@lindel wrote:
So for the past few months I've been using the snowballing method to pay down my credit card debt. Although I have pay off 4 credit cards. My utilization hasn't move and mind you I'm not paying just he minimum on my other cards I paying atleast double the minimum to cut down on the interest and I'm not getting no where. I have a lot of cards that have 0 balance also. And in the last 3 months my utilization has only went from 41% to 40%. Any suggestions?
@lindel wrote:
And that's what I'm thinking. A lot of people are saying stop using the cards. I'm not using them but by me paying the minimum. The interest is what's keeping me from moving forward. I appreciate all the responses. Again I'm at work so I don't have the cards with me. But will post as soon as I can
I'm confused. In your first post you said that you're paying at least double the minumum but here you're saying you're only paying the minumum. Which one is it? The reason you should stop using your cards is because you can't dig your hole deeper (continuing to spend on the cards) and expect to get out of it. If someone wants to lose weight you can't continue to go to pizza buffets and Mcdonalds and expect to see your weight drop. You need to cut back and stop eating at the very place(s) that got you fat to begin with (i.e. continuing to spend on your cards and expect the balances to come down). Using the same weight metaphor, you didn't become fat over night so you can't expect to lose it over night either. Same scenario with your debt. It's rarely the case that someone gets in your positition over night. If you're truly over extended and struggling to pay down your cards after your NECCESSARY expenses, it may take a year or two until you get your cards paid off as long as you don't keep digging the hole deeper. Start using your debit card or cash for now and cease swiping your cards. If you don't have it in your bank account DON'T spend it. If deep down inside you can't control yourself, buy a small nightstand safe that fits in a nightstand drawer, put ALL of your cards in there, lock it up and give it to a trusted person to keep you away from the cards. Sounds petty I know but sometimes we gotta do what we gotta do!
It's really a simple math equation. In order to pay the cards off you need to pay more money towards the cards. Income (payment towards the cards) must be GREATER than outgoing (expenses + interest). If you stop spending on the cards you already have 1 of the 2 issues knocked out (IMHO the greatest issue directly correlating to keeping your balances up). There are a million ways that you can make that math equation come true in your life. It's up to you! It's how bad do you want to be debt free and what are you willing to do to get it?
I know you're working, which is great, but when you do get around to it please post your info per my other post so we can get down to the nitty gritty so we can get you on the right path. I don't mean to sound harsh, any of us for that matter, we just want to help you the best we can and sometimes our worst enemy is ourself.
One of my favorite quotes I've seen regarding cards is this; "When we use credit cards we get that rich feeling. But if we don't pay the card back in time then we pay someone to get that rich feeling." When you really digest that you may start thinking about credit cards a little differently!
ETA: Spelling
Personal:
@MrsCHX wrote:
@red259 wrote:People shouldn't be worrying about what is psychologically best.
But they do. I'm not saying they SHOULD, just that so many people mention that when they are doing the snowball method. It helps them stay focused. And unfortuantely, people make emotionally-charged financial decisions all the time. Again, probably not the wisest choice but, it happens.
Problem is if they are running up interest on a high interest credit card then they are not dealing with their debt, so in reality they are not focused on the problem at all.
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@syeb wrote:
@Chris679 wrote:
@lindel wrote:
So for the past few months I've been using the snowballing method to pay down my credit card debt. Although I have pay off 4 credit cards. My utilization hasn't move and mind you I'm not paying just he minimum on my other cards I paying atleast double the minimum to cut down on the interest and I'm not getting no where. I have a lot of cards that have 0 balance also. And in the last 3 months my utilization has only went from 41% to 40%. Any suggestions?This is why the snowball method is sub optimal. While you are paying off your low balance cards you are racking up interest charges on your high interest cards. Pay off your cards in the order of highest interest rate first. That is the fastest, cheapest way to pay off debt, math does not lie (unlike Dave Ramsey.)
You are correct that mathamatically, paying the most to the card with the highest interst rate is the best way. However better to stick to the #2 plan than to start strong but then give up on the #1 plan. The true benefit of snowballing is psychological with the continuous boosts to morale and thus the incentive to stick to the program as cards get paid off. This increases the likelihood of staying on track. So in the long run, unless someone has perfect discipline, the high interest rate method is less likely to work as effectively as the snowball method.
100% agree. I like what Chris was saying because it's smarter to do it that way but if you don't have the discipline to do it, it's not going to help you out, period. The small wins give you a boost of confidence knowing you can do it and if you're budgeting correctly and literally throwing more money than just double the minimum it will in fact start to go down. Once you seriously start attacking your credit cards and are patient (because it takes time) the numbers will change.
