Its been a while since I've written. My debt reduction plan has taken a bit of a hit the last 2 months. First, I was trying to refinance the house, and had locked in at 4.875%. I decided to not roll expenses into the loan, which meant I needed to come to closing with some cash. I decided to stick with minimum credit card payments for the month of April. Well, my plans unraveled when my FICO dipped to 698 due in large part to Bank of America slashing my credit limit from $24,000 to %6,500.  Also during this period, I needed to move a balance from my ESPM/WaMu card, coming off of a 1.87% intro rate up to 29.99% which WaMu had recently increased from the previous 22% rate. The transfer got complicated. Chase bought WaMu, and since I have a United Mileage card with Chase, they agreed to move my credit limit over to my Chase card.  But first, I had to clear the WaMu balance for that to happen. I split the balance between BofA credit card (consuming most of what was left of my credit limit there), and transferred the remaining $6500 to my Capital One card at 5.99%. I then successfully moved my credit limit from the old WaMu card to my Chase card. Unfortunately, through the quirks of credit reporting, Chase failed to report my new credit limit during the month. Basically, the FICO calculation saw my credit limit drop another $12k because of the consolidation. The net of it is, I was not able to refinance because of a total FICO drop from 722 at the time of locking, down to 698. The drop was exacerbated by a number of credit inquiries I made, including shopping for the refinance, and 2 unsuccessful attempts to get a HELOC on my rental property. I have to say I am very frustrated with the financial/credit system, as my financial position altogether has actually improved due to the stock market recovery, yet my FICO dropped a significant amount. As many of you know, the FICO calculation does not consider your assets (stocks, 401k, home value), your salary, or even whether you have a job at all in its calculation. This is one of its main flaws, but there are many others too numerous to discuss here.

The other area which has set back my debt reduction plan is that I needed to purchase another vehicle. I have a child that just turned 16 and needs a car to drive to practices and work. I wanted to buy a cheap yet reliable car, and I found a 2001 Mazda Protege with 85k miles for $4650. This is my second Protege, and I'm confident this is a good deal and the car will go forever. I didn't want to finance the car. So instead, I was able to scrape together savings from skipping my extra credit card payments. At this point, I have successfully paid for the card by missing Apr, May, and most likely June extra payments to credit card companies. That puts me roughly three months later in my debt-free date, but I feel its worthwhile to avoid having another car payment.