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Epic Contributor
Creditaddict
Posts: 22,066
Registered: ‎10-23-2007
0

Re: I REALLY Need Your Help!

I like that you list all the strategies but currently a fico score is not doing this poster a single thing because even if they had an 800 score... with all the cards being over 90% util, they would not get approved for anything and the purpose is to pay off the debt not get more cards so I would say focus on what is going to make you debt free fastest.  That is paying your smallest cards first to eliminate that payment and allowing you bigger payments on your next cards... either way your going to be debt free in a little over a year and your fico will be in great shape then.

Fico Scores: EQ- 626 Overstck., TU 696 Walmart, EX 695 Chase (11-05-14)
You will have to put up Electric Fence to keep me in the garden!
Highest Limit: Navy Federal Cash Sigi Visa $50k (AU)
Lowest Limit: Target $200
66 Cards and Counting :smileytongue:
Mega Contributor
RobertEG
Posts: 18,462
Registered: ‎03-19-2007
0

Re: I REALLY Need Your Help!

I dont follow your logic.  The higher the interest rate and balance, the more out of pocket interest is paid each month.

I dont see a prime focus on lower balance cards, particularly if their interest rate, such as Wells Fargo or DirRew, is below that of higher balance cards.

But each has his or her own view.  That is surely a strategy one could  take, but not the one I would recommend.

Epic Contributor
Creditaddict
Posts: 22,066
Registered: ‎10-23-2007
0

Re: I REALLY Need Your Help!

when feeling overwhelmed with debt you need to climb the mountain and you need to see accomplishment or you are more likely to give up.  I would totally agree with saving a little more money pay high interest rate first but how much are we really talking with only 13-15 months of paying... If we were into 5 years you might be talking about real money lost by paying lowest balances first

Fico Scores: EQ- 626 Overstck., TU 696 Walmart, EX 695 Chase (11-05-14)
You will have to put up Electric Fence to keep me in the garden!
Highest Limit: Navy Federal Cash Sigi Visa $50k (AU)
Lowest Limit: Target $200
66 Cards and Counting :smileytongue:
Mega Contributor
RobertEG
Posts: 18,462
Registered: ‎03-19-2007
0

Re: I REALLY Need Your Help!

[ Edited ]

OK, I amend my post. 

Please add a fourth approach.  The "warm and fuzzy feeling" approach. Criteria being that it makes one feel an accomplishment by  paying the less relevant accounts first.

I, personally, feel more accomplishment by having more money in my wallet.

A debt of over $3000 does not reduce quickly, and certainly not in a year, with only minimum payments to that account due to direction of emphasis to lesser accounts.  Most of a min payment is eaten alive by the interest. The Disc card, for example, now accrues approx $70 a month just in interest.  Let's say you do a min pay to them of $150.  That is only a reduction on balance of $80  month.  Repeat that for 12 months, and the reduction is, aprrox.,  $960 for the next year.  One year of min pay, and the debt would remain at close to 70% of the original $3900.  Still close to $3,000, and a % util of close to 75%.

But to each his own. approach.  I see your point, and dont contest it.  It just would not be my approach.

 

Epic Contributor
Creditaddict
Posts: 22,066
Registered: ‎10-23-2007
0

Re: I REALLY Need Your Help!

The reason for the "fuzzy feeling" approach is:

lets just use 3 of my cards as example

Macys Visa $12k 24.50% min. $400

Chase $2k 10% min $60

HSBC $400 14% min $20

 

Now in your way of paying highest interest first I would pay min on chase and HSBC and send all my money to Macys. lets say I'm paying 1k a month towards credit card debt.

If we did it my way I would have the 2 small ones paid in 3 months and then all 1k could go towards macys. in your way I would be paying HSBC for over 2 years, Chase for close to 3 years and Macy's would take 4-5 years.

 

Why do I want to pay HSBC for 2 years when I could pay them off in 1 month and have 1 less card to worry about.

(excuse me if my lengths are a little off, just trying to show an example without getting my calculator out)

Fico Scores: EQ- 626 Overstck., TU 696 Walmart, EX 695 Chase (11-05-14)
You will have to put up Electric Fence to keep me in the garden!
Highest Limit: Navy Federal Cash Sigi Visa $50k (AU)
Lowest Limit: Target $200
66 Cards and Counting :smileytongue:
Established Contributor
voidman
Posts: 540
Registered: ‎06-07-2008
0

Re: I REALLY Need Your Help!

 


RobertEG wrote:

OK, I amend my post. 

Please add a fourth approach.  The "warm and fuzzy feeling" approach. Criteria being that it makes one feel an accomplishment by  paying the less relevant accounts first.

I, personally, feel more accomplishment by having more money in my wallet.

A debt of over $3000 does not reduce quickly, and certainly not in a year, with only minimum payments to that account due to direction of emphasis to lesser accounts.  Most of a min payment is eaten alive by the interest. The Disc card, for example, now accrues approx $70 a month just in interest.  Let's say you do a min pay to them of $150.  That is only a reduction on balance of $80  month.  Repeat that for 12 months, and the reduction is, aprrox.,  $960 for the next year.  One year of min pay, and the debt would remain at close to 70% of the original $3900.  Still close to $3,000, and a % util of close to 75%.

But to each his own. approach.  I see your point, and dont contest it.  It just would not be my approach.

 


I kinda don't like this approch either, I will feel warm and nice  by knowing that I saved some money in interests rather than 0 balance cards.

 

-void
Epic Contributor
Creditaddict
Posts: 22,066
Registered: ‎10-23-2007
0

Re: I REALLY Need Your Help!

there is a great debt snowball calculator at whatsthecost.com that you can type all your debts and interest rate and what you want to spend and it will lay out to the penny the most financial way of paying each month until it's all paid if you want the most money saving way

Fico Scores: EQ- 626 Overstck., TU 696 Walmart, EX 695 Chase (11-05-14)
You will have to put up Electric Fence to keep me in the garden!
Highest Limit: Navy Federal Cash Sigi Visa $50k (AU)
Lowest Limit: Target $200
66 Cards and Counting :smileytongue:
Established Contributor
voidman
Posts: 540
Registered: ‎06-07-2008
0

Re: I REALLY Need Your Help!

 


Creditaddict wrote:

there is a great debt snowball calculator at whatsthecost.com that you can type all your debts and interest rate and what you want to spend and it will lay out to the penny the most financial way of paying each month until it's all paid if you want the most money saving way


Yes I will vouch for that. Not sure if you can post the link here or if you want to Private message me :smileyhappy: Thanks . (I bet there must be an iPhone app for that too)

 

-void
Epic Contributor
Creditaddict
Posts: 22,066
Registered: ‎10-23-2007
0

Re: I REALLY Need Your Help!

actually there is an iphone app called debt snowball pro

Fico Scores: EQ- 626 Overstck., TU 696 Walmart, EX 695 Chase (11-05-14)
You will have to put up Electric Fence to keep me in the garden!
Highest Limit: Navy Federal Cash Sigi Visa $50k (AU)
Lowest Limit: Target $200
66 Cards and Counting :smileytongue:
Established Contributor
voidman
Posts: 540
Registered: ‎06-07-2008
0

Re: I REALLY Need Your Help!

lol Thanks, it costs few dollars I will get it when I need it.

-void

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