Best way to pay down CC's after unemployment?

[Anonymous]

I'll try to make this explanation short, but any advice is greatly appreciated.

I graduated from law school 2 years ago and make $165K.  My TU credit score is 675, but was ~730 before I ran up some CC debt while unemployed.  1 late payment 4 years ago, but clean credit other than a ridiculously high utilitization rate (see below).

-$140K in school loans (between 3% and 5% currently, though $35K of it could float to around 8% theoretically)

-$16K car loan at 6%

-$1K furniture loan at 0%

-$9K on BOA CC at 29% (cl = 9500) and $8500 on Discover CC at 19% (cl = 9000)

-Rent apartment and no significant assets to my name that might get me a decent secured loan

The BOA CC debt is largely from when I was in school, though I had begun to pay some off.  I originally applied for the Discover CC last July when I was still employed and had about $5K on the BOA card.  I got the 0% introductory rate on the balance transfer which expires next month.  I was unemployed from August till February (with 3 kids) and ran up significant CC debt, but am now back in a great job.  Just wondering if anyone has any advice as to the best way to go about paying these cards off with the least amount of interest.  Currently I would need to pay about $700/month to pay off in 3 years (I can do this comfortably, but it pains me to think how much interest I am going to be paying).  I plan on calling BOA to see about a lower rate, but I am not sure how low they will go for me.  What are the chances anyone would give me another 0% balance transfer introductory rate?

Thanks in advance.

[Anonymous]

Just called BOA and they say they can only bring it down to 25%.  Seems ridiculously high to me. 

[unctarheel08]

pay off your high interest cards first, then next highest, then next highest and so on. i would put all of my money towards the highest interest card until it's paid off, while paying the minimum balance on the rest of the cards and continue until all the cards are paid off.

so...

1) BOA

2) Discover

3) Furniture (assuming the 0% is for a certain number of months, and not going to be there forever)

3) Car

4) School Loan

-waystinthyme

[Anonymous]

Thanks. 

I have received offers for 0% Capital One Platinum card, which would be great as long as the CL is more than $300, which would not make it worth it to pay the membership fee.  If I could move a big chunk of the CC debt over to that card, that would be great and would save me a lot of interest.  Anyone have any idea of how I might get an idea of how high my CL might be before I apply?  Slightly unrelated question: the Capital One offer indicates that there is no balance transfer fee, so I guess the only fee is the membership fee of $39.  Does that sound right?  When I transferred my balance to Discover I think I paid a balance transfer fee of $200.

[MarineVietVet]

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@Anonymous wrote:

Thanks. 

I have received offers for 0% Capital One Platinum card, which would be great as long as the CL is more than $300, which would not make it worth it to pay the membership fee.  If I could move a big chunk of the CC debt over to that card, that would be great and would save me a lot of interest.  Anyone have any idea of how I might get an idea of how high my CL might be before I apply?  There is no way to know ahead of time. That's the Catch-22 part of applying. You can't know what the CL will be until the application is processed.

Slightly unrelated question: the Capital One offer indicates that there is no balance transfer fee, so I guess the only fee is the membership fee of $39.  Does that sound right?  Yes the only fee would be the $39 annual fee. How long is the BT offer for? 6 months? A year?

When I transferred my balance to Discover I think I paid a balance transfer fee of $200.

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I tend to agree that the best way to get those balances down is to attack the BoA account first with every spare dollar you have every month but I would also pay more than just the minimum on your Discover account. Paying only the minimum every month in these hectic credit days can make a lender very nervous. I would pay about 5% of the balance each month and even that might be a little low. Other posters might suggest a different amount.

I know firsthand how slowly things can seem to move when you are rebuilding but seeing steady progress each month can be very satisfying. Getting into credit trouble can happen very fast but getting out of that same trouble can take much longer.

Take in all the advice you get and decide what you think will work best for you. There is no one size fits all approach. And let us know how things are going. Success stories give other people hope and inspiration.

From a BK years ago to:
9/09 EX pulled by lender 802
3/10 EQ- 800
4/10 TU -772

You can do the same thing with hard work

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