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Regular Contributor
hautemama
Posts: 104
Registered: ‎11-14-2007

Credit card question

Hi everyone! I currently have a few high interest credit cards that are maxed out.  Any advice given would be appreciated. I am paying down all credit cards slowly, and would like to know how I should do this?  I currently have:

 

Capitol one $1050 CL, balance 1022 APR 29.4%

Discover $1100 CL, balance 1073 Apr  19.99%

Nordstrom $1500 CL,balance 1258 Apr 14.9%

Chase $2500 CL, balance 2407, APR 18.24%

Hooters $2100 CL Balance $1800 Apr 25%

 

I have just recently made a $500 payment each to Capital one, discover and nordstrom (cutting it down to about 50% of the balance)

Also, I would eventually like lower interest credit cards, and maybe do a balance transfer in the future.  Which credit cards for these companies, in your opinion are the best? Is it possible to call these companies and request for an upgrade or change to different credit card (without running my credit).  Thanks!!!

Valued Contributor
bs6054
Posts: 1,673
Registered: ‎11-11-2012

Re: Credit card question

There are two commonly suggested models for paying down

 

a) Pay off the highest interest rate first.    This reduces the total amount you pay in the long term

b) Pay off smallest balance first.   This is good for some people as it gives a feeling of accomplishment when a card goes to zero.  If you have a large balance on your highest interest card, some people get discouraged with strategy a) as nothing much appears to happen (the balance goes down slowly)

 

And there are other approaches but these are the most common.

Valued Contributor
SnackTrader
Posts: 1,563
Registered: ‎09-15-2012

Re: Credit card question

[ Edited ]

hautemama wrote:

Hi everyone! I currently have a few high interest credit cards that are maxed out.  Any advice given would be appreciated. I am paying down all credit cards slowly, and would like to know how I should do this?  I currently have:

 

Capitol one $1050 CL, balance 1022 APR 29.4%

Discover $1100 CL, balance 1073 Apr  19.99%

Nordstrom $1500 CL,balance 1258 Apr 14.9%

Chase $2500 CL, balance 2407, APR 18.24%

Hooters $2100 CL Balance $1800 Apr 25%

 

I have just recently made a $500 payment each to Capital one, discover and nordstrom (cutting it down to about 50% of the balance)

Also, I would eventually like lower interest credit cards, and maybe do a balance transfer in the future.  Which credit cards for these companies, in your opinion are the best? Is it possible to call these companies and request for an upgrade or change to different credit card (without running my credit).  Thanks!!!


So financially, it is ALWAYS more beneficial to pay the highest interest first.  That will save you the most money per dollar.  It is a mathematical fact.  I recommend this method.

 

However, for psychological purposes, many people advocate the snowball method to make the person feel better about paying off their debt.  The snowball method involves putting all money towards the lowest balance first, and getting that account down to $0.  This way, it will feel like you are accomplishing something.  This method, however, may end up costing you the most in interest charges.  So I do not recommend this method.

 

If you are worried about your credit score the most, you should be trying to get all of your balances under 50%, and as many under 30% as possible.  I also do not recommend this method because it could end up costing you a bunch in interest over time. 

 

My suggestion is to change your spending habits to try to save money until you have your debt paid down.  You have obviously hit a few bumps in the road, and I'm not implying that any of this is your fault.  Sometimes life just happens.  But it is important to know that only YOU can fix this, and you have to be proactive in doing so.  Pinch some pennies, and turn over the couch cushions - whatever you do just work towards paying this down.  Try using debit cards and cash for a while.

 

FInally, Chase Slate has an excellent 0% APR for 15 months and 0% Balance Transfer fee offer going on right now.  Chase has a pre-selected offers section on their website you can use to see if you have been pre-approved for the card.  Unfortunately, your Chase balance won't be able to be transferred over to that card.

 

Good Luck!

 

 

Edit: bs beat me to it...


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Senior Contributor
Wolf3
Posts: 3,198
Registered: ‎01-24-2010

Re: Credit card question


hautemama wrote:

Hi everyone! I currently have a few high interest credit cards that are maxed out.  Any advice given would be appreciated. I am paying down all credit cards slowly, and would like to know how I should do this?  I currently have:

 

Capitol one $1050 CL, balance 1022 APR 29.4%

Discover $1100 CL, balance 1073 Apr  19.99%

Nordstrom $1500 CL,balance 1258 Apr 14.9%

Chase $2500 CL, balance 2407, APR 18.24%

Hooters $2100 CL Balance $1800 Apr 25%

 

I have just recently made a $500 payment each to Capital one, discover and nordstrom (cutting it down to about 50% of the balance)

Also, I would eventually like lower interest credit cards, and maybe do a balance transfer in the future.  Which credit cards for these companies, in your opinion are the best? Is it possible to call these companies and request for an upgrade or change to different credit card (without running my credit).  Thanks!!!


I suggest you pay off the Capital One card first and the minimum on all the others.  It is the most expensive interest.    Then only use that card for your new charges and Pay in full by the due date.  This allows you to make use of the grace period and not pay interest on new purchases.   Then pay them off 1 by 1 in order of interest rate.   Once you get a card paid off so you can use it's grace period,it can be used for new purchases as well.   

Established Contributor
ccnewcc
Posts: 560
Registered: ‎09-29-2012

Re: Credit card question


hautemama wrote:

Hi everyone! I currently have a few high interest credit cards that are maxed out.  Any advice given would be appreciated. I am paying down all credit cards slowly, and would like to know how I should do this?  I currently have:

 

Capitol one $1050 CL, balance 1022 APR 29.4%

Discover $1100 CL, balance 1073 Apr  19.99%

Nordstrom $1500 CL,balance 1258 Apr 14.9%

Chase $2500 CL, balance 2407, APR 18.24%

Hooters $2100 CL Balance $1800 Apr 25%

 

I have just recently made a $500 payment each to Capital one, discover and nordstrom (cutting it down to about 50% of the balance)

Also, I would eventually like lower interest credit cards, and maybe do a balance transfer in the future.  Which credit cards for these companies, in your opinion are the best? Is it possible to call these companies and request for an upgrade or change to different credit card (without running my credit).  Thanks!!!


I agree with everything that has been said.  So I'll only this:  

 

As far as spending goes, if you have a cable bill (that isn't bundled) could you cut out that monthly expense?  What about the newspaper?  I have family members who still get a newspaper delivered (I think it is a waste of money, but they are stuck in their old ways).  Turn down the heater and wear a jacket/blankets when at home.  etc.  

 

There a few ways to cut down on expenses around the house for a few months while you focus on paying these cards down.  I'm not sugessting you haven't thought about this, but just merely stating.  Cuz with less money going out and more money coming, your household budget automatically seems bigger with little effort. 

 

 

 

 

 

 

 

 

 

 

 

Mega Contributor
LS2982
Posts: 15,434
Registered: ‎04-09-2011

Re: Credit card question


Wolf3 wrote:

hautemama wrote:

Hi everyone! I currently have a few high interest credit cards that are maxed out.  Any advice given would be appreciated. I am paying down all credit cards slowly, and would like to know how I should do this?  I currently have:

 

Capitol one $1050 CL, balance 1022 APR 29.4%

Discover $1100 CL, balance 1073 Apr  19.99%

Nordstrom $1500 CL,balance 1258 Apr 14.9%

Chase $2500 CL, balance 2407, APR 18.24%

Hooters $2100 CL Balance $1800 Apr 25%

 

I have just recently made a $500 payment each to Capital one, discover and nordstrom (cutting it down to about 50% of the balance)

Also, I would eventually like lower interest credit cards, and maybe do a balance transfer in the future.  Which credit cards for these companies, in your opinion are the best? Is it possible to call these companies and request for an upgrade or change to different credit card (without running my credit).  Thanks!!!


I suggest you pay off the Capital One card first and the minimum on all the others.  It is the most expensive interest.    Then only use that card for your new charges and Pay in full by the due date.  This allows you to make use of the grace period and not pay interest on new purchases.   Then pay them off 1 by 1 in order of interest rate.   Once you get a card paid off so you can use it's grace period,it can be used for new purchases as well.   


I agree with this advice. :smileyhappy:

 




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Moderator Emeritus
tinuviel
Posts: 4,877
Registered: ‎11-02-2010

Re: Credit card question


bs6054 wrote:

There are two commonly suggested models for paying down

 

a) Pay off the highest interest rate first.    This reduces the total amount you pay in the long term

b) Pay off smallest balance first.   This is good for some people as it gives a feeling of accomplishment when a card goes to zero.  If you have a large balance on your highest interest card, some people get discouraged with strategy a) as nothing much appears to happen (the balance goes down slowly)

 

And there are other approaches but these are the most common.


This approach worked for me. It took me over a year, but I was able to dig myself out of debt, and it was an incredibly liberating feeling! The important thing to do is to pick a pay off strategy and stick with it. Even if it means skipping that dinner out or evening at the movies, it's so worth it. Focus on your goal and adhere to your plan and you will get there. Best wishes!


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Regular Contributor
hautemama
Posts: 104
Registered: ‎11-14-2007

Re: Credit card question

Thank to everyone that chimed in on this thread.  Yes, my financial decisions have been bad in the past, but I am finally at the point where I can work on repairing my credit and paying down everything. An additional question, I am currently monitoring my credit via myfico scorewatch.  Can anyone recommend any credit monitoring sites?  I would like to keep an eye on my score and account changes.  Please advise!

Valued Contributor
j_casteel
Posts: 1,685
Registered: ‎06-21-2012

Re: Credit card question

looks like you have all your cards pretty well maxxed out....stop using them would be a first step and then use the sno-ball method in paying them off.

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