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New Member
micha3l
Posts: 13
Registered: ‎10-08-2008
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Got in over my head.. Now what?

So I'm a 19 y/o college student that ever sense I turned 18 have been working on my credit. Shortly after my 19th b-day I was able to purchase a new car in my own name (w/out a consigner) because of it. But I was a victim of a internet scam ( paid for a motorcycle, to by shipped to me...) and with black Friday this last year I purchased a lot of stuff. Not thinking about the repercussions of my actions. Now I'm about 10k deep in CC debts and it seems that ever payment I make is only paying the interest. (literally like on 20-30 dollars toward principle..) so I guess I am just looking for a way out of this. Preferably without ruining my credit. (i.e. Bankruptcy, if that's even an option...) but I just am literally in over my head and I can barely put gas in my car now after I make these payments where as a year ago I had money to burn ( and my income hasn't changed..) I have 5 CC's and all I'm afraid to say are nearly maxed.

 

please any advise is considered and much appreciated.

Mike

New Visitor
Jormungand
Posts: 5
Registered: ‎02-24-2009

Re: Got in over my head.. Now what?

[ Edited ]

Hey Bud,

 

Sorry to hear about your problems.  It sure does suck getting into trouble like that.

 

This link may help you, for people "Knee deep in debt"

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre19.shtm

 

Hope it helps.

 

 

Message Edited by Jormungand on 02-24-2009 12:41 PM
Valued Contributor
Scamp
Posts: 2,791
Registered: ‎03-18-2007

Re: Got in over my head.. Now what?


micha3l wrote:

So I'm a 19 y/o college student that ever sense I turned 18 have been working on my credit. Shortly after my 19th b-day I was able to purchase a new car in my own name (w/out a consigner) because of it. But I was a victim of a internet scam ( paid for a motorcycle, to by shipped to me...) and with black Friday this last year I purchased a lot of stuff. Not thinking about the repercussions of my actions. Now I'm about 10k deep in CC debts and it seems that ever payment I make is only paying the interest. (literally like on 20-30 dollars toward principle..) so I guess I am just looking for a way out of this. Preferably without ruining my credit. (i.e. Bankruptcy, if that's even an option...) but I just am literally in over my head and I can barely put gas in my car now after I make these payments where as a year ago I had money to burn ( and my income hasn't changed..) I have 5 CC's and all I'm afraid to say are nearly maxed.

 

please any advise is considered and much appreciated.

Mike


 

Mike, it might help if you provide us with more information on what cc's you have, which company, their current balances, current limits, current APR's, and whether or not any of them have any balance transfer offers still in effect or possibly forthcoming.  Once we know how much you owe on what, and at what rate, that'll help us advise you.

 

Please also post how much you can pay each month toward your cc debt.

 

It sounds like you also need to try to look at coming up with more $$ to put toward this debt, so if you haven't done so already, take a VERY hard look at your budget and see if there's anywhere you can cut corners for a while so you can put more cash toward your cc debt - pack your lunch instead of eating out, cook at  home instead of ordering out for dinner, cut back on or give up the cable/satellite TV if you have that, etc.  Giving up  luxuries like that can free up an amazing amount of money; I know when I actually sat down and added up how much I was spending at my favorite sandwich shop per month on lunches, it astounded me - and in cutting that habit WAY down gave me about $200/month more to put toward my own cc debt.

 

If you only have one job, consider getting second one to bring in more $$ to put right onto your debt.  Check for stuff around the house that you no longer want or use that you could sell on ebay or in a yard sale.

 

Call your cc companies and see if you can get them to lower your interest rates.  Check online to see if any of them have any BT offers for you (BofA and Chase always seem to have one for me); a good 0% BT offer might help, if you're able to move money around a bit.

 

Once we get you started in paying things off, there are a few options - the two variations of the "snowball" approach seem to be most popular.  One version has you pay just the min. on all cards but the one with the smallest balance; once that balance is paid off, target the next smallest one, and so on.  Folks who need the boost that comes from seeing progress very quickly seem to do best with that version.

 

The other version does the same thing but targets the card with the highest interest rate first; when that's paid off, the extra $$ goes to the next-highest interest rate, and so on.  This works well if you have good discipline and get enough of a boost just watching the balance go down.

 

Hope this helps.  Hang in there - it CAN be done.

_____________________________________________________________________________
It's never too late to become the person you might have been. ~George Eliot

02/12/09 EX: 701 / 02/08/10 EQ: 719 / 02/08/10 TU: 723

Backdoor Numbers, Credit Scoring 101, Understanding Your FICO Score PDF
New Member
micha3l
Posts: 13
Registered: ‎10-08-2008
0

Re: Got in over my head.. Now what?

[ Edited ]

okay, so going back. As I mentioned I have 5 CC's. so here go's

 

1st financial bank 1800/1900 19.99%

BoA 492/50016.99%

Chase 800/900 0% thru this april,

U.S. Bank 1920/2000 20.99%

ENT 4800/5000 11.95% :smileysad:

 

So thats where that is i didnt use exact amounts cuz i dont have time to go check all of them but from paying them at this month this is pretty close. and ive been paying 100 a month each, but as i said it just doesnt go anywhere.. so I guess still looking for answers, hope this info helps

 

Edited formatting to make it easier to read.  -Peas

Message Edited by WhirledPeasPlease on 02-24-2009 04:46 PM
Frequent Contributor
desifink
Posts: 405
Registered: ‎10-20-2007
0

Re: Got in over my head.. Now what?

You say you're paying $100 to each card every month. My guess is that this is more than your minimum payment on each card. To focus your payment strategy, I'd cut back to minimum payments on all but one card, and reallocate all the extra money to that one card. You can either start with your smallest balance to result in a quicker payoff of that card, or you can start with your highest interest card to reduce the amount of interest you're paying long-term. Once that card is paid off, reallocate that payment to the next card (the snowball method someone else mentioned). You can also look for places in your budget where you can cut back to free up extra money, which was also suggested previously, and you might look into getting a part-time job to help tackle the debt.

 

Good luck!

Valued Contributor
Scamp
Posts: 2,791
Registered: ‎03-18-2007
0

Re: Got in over my head.. Now what?


micha3l wrote:

okay, so going back. As I mentioned I have 5 CC's. so here go's

 

1st financial bank 1800/1900 19.99%

BoA 492/50016.99%

Chase 800/900 0% thru this april,

U.S. Bank 1920/2000 20.99%

ENT 4800/5000 11.95% :smileysad:

 

So thats where that is i didnt use exact amounts cuz i dont have time to go check all of them but from paying them at this month this is pretty close. and ive been paying 100 a month each, but as i said it just doesnt go anywhere.. so I guess still looking for answers, hope this info helps

 

Edited formatting to make it easier to read.  -Peas

Message Edited by WhirledPeasPlease on 02-24-2009 04:46 PM

 

Mike, initially, I'd say cut back to minimums on all cards but the BofA, and throw as much as you can at that BofA $492, get that paid off first.  If you can scrape up enough extra somehow to pay it off in one shot right away, that'd be a good boost for you in more ways than one.

 

Getting that card paid off would free up an additional hundred per month for you.  After that, do whichever version of the "snowball' approach you think would work best for you, either targeting the cards in order of highest interest rates or smallest balances, and paying the minimums on all cards except one, putting as much cash as possible on that one card until its paid off, then rolling that freed-up money into payment on the next card, and so on.

 

Definitely cut back anywhere you can on expenses; you might have to live without a few things temporarily, but bagging your lunch and living without cable for a while is better than having things go to collections and/or filing bankruptcy.

 

Can you cut back anywhere?

 

Can you get a second job?

_____________________________________________________________________________
It's never too late to become the person you might have been. ~George Eliot

02/12/09 EX: 701 / 02/08/10 EQ: 719 / 02/08/10 TU: 723

Backdoor Numbers, Credit Scoring 101, Understanding Your FICO Score PDF
New Member
micha3l
Posts: 13
Registered: ‎10-08-2008
0

Re: Got in over my head.. Now what?

This really is the cut back version unfortuantly enough for me. however i have been considering a second job, even applied at a few places. But its **bleep** hard to work two jobs and attend college full time while still maintaining good grades. but i guess i just really have to suck it up here for a couple months.
Established Contributor
Posts: 513
Registered: ‎04-03-2007
0

Re: Got in over my head.. Now what?


micha3l wrote:

 

 this last year I purchased a lot of stuff. Not thinking about the repercussions of my actions. Now I'm about 10k deep in CC debts and it seems that ever payment I make is only paying the interest.

 

I just am literally in over my head and I can barely put gas in my car now after I make these payments where as a year ago I had money to burn ( and my income hasn't changed..) I have 5 CC's and all I'm afraid to say are nearly maxed.

 

please any advise is considered and much appreciated.

Mike


 Mike,

 

 How much is the $10,000 worth of stuff worth now? How much can you raise by selling the stuff ?  How much do you owe on the car and how much can you raise by selling it? You could probably get by with a much less expensive car since you are hard pressed to buy gas as it is.

 

 If you want to keep the stuff and the car and still have an 800 FICO score by next year, the only thing left to do is get to work on increasing your income. You cannot borrow your way out of debt.

 

 You will have to prioritize what you really want. You can't have everything in life that you want. Unfortunately that is how people get in over their heads in the first place. You say that you are a student. How important to you is graduating from school instead of dropping out?  

 

 If you absolutely must keep the car, you might try to find jobs like pizza delivery that usually pay enough to pay car expenses. Are you willing to do no socializing whatsoever in order to be able to keep the car and actually graduate from school?

 

 College students are usually also in demand as waiters and car parking valets. Those jobs usually pay quite well. Of course the peak time for work are the weekend night time hours. Weekends of fun with classmates unfortunately cannot have a priority higher than getting out of debt.

 

 If you want to stay in school and work extra "part time" hours, it will be difficult to cary a full course of study. Perhaps taking fewer classes might be an option.  The quickest way out of debt would be to take a semester off and work full time day and night. Only you know if that is feasible or advisable.

 

 Getting out of debt over time requires a lot of sacrifice, dedication, discipline, and some pain. If you want to get out from under the Spartan lifestyle and feel the pain subside quicker, it takes a lot more dedication and even more short term pain.

 

 You will get a lot of advice about BTs, and lowering interest rates in forums like this, but none of the advice will help in the long run if you don't get your priorities in order. Many here can help with suggestions about earning extra income and belt tightening measures. It is not so bad if a person chooses to do extra work instead of socializing with other students. When you socialize more with working people, as you work extra jobs, you still can have a lot of fun, and get paid for doing so.

 

 Here is a short outline of possible priorities that you might consider. Many of us have had to make hard choices like these as we have lived our lives over the years.

 

 

 

* Spend a lot of time with school friends and or girl (or boy) friends.

OR  socialize only with people met during the course of working extra job(s) or hour(s).

Better yet, ask around which college students are working their way through school. Seek those students out and become their friends. Find jobs where they work, and socialize with them by being part of their work group, and get paid at the same time.

 

 

* Have a few (or more) "social drinks" with strangers meet at bars and parties.

OR don't party at all and put that money towards debt.

 

* Have a beautiful new car to ride around in when gas money is available.

OR sell it. Or at least use the car to earn a lot of extra money.

 

* Graduate from school instead of dropping out.

It is virtually impossible to reduce debt, still buy a lot of stuff,

maintain an active college social life, study and actually graduate.

 

* Paying down debt as fast as possible is essential to the game plan.

 .

* Sell everything that is not needed to work, study, and graduate from school. 

 

 

I am sorry for being so blunt, but you have a very "blunt" problem. FICO and Credit advice alone will not solve your problem. The tips and tricks you seek will only achieve slightly better terms from creditors. Having a greater percentage of a minimal payment  applied towards principle is not the solution to the problem. Paying a lot more towards the debt every month is the best solution. You know you can do it if you set your mind to it.  You are capable of earning enough money to "have money to burn". You simply have to stop burning it and use it to pay off your debts.

 

 

Mike, Please "objectively" read all of your posts that you made in this forum. Try to see where the path you were on seemed to be headed. Read carefully the responses and some of the cautionary advice that you were given. Did you really follow the advice that would have helped you avoid your current state of affairs?  

 

 Will you possibly consider taking advice that is hard to swallow, if it will eventually lead to a solution to your problem? I know that you are young. You are about to become older really fast. I will pray for the best for you. No matter what happens you will be fine in the years to come. The lessons about finance and credit you are learning now will pay off big time as you make your way through the mine fields of life. :smileywink:

 

 


Established Contributor
Posts: 513
Registered: ‎04-03-2007
0

Re: Got in over my head.. Now what?

[ Edited ]

micha3l wrote:
This really is the cut back version unfortunately enough for me. However I have been considering a second job, even applied at a few places. But its **bleep** hard to work two jobs and attend college full time while still maintaining good grades. but I guess I just really have to suck it up here for a couple months.

 

Good grades of course should be the primary goal, and reducing debt the secondary one. Is it possible that you might carry a few less credits next semester and be able to focus on paying the debt off completely? 

 

 

 


Message Edited by CreditAble on 02-24-2009 06:55 PM
New Contributor
craigh
Posts: 80
Registered: ‎02-09-2009
0

Re: Got in over my head.. Now what?

Not to knock down some other posts but I just graduated college and am starting a job in a week. I know graduating is very important, but there really is no difference between an A and a Cin regards to college grades. In high school and grade school maybe, but not really at a University.

 

Maybe it was just my particular degree, but my employer doesn't look at my academic transcript. 


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