My credit score dropped 24 points after planning a bachelorette party

Tips for Improving Your Credit Score

I've planned four bachelorette parties in the past five years (and attended five, including my own). I have the planning part down to a science. But this time around I had a little surprise -- my credit score dropped 24 points when I checked it on my way home Sunday night.

Now, I should preface this with saying that the damage is temporary. It's not fair to say the bachelorette party "wrecked my credit" since I've already remedied the cause of the credit score drop — my high credit utilization this month (more on how I fixed my credit later).

In my experience, planning bachelorette parties takes a lot of coordination, a lot of ridiculous party store supplies and a lot of PayPal/Venmo/Chase QuickPay account transfers. Most of the parties have been short weekend trips for groups ranging from six to 11 people, so it boils down to a few major expenses: house rental, transportation, an activity and a dinner out. The other things you end up buying— wine tastings, drinks at bars, lunches and breakfasts — tend to get paid for individually, without a joint tab.

The major expenses often require a point person, though — one credit card to rule them all. Even when you find a great house that can accommodate everyone at a very reasonable price, someone has to pull the trigger and put it on their credit card to reserve the space and, when you're the one (or two) planning the trip, it tends to be you. Then, you collect the money from the other attendees and pay off your credit card immediately.

I've never minded doing this. After all, I write for a credit website, I'm very mindful of my credit, monitor my accounts daily, check my credit scores every month, and am constantly thinking about managing my money. For some people, this would be an understandable burden. After all, a house that can accommodate 11 women for a weekend isn't cheap. If you're already struggling to pay your balance in full every month with just your normal spending, it may not be the best move. After all, you could be short and then face interest charges.

The Hidden Benefit of Bachelorette Party Planning

There is a notable upside to putting all that spending on your credit cards and then immediately paying them off, though -- the rewards. I made $500 off my credit cards last year and paid no interest charges or annual fees. This year, I've already made roughly $150, so I'm on pace to beat last year's total. If you're using the right credit card, you can really rake in the rewards on the group expenses of a bachelorette party. For example, I used my Chase Sapphire card (read a full review here) and got double points on our group's lunch bill this weekend.

At the end of the weekend, I simply tallied up all the group expenses and gave everyone a per-person total they owed me. Everyone transferred me the money that day, easy breezy.

Why My Score Dropped 24 Points

So why did my credit score drop so much, exactly?

I had charged enough on my credit cards that I had a 20% credit utilization this month. That means I had enough charges on my credit cards that I had spent 20% of my combined credit card limits. One thing you should know about my spending habits is that I charge nearly everything to my credit cards and then pay them off in full every month— it's how I make so much money from my credit card rewards. So the bachelorette expenses aren't that whole 20%. But I normally spend around 10% of my limits, sometimes 12%, and this month the extra charges bumped me up to 20% for the first time in a very long time.

How I Fixed It

This is the easy part. I used the money the bachelorette party attendees paid me and immediately paid off two of my credit cards in full. That's brought my total utilization down to about 7% right now. (You can see how your utilization is impacting your credit scores for free every month on I don't plan to apply for any new credit this month, so a temporary credit score drop is something I can weather without issue. A healthy utilization rate is under 30%, but as you can see from my story, it's even better to keep it under 10%. I have a good credit score, and still do after the slight ding, and I want to keep it that way.

Note: It's important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

Related: 15 things you should stop wasting your money on

15 things you can stop wasting your money on
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My credit score dropped 24 points after planning a bachelorette party

1. Cable TV

With the advent of Hulu, Netflix, Amazon Instant Video, and Apple TV, there's hardly a reason to splurge on a fancy DVR system or even basic cable — so long as you're willing to be patient.

Most shows are added at least 24-hours after airing and some networks won't give them up until eight days.

See some great alternatives to cable TV here.

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2. Bank fees

Banks love to slap you with fees at the drop of a hat, but that doesn't mean you've got to put up with it.

"Consider going with a credit union, which are better than banks in many ways, to avoid some of these fees," says Andrew Schrage, founder of

"If you travel abroad often, make sure you use credit cards without foreign transaction fees, otherwise you'll be paying an extra 3% to 5% on all your purchases."

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3. Extended warranties

Retailers push hard to sell you extended warranties — and conveniently pump up their sales figures at the same time.

Don't do it, Schrage warns.

"The only instance I'd recommend a warranty is in the case of a laptop. Otherwise, the warranties themselves can often cost as much as simply buying a used or new replacement for your item, or repairing it," he adds.

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4. The roof over your head

If you're blowing most of your income on a loft in Midtown, you're making a big mistake, says Jeremy Gregg, executive director of the PLAN Fund.

His organization provides loans to low-income entrepreneurs, who Gregg says he often sees spend more than half their income on rent and utilities.

The U.S. Department of Housing & Urban Development recommends spending less than one-third of your income on housing.

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5. Unnecessary smartphone data

"Many of us (including me) pick a cell phone plan, then never check to see if it's the right one for us based on our usage," writes author of "I Will Teach You To Be Rich," Ramit Sethi. "Because the average cell phone bill is about $50, that's $600 per year of money you can optimize."

When buying a new cell phone, Sethi likes to pay a little bit more upfront by choosing the unlimited data and text messaging plan. He then sets a three-month check-in on his calendar, and analyzes his spending patterns after a few months to see where he can cut back.

You can use this method for any usage-based services, he says.

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6. Online shipping

Nearly all retailers offer some sort of option that gets your purchases to your doorstep without additional fees.

Zappos and L.L. Bean are among the rarest breed of businesses offering free shipping on every single purchase, but most companies will demand a minimum purchase.

To help track down deals on shipping, use The site stores information on expiration dates, tells you much to spend to qualify, and lets you search by store name or product.

Otherwise, check out CouponSherpa or Retailmenot, which offer discount codes for free shipping.

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7. Cheap art

Environmental designer Pablo Solomon says picking up knockoff prints and other art is a great way to blow cash for no good reason.

"Nothing sends me through the roof like the art sold on cruise ships and at resorts," Solomon says. "(They're) basically glorified posters being sold as originals."

The best way to score deals on art is to track up and comers, he says. You can nab their art early on and laugh your way to the bank after they've made it big.

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8. Fast food

You're only hurting yourself (and your wallet) if you're feeding yourself out of the bodega around the corner from your home or office.

"I am shocked at how many people live paycheck-to-paycheck and yet routinely spend $10 per day on fast food and convenience store food," Gregg says.

If you're looking for an alternative to brown-bagging it, check out how to shop for the healthiest foods at the grocery store for the least amount of money, and start preparing your own food.

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9. Piecemeal insurance

Buying overpriced insurance for things like accidental death and diseases is an easy way to blow your funds.

"Instead of buying piecemeal insurance policies, get good term life insurance and disability insurance," says Sally Herigstad, a certified public accountant and columnist.

Take a look at the types of insurance you should buy at every age.

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10. Lousy gifts

Personal finance expert Dani Johnson suggests you think twice before rushing out to buy Dad another tie this Christmas.

"You should make a pact with your friends and family to give back instead," Johnson says. "Pool a percentage of money you were going to spend on gifts and give a secret blessing to somebody who is truly in need."

If you want to buy a great gift without completely breaking the bank, check out these holiday gift ideas for under $50.

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11. Weight loss traps

Weight loss pills and supplements marketed as miracles for overweight couch potatoes are most likely traps.

"Not only are there enough pills and potions that you could start a new one each week, but the negative effects on your health outweighs the money you will waste," says nutritionist Rania Batayneh.

"This is a billion dollar industry and the truth is that a lean body does not come in a pill," Batayneh says.

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12. Lottery tickets

"Sure, you can (buy a lottery ticket) every once in a while just for fun, but never make a lottery purchase with any real expectation of winning," Schrage warns.

"The odds are significantly stacked against you, and why waste your hard-earned money on lottery tickets when you could be saving for retirement or treating yourself to a nice meal?"

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13. Brand new cars

"People get bored with cars quickly. They always want a new car and so they're always dealing with a car payment," says certified financial planner Michael Egan. "But it's a hugely depreciating asset. You don't want to be putting a lot of money into something that's going to be worth nothing after a certain number of years."

Look for used car options, which could save you a substantial amount of money. Check out Kelley Blue Book to get an idea of how much you should pay for a used car.

Another option is leasing a car. You can determine whether or not this is a good option for you by following this flow chart.

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14. Subscriptions

Subscriptions — to magazines, newspapers, and the gym — can add up, and oftentimes, we don't use them as much as we had originally planned.

Sethi recommends implementing what he calls the 'à la carte' method, which takes advantage of psychology to cut our costs.

"Cancel all the discretionary subscriptions you can: your magazines, TiVo, cable — even your gym," Sethi explains in "I Will Teach You To Be Rich." "Then, buy what you need à la carte. Instead of paying for a ton of channels you never watch on cable, buy only the episodes you watch for $1.99 each off iTunes. Buy a day pass for the gym each time you go."

It works for three reasons, Sethi writes: You're likely overpaying already, you're forced to be conscious about your spending, and you value what you pay for.

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15. A morning latte

Author of "The Automatic Millionaire," David Bach, coined the term, "The Latte Factor," which basically says that if you ditch your $4 latte every morning, you'd have quite a bit of money to contribute towards savings — about $30 a week, or $120 a month). Over the course of a few decades, that money could grow substantially.

Rather, invest in a nice coffee maker, even if the price tag is a bit steep. Oftentimes, spending more on high quality items can help you save in the long run.

It can seem counterintuitive to make purchases to save, but that's what some of the most successful money-savers do. They're not just buying things, they're investing in things — tools and services — that will eventually save them money over time.

Via Business Insider

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