, first thing we did was analyze how we would do financially without it. It didn’t look good. To top it all off, I went to my tax guy, praying for a bigger refund than last year, and left praying that we just didn’t owe anything. Turns out I claimed too many exemptions on DH’s W-4s and not enough taxes were being witheld. NO WONDER, I thought. I make considerably more than he does, yet our paychecks came out to be right around the same amount. I figured it was due to the fact that our medical benefits came out of my paycheck alone, it never occurred to me to check the paystub to see how much federal and state taxes they were taking out. Crap. Our accountant told me to give him until Tuesday. In the meantime, I am praying for a miracle, that my house, kid, babysitter fees, donations, etc. are enough to compensate for my stupidity. Tuesday we’ll know!

Okay! I know it seems like I’ve forgotten about this blog, but I haven’t. I haven’t abandoned my mission to get out of debt this year. The time has finally come: I get paid tomorrow night and I will actually be able to put a good chunk of it to paying off my debt!

The past couple of paychecks have been used mainly to catch up on paying some utilities and also for unfortunate, unforseen, unwanted events. It has been discouraging, but I know once I make my first dent in my credit card bills it will feel liberating and motivate me to be more aggressive.

I’m torn though. I don’t know what strategy to follow. Every time I think I’ve decided on one, I go right back to contemplating it all over again. It’s really a no-brainer, though. We have one credit card whose balance is so high, that our minimum payments are around $350/month, and out of that $350, $220 goes just to our monthly interest! It’s insane. I would be crazy to not try to at least cut the balance in half fairly quickly. But on the other hand, we have a couple of lower-balance credit cards ($2K here, $4K there… etc.) that can be paid off in around 4 - 6 weeks; and just the thought of actually being able to eliminate one credit card completely and never have to make a payment on it ever again is oh-so-tempting.

If anyone is reading out there, what would you do? Pay off the smaller balances first? Or try to pay off the highest interest rate/balance card first? Hurry! I make my first payment tomorrow.