Hand Caught in the Cookie Jar

As mentioned earlier in the year, I'm a fan of App-O-Ramas (AORs) for the income they generate using other people's money. However, you must have self-control, and this year I had to dip into this money. The money the credit cards give you is at 0%, which means no interest accrues while it's in your possession, as long as you make the minimum payments every month. That's why it's not a good idea to lock up this money in CDs or any other investment that isn't quite as liquid as cash savings.

Using just a rough estimate, since I won't know exactly how much interest income I generated with my AOR until the banks start sending their tax forms, I don't think $9,000 is too much of a stretch. That's serious cash, at least for my family. I'll be hit with a pretty fair size tax bill on this money, too.

Back on point, however. I stated I used some AOR money to fully fund my Roth for '06 in the Spring. That wasn't a smart move, and I won't repeat it for '07. But besides the Roth, with two kids in daycare and the stretch of the summer months when there aren't two paychecks, I had to use this 0% money to pay normal bills. I have $27,750 at 0% on two credit cards until they're paid off, and I am paying the minimum 1.5% on that every month. My balances on these cards got so high because our two car loans are on this account (~$8,000 left), many house repairs in the last two years, funding part of a Roth for '06, and just needing extra cash to make ends meet.

So, right now we owe $27,750 in 0% credit card debt. We owe another $13,000 for the roof and other bills that is also sitting at 0%, but has to be paid off by January '09.

The plan of attack is obvious. Stop reaching into the 0% money to pay bills. Keep paying the minimum on the 0% for Life cards. Pay every extra dollar to getting the $13K down by the end of the year. To help myself keep track, I will mark my progress to the right, and update it every month. Hopefully, I can get this debt down to 30K by the end of the year.