I’m super excited that the first BargainBabe.com reader, who I’ll call Joanne, anonymously submitted her credit card bill to receive free, constructive, and supportive advice to reduce her credit card bill! I have nine suggestions for Joanne that will shave hundreds, of not thousands, of dollars off her credit card bill of $4,985.82.
My offer still stands for anyone else who wants help lowering their credit card spending (see below).
Let’s start with the positive spending decisions Joanne is making.
- She’s good at returning things, from big ticket items to small purchases. This is more significant than you may think, because a lot of shoppers feel guilt about returning items even when they are using a store’s return policy as intended. It also means Joanne recognizes that it’s worth her time to return unwanted items. You go girl!
- She shops at several stores known for their low prices, including Wal-mart, Smart & Final, Amazon, Michaels, and Super Cuts.
- She buys Groupons, which are fabulous deals as long as you use them.
- She buys a lot of groceries, which means she cooks at home often. I wonder if she uses any of our recipes.
- She has a rewards card and is earning quite a lot of points!
From looking at Joanne’s credit card bill, I noticed a few trends, good and bad.
- She uses her credit card almost every single day, sometimes as many as seven times a day.
- She shops at a lot of different retailers, which could indicate she is eschewing brand loyalty to compare prices.
- She shops at high-end stores (Nordstrom) and low-end stores (Walmart and Smart & Final). This reinforces my hunch that Joanne is not just concerned about price, but is value-conscious.
- She had 15 purchases over $100, usually for groceries or medical expenses.
- She likes to go to Target a lot.
- She makes frequent trips to various grocery stores.
What are things Joanne could do differently to lower her spending?
- Chose one day a week where no matter what, she does not use her credit card. No lunch out, no Starbucks, nothing. Just cutting back one day a week will punch down her bill noticeably. I should know, my month-long spending moratorium was a real challenge.
- Consolidate trips to Target. Joanne made 18 separate purchases at Target on 12 different days (there were multiple purchases on some days). My hunch is that on many of these trips, she went to Target to buy one or two things on her list, then got sucked into all the great merchandise. It’s certainly happened to me a LOT. If Joanne reduced her Target shopping trips to once a week (she could even earmark one day of the week to shop the bullseye), she would likely reduce her overall Target spending significantly because she would only go to Target FOUR times a month, not 12 times.
- Ditto for the grocery store. Joanne had 21 separate charges at grocery stores. She shops at different grocers, which indicates she goes where the best prices are, but why in the heck is she buying groceries 21 times a month? Make a grocery run once a week, even if requires a little meal planning. It’s just too tempting to put other foods into your cart, even if you’re just there for a gallon of milk.
- Eat out less. There were 21 charges for restaurants and fast food (not including coffee shops). Pack a lunch or even bring a microwaveable lunch, which is still cheaper than eating out.
- Make her coffee at home instead of relying on Starbucks. (Joanne checked out at coffee shops nine times). Not only is making coffee at home a lot cheaper, but you won’t be tempted by the tasty muffins and sandwiches they sell.
- Refuse to pay for parking. To be fair, only one parking charge showed up, but it’s still an area of savings Joanne could tap into.
- Buy discounted gift cards at PlasticJungle.com for the stores she shops most frequently at, including Target and CVS. Right now, gift cards for Target are selling for a 6.5% discount. CVS cards are selling for 7% off the card value.
- Skip the carwash. I know the culture in some cities is very car-focused, but why not shower your car at home? Or pay a kid a few bucks to do it?
- Pay off her bill in full. Joanne’s bill includes $44.14 in interest charges (at 13.24% interest). From her bill, I can tell that she has paid off the bulk of a past bill, so perhaps she slipped up and forgot the due date (in which case I’d call and ask for a refund on those interest charges), or paid slightly less than what was due (which often means you get charged interest on the entire amount charged). I’m relieved that Joanne pays more than the minimum, which can lead to a 68% markup!
What spending advice would you give Joanne?
As promised, here’s how to get FREE feedback on cutting your credit card bill.
1. Grab a recent credit card bill or print it out online. With a black sharpie, cross out all sensitive information, including your name, address, credit card number, and anything else you don’t want to share. All I need to see is the charges. Scan your bill and email it to julia at bargainbabe dot com. You can even create a separate email address to email me your scanned credit card bill so I will have no idea who it is coming from!
2. Or snail mail it to me:
PO BOX 103
Newport, RI 02840
Whether you are deep in credit card debt, or just want another set of eyes to find ways to trim your expenses, I can help. I’m an expert in everyday savings advice and having been helping readers save thousands for more than six years. With my advice, one reader bought her home in cash!
DIsclosure: I am not a CPA and have no formal training in saving money. I use common sense and frugal skills learned over a lifetime to save 26% of my income each year.