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Regular Contributor
jj10939
Posts: 112
Registered: ‎03-09-2009

I REALLY Need Your Help!

Hello,

I have read these forums and value your advise and now I need help!

 

I am 21 years old and when in college I racked up a lot of credit card debt.  I'll start from the beginning.  When I was 18 I had it in my head that I was going to have good credit.  My first credit card was a Discover More card which I got when I was 18 and have always kept the account in good standing.  I usually always paid off the balance each month and when I did carry a balance, I made large payments to quickly pay it off.  In my second year of college, I applied and was approved for several other credit cards and now they are all pretty much at their limit.  Below is my current credit snapshot:


CARD NAME                         CURRENT BALANCE           CREDIT LIMIT            INTEREST RATE

DISCOVER MORE              3900                                        4000                         19.99

CITI                                        3500                                        3600                          14.25

CAPITAL ONE                      1450                                       1500                           21.99

DIRECT REWARDS DISC 290                                          300                             18.00

KOHLS                                  250                                          1000                            21.90

KAY JEWELERS                  160                                          800                             23.90

CHASE                                  2450                                       2500                            10.00 (CLOSED THIS ACCOUNT TO GET LOW INT. RATE)

BEST BUY MC                     1100                                        1200                            19.99

MACYS                                  0                                               100                             23.90

WELLS FARGO                    250                                        300                              17.99

US BANK                              450                                         500                              21.90

 

I make $50,000 per year and I am trying to find a loan to pay all of these credit cards off to make ONE payment instead of making $100 here and $400 there.  I have about $1200 per month that I am able to apply towards this credit card debt.  I have tried to apply for a loan with my bank (Wells Fargo) and they denied me saying that there was no way for them to know that I wouldn't rack up the CL again.  (not that I blame them)

 

So what I am asking for here is to see if there is anyone who can look at my situation and A.) tell me if there is a bank out there who would do this and/or B.) how I should go about paying this down.  I have sat down and created a spreadsheet showing what I need to pay to each card each month to be debt free in one year and when I look at it in Excel, it seems easy enough to do, but I am finding that it is more difficult than I thought.

 

 

I have never been late on any payments on any card but my credit report does show me being over on my limit with a few of these cards.  Any help would be greatly appreciated!

 

Thank you!

 

Frequent Contributor
JagerBombs89
Posts: 385
Registered: ‎09-13-2009

Re: I REALLY Need Your Help!

From what I have learned, and to be simple... Pay the minimum payment on each card and what you have left over, apply it to the HIGHEST interest rate card first.  Once paid off, just repeat the process.

Community Leader
Senior Contributor
laz98
Posts: 4,275
Registered: ‎09-06-2008

Re: I REALLY Need Your Help!

$1200 per month would easily pay off your smaller cards, which would be a great start!  it's pretty encouraging to see those zero balances.  then hide your cards if you don't think you can resist spending.  give them to your parents.  put them in a safety deposit box.  something out of sight!  :smileyhappy:

Latest scores: Walmart TU: 766. MyFICO TU: ---. DCU EQ: 741. PSECU EX: 756.
Mega Contributor
Creditaddict
Posts: 16,881
Registered: ‎10-23-2007

Re: I REALLY Need Your Help!

 


laz98 wrote:

$1200 per month would easily pay off your smaller cards, which would be a great start!  it's pretty encouraging to see those zero balances.  then hide your cards if you don't think you can resist spending.  give them to your parents.  put them in a safety deposit box.  something out of sight!  :smileyhappy:


I agree, min. on all but the smallest and pay it off, you will be able to pay a bunch off the very first month, you could knock all this out in no time with $1200 a month in payments. would be nice to have 1 payment but probably a pipe dream in this credit climate to get lent a nice size loan to someone who is completely maxed out

 

Fico Scores: EQ 620, TU 675 & EX 703 (4-1-14)
Joint Cards: Navy NavCheck $15000, Discover iT $9000, Macy Amex $4000, Macy Store $3000, Macy Furniture $5800
AU: Virgin America $8500, CSP $27,000, Fidelity Amex $25,000, AA Biz $25,000, Barclay USAir Biz $6640
Mine: Navy NavCheck $3000, Kay Jewelry $2700, Pottery Barn $2800, FleetCard MC Biz $1800, HSN $1500, Vitacost MC $1500, Navy Cash $1500 and nRewards $1500, Bill Me Later $772, Cap1 Sony $750, Cap1 Spark $750, Best Buy MC $750, GE 76 Gas $650, Von Maur $600, Cap1 QuickSilver $500, Burbank CU $500, Kohls $300, Target1 $300, Target2 $300, Buckle $250, Express $250, Target3 $200
Valued Contributor
GregB
Posts: 1,669
Registered: ‎05-24-2007

Re: I REALLY Need Your Help!

I don't think you will find any normal lenders that would give you a loan. Suggest you don't waste inquiries.

 

Pay the minimums on all cards and make double sure nothing gets paid late. Pay whatever you can on accounts with highest interest rate. Paying off highest interest will save you the most money, giving you more to pay the others off. Looks like most of the small balance, small limit cards are also the high interest so you will automatically get some more accounts reporting zero balance.

 

As you get the balance down and less than half of your accounts showing a balance, you should get a better FICO and then can try to get a loan to kill the rest.

Regular Contributor
alph4
Posts: 124
Registered: ‎08-06-2009

Re: I REALLY Need Your Help!

What others have said before me.... either paying off the smallest balance first to get a kickstart to paying off, or paying off via the highest interest rate is probably the best.

 

A non-conventional route would be a consolidated balance loan.  I've seen many of these on LendingClub. Essentially it's peer-to-peer borrowing, without bank involvement. I can't speak for how effective it is, as you can't be a lender in Texas yet, but I believe their interest rates for the loans would be much lower than you'd see at a bank, and certainly much lower than the credit cards.

 

Good luck. Glad to see your trying to get these paid off.

Current Cards:
American Express Blue Cash Preferred - March 2007 - CL $10,000
Citi Forward Visa Signature - September 2009 - CL $6,500
Chase Freedom - March 2011 - CL $15,000
Chase Sapphire Preferred - May 2013 - CL $12,500
Discover It - November 2013 - $5,000
Barclay Arrival - January 2014 - $10,000
Established Contributor
voidman
Posts: 531
Registered: ‎06-07-2008

Re: I REALLY Need Your Help!

BUT before you start paying these credit cards, Tie all the CC together and hide them somewhere, pay only cash or use debit card for your daily purchases. 

-void
Established Contributor
okstatefan5945
Posts: 517
Registered: ‎04-13-2009

Re: I REALLY Need Your Help!

What are your minimum payments on each card. You could go back and edit the first post to add it or just repost the cards with the minimum payment amount.

----------------------------------------------------------------------------------------------
2011 Credit Goals
1. No Lates
2. Join the 700 club
3. No inquiries
----------------------------------------------------------------------------------------------
Established Member
yesme
Posts: 45
Registered: ‎07-13-2010

Re: I REALLY Need Your Help!

 


jj10939 wrote:

Hello,

I have read these forums and value your advise and now I need help!

 

I am 21 years old and when in college I racked up a lot of credit card debt.  I'll start from the beginning.  When I was 18 I had it in my head that I was going to have good credit.  My first credit card was a Discover More card which I got when I was 18 and have always kept the account in good standing.  I usually always paid off the balance each month and when I did carry a balance, I made large payments to quickly pay it off.  In my second year of college, I applied and was approved for several other credit cards and now they are all pretty much at their limit.  Below is my current credit snapshot:


CARD NAME                         CURRENT BALANCE           CREDIT LIMIT            INTEREST RATE

DISCOVER MORE              3900                                        4000                         19.99

CITI                                        3500                                        3600                          14.25

CAPITAL ONE                      1450                                       1500                           21.99

DIRECT REWARDS DISC 290                                          300                             18.00

KOHLS                                  250                                          1000                            21.90

KAY JEWELERS                  160                                          800                             23.90

CHASE                                  2450                                       2500                            10.00 (CLOSED THIS ACCOUNT TO GET LOW INT. RATE)

BEST BUY MC                     1100                                        1200                            19.99

MACYS                                  0                                               100                             23.90

WELLS FARGO                    250                                        300                              17.99

US BANK                              450                                         500                              21.90

 

I make $50,000 per year and I am trying to find a loan to pay all of these credit cards off to make ONE payment instead of making $100 here and $400 there.  I have about $1200 per month that I am able to apply towards this credit card debt.  I have tried to apply for a loan with my bank (Wells Fargo) and they denied me saying that there was no way for them to know that I wouldn't rack up the CL again.  (not that I blame them)

 

So what I am asking for here is to see if there is anyone who can look at my situation and A.) tell me if there is a bank out there who would do this and/or B.) how I should go about paying this down.  I have sat down and created a spreadsheet showing what I need to pay to each card each month to be debt free in one year and when I look at it in Excel, it seems easy enough to do, but I am finding that it is more difficult than I thought.

 

 

I have never been late on any payments on any card but my credit report does show me being over on my limit with a few of these cards.  Any help would be greatly appreciated!

 

Thank you!

 


I just went through this, and have insight on it. I sent you a private message here on myFICO.

 

Mega Contributor
RobertEG
Posts: 17,251
Registered: ‎03-19-2007

Re: I REALLY Need Your Help!

[ Edited ]

Payment strategies are not simple.They overlap in their goals.

I see three different strategies that you can take, each different from the other.  Which to take is a personal decision based on your personal goals.

 

The first approach is the financial impact approach. This places less emphasis on current FICO score impacts, and more emphasis on reducing your monthly outlay of interest.  This approach is probably the easiest to assess, if that is your focus.  Higher balance, and higher interest rate cards are costing you a lot.

Let's put some approx numbers on this.  You currently owe $13,800 in CC debt.  Assuming an average CC interest rate of approx 20%, then you are currently paying approx.  1.6% of the balance each month just in interest.  This is around $221 a month out of pocket just to stay even.  This approach puts puts focus, in my opinion, primarily  on your Disc,  then on CITI, and then on Chase.

 

The second approach is to focus on current FICO scoring.  This approach focus on paying the highes % util cards first, regardless of balance or interest rates.

This very short term approach shows 7 cards at 90% util or above; namely, Disc, CITI, Cap1, DirRew, Chase, and USA Bank.

 

The third approach is to focus on potential longer-term impacts on your FICO scoring based on how you continue to manage your accounts.

This approach is much more subjective, but I still think it is important.  You want, for example, to try to avoid credit limit decreases on your highet credit limit cards, for any CLI will wreak great havoc in your FICO scoring.  Your highest CL cards, Disc, CITI, and Chase, are all above 97% util. That is a red flag for a potential CLI.

I think protection of their CL is an important factor.

 

Putting all of these together, I would definately put first emphasis on the DIsc card.  Then,depending on the strategy that is most important to you, CITI, Chase, and Cap1.

 

It makes no sense to me to pay off the lower balance, lower CL cards first just to show a card that now has $0 balance.  That, in my opinion, is not where the bang for the buck is in any of the approaches I think are most important. Number of cards reporting $0 balance is way, way down on the list of FICO score impacts.

 

 


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