Urgently Advice Needed

[NJTurnpike]

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@vikash1986 wrote:

Guys we make 130k a year, 65k each. We commute to work from NY to NJ about 35 miles each way. I have my Mercedes 2009 C300 which I owe about 16k on it for another 4 years. My husband drives the G37 2011 which we owe about 24k for another 5 years that we recently bought. Both cars are with USAA payments is about 700 a month for both vehicle. We don't have any rent or mortgage and our bills are minimal with our car insurance being the highest at 460 a month. Do you think we have overextend our self. I will pay off the balance on my two credit card by the end of next month. So the only cc debt I will have is the 22k Amex blue.

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This makes the debt on the car loans sound much more reasonable for sure. If you've had the same car insurance for more than 6 months, you should consider shopping around for another insurer who will most likely offer you a better rate. I went from Progressive to Geico and pay a little more than half what I did with progress for the same coverage.

Without have rent or a mortgage and having a combined income of 130k, that $22k in CC debt seems manageable. I estimate your combined take home pay per month is around 6k depending on your benefits and retirement contributions. Assuming you only use 2k a month for bills and daily spending, you could pay nearly the entire balance of the 22k before August.

[twall06]

Is there anyway you could put one of yalls pay toward just paying off the huge balance? Sounds like you have minimal bills since no rent . I only say that because at one point I was paying 500 a month to pay down one debt went without some things but nothing I could not live without I was only making 44k at that time so it took a huge amount of my pay. If I was you I would try to get a loan for it instead of another cc.

[vikash1986]

@NJTurnpike

I have balances reporting on my accounts as well as the Amex blue but by March 18th my report will have a utilization of 10%. The balances will be reduce to zero by May 1st. Then I have May, June July and August to bring this 22k to about 18k. From here on I am hope USAA will increase my limit to sizeable amount and the remaining will be hopefully again through MCU in NYC. The squestration for our spending like the US is in full effect. I am starting to shed weight by the kilos. lol

[vikash1986]

@twall06,

We put most of our income into a saving because of an a particular illness that might suck every penny out from us. Its one reason I had to use this card to begin with. To be safe going forward, I am trying to pay down this credit card without consuming our entire income for the time being. If I am able to stay at 0% for another 18 months I will be home free and should we need money again I have the saving as the first choice for medical bills. Thank you I love you people very much and appreciate the genuine advice found on this forum. You guys are a life saver thanks everyone.

[twall06]

I understand medical bills can suck everything out of you pretty quick. It is crazy that they are making healthcare more "affordable" yet my insurance has increased but my coverage has decreased. I have been trying to save all I can also we have a baby due and he may need surgery a few weeks after he is born nothing life threatning but idk how much it will cost. Hope everything works out for you.

[p-]

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@vikash1986 wrote:

Guys we make 130k a year, 65k each. We commute to work from NY to NJ about 35 miles each way. I have my Mercedes 2009 C300 which I owe about 16k on it for another 4 years. My husband drives the G37 2011 which we owe about 24k for another 5 years that we recently bought. Both cars are with USAA payments is about 700 a month for both vehicle. We don't have any rent or mortgage and our bills are minimal with our car insurance being the highest at 460 a month. Do you think we have overextend our self. I will pay off the balance on my two credit card by the end of next month. So the only cc debt I will have is the 22k Amex blue.

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Sorry to hear about the illness, hope all goes well.  One more thing you might consider is a refi on the cars with penfed.  I recently did the same thing with a loan I had at USAA, and turned a 3.85 loan into 1.49.  

With your incomes, the 20k should be a manageable amount, especially if you find some nice tweaks to your budget to help pay it down faster.  I am suprised at the cost of your insurance; 460 a month is pretty high for just two cars, even with full coverage.  Through USAA I am paying 160 a month for full coverage on two brand new cars worth about 50 to 60k, and a classic muscle car.  You should shop around, and definitely check USAA if you are eligible.  If not, take a look at Amica.

Good luck!

-p

[vikash1986]

@p

Back in october 2011 i was involved in a fender bender that I ended up being worng costing my insurance to go up. Progressive paid out 3600 i believed to the other party. The lady was on her cell phone making a lane change in merging traffic. Not sure how I ended up being the one to be blamed for the accident even after I lamented that the lady was on her phone. Then in September 2012 I rear ended cause my vehicle to be a total loss I was found not at fault but when I did a quote with USAA the accident came up on their end as me being 50% at fault. In any case with progressive I am paying 2760 every 6 months and Usaa qouted me at 6499 for both vehicle with the same coverages. After seeing that I am very reluctant to change. I have had insurance for about 3 years and beside what I mention I have never had any voilations or accident. I will shop around to see what better offer i can get. Penfed is making me pull my hair to get my vehicle refinance. The last decline was for paramiding debt. So mad at them. I had a loan with them not so long ago. The car that was a total loss was with them. Thank you p for your advice.

[Johnny_Favorite]

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@vikash1986 wrote:

@p

Back in october 2011 i was involved in a fender bender that I ended up being worng costing my insurance to go up. Progressive paid out 3600 i believed to the other party. The lady was on her cell phone making a lane change in merging traffic. Not sure how I ended up being the one to be blamed for the accident even after I lamented that the lady was on her phone. Then in September 2012 I rear ended cause my vehicle to be a total loss I was found not at fault but when I did a quote with USAA the accident came up on their end as me being 50% at fault. In any case with progressive I am paying 2760 every 6 months and Usaa qouted me at 6499 for both vehicle with the same coverages. After seeing that I am very reluctant to change. I have had insurance for about 3 years and beside what I mention I have never had any voilations or accident. I will shop around to see what better offer i can get. Penfed is making me pull my hair to get my vehicle refinance. The last decline was for paramiding debt. So mad at them. I had a loan with them not so long ago. The car that was a total loss was with them. Thank you p for your advice.

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All insurance companies assign a percentage of fault to every accident. Could be 30/70, 50/50, etc. There is almost never an instance where a person is 100% at fault (in the eyes of the insurance companies). They settle on a percentage and that's where they negotiate payouts. If you were at fault it could have been that even though she was on her phone, you didn't brake or were following close to the car in front of you. There's a lot of reasons of why fault would be assigned mostly having to do with tailgating or following too close.

@Anonymous @ "besides what I said i have never had any violations or accidents" Are you living in some kind of bubble? You had two accidents in the last two years. Seems to me that you are in some kind of denial about your life. I hope you wake up just like Tom Cruise in Vanilla Sky. You just had to have a Mercedes right? 65k a year is not really mercedes type salary, that's like Honda Civic salary (to people that are responsible with their money). Sounds like you guys playing "keep up with the joneses" is putting you in money problem situations. Repeat after me: you are not your mercedes. You are NOT your mercedes. You are NOT your Mercedes. You are not the contents of your wallet. You're not your Khaki's or your designer purse.

I advise you to wake up.

[NJTurnpike]

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@Johnny_Favorite wrote:

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@vikash1986 wrote:

@p

Back in october 2011 i was involved in a fender bender that I ended up being worng costing my insurance to go up. Progressive paid out 3600 i believed to the other party. The lady was on her cell phone making a lane change in merging traffic. Not sure how I ended up being the one to be blamed for the accident even after I lamented that the lady was on her phone. Then in September 2012 I rear ended cause my vehicle to be a total loss I was found not at fault but when I did a quote with USAA the accident came up on their end as me being 50% at fault. In any case with progressive I am paying 2760 every 6 months and Usaa qouted me at 6499 for both vehicle with the same coverages. After seeing that I am very reluctant to change. I have had insurance for about 3 years and beside what I mention I have never had any voilations or accident. I will shop around to see what better offer i can get. Penfed is making me pull my hair to get my vehicle refinance. The last decline was for paramiding debt. So mad at them. I had a loan with them not so long ago. The car that was a total loss was with them. Thank you p for your advice.

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All insurance companies assign a percentage of fault to every accident. Could be 30/70, 50/50, etc. There is almost never an instance where a person is 100% at fault (in the eyes of the insurance companies). They settle on a percentage and that's where they negotiate payouts. If you were at fault it could have been that even though she was on her phone, you didn't brake or were following close to the car in front of you. There's a lot of reasons of why fault would be assigned mostly having to do with tailgating or following too close.

@Anonymous @ "besides what I said i have never had any violations or accidents" Are you living in some kind of bubble? You had two accidents in the last two years. Seems to me that you are in some kind of denial about your life. I hope you wake up just like Tom Cruise in Vanilla Sky. You just had to have a Mercedes right? 65k a year is not really mercedes type salary, that's like Honda Civic salary (to people that are responsible with their money). Sounds like you guys playing "keep up with the joneses" is putting you in money problem situations. Repeat after me: you are not your mercedes. You are NOT your mercedes. You are NOT your Mercedes. You are not the contents of your wallet. You're not your Khaki's or your designer purse.

I advise you to wake up.

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That's rather harsh, but not without a *grain* of truth. In their situation, I WOULD consider selling the Mercedes for a corolla or civic (or *shudder* a KIA) until the debt was paid down. That would not only result in car payment savings, but also in an insurance savings, both of which would help with paying down the 22k rather than pyramid'ing it over to another 0% APR card.

Its your choice how you manage your finances of course, but with your concern over saving money in case it is needed for healthcare, I would think sacrificing the Mercedes would aid in that goal as well.

Consider it this way, if you're able to pay down the $22k on your SIL's card and pay down your cards, you put both yourself and you SIL in better position credit-wise. If <god-forbid> you did need additional money for healthcare costs, you would be in a hugely better position to get it as would your SIL be in a better position to help again.

Another of my two pennies to add to the mix of everyone else's advice.

[p-]

At fault accidents definitely hurt your insurance cost, but you can appeal that finding on the second one.  If anything it will mean your record will be clear sooner, so it's worth the effort.  I'm pretty sure the accident stops killing your rates at the three year mark, but it may be five depending on the state.  If you are successful in appealing the more recent one, check USAA again.  And either way make a note to shop in 18 months, when the first one clears.  In fact, you might consider appealing that one as well.  Why not?

40k in car debt for two almost new cars isn't unreasonable for a 130k income, especially considering you don't have a mortgage.  But it would be smart to drive those things until the wheels fall off.  

Bummer about penfed, though.  I would keep trying with them.  I don't know anyone else offering cheaper refi's.

As far as the suggestion to sell your cars and buy a kia; I disagree.  The chances of getting book for your merc is pretty slim, so you'd start the day upside down.  And doing any finance app short of a major cash saving refi isn't smart right now.  I grant you it would have been smart to purchase a cheaper model car and bank some savings, but it sounds like you went with used instead of new, or at least paid a nice down to be where you are now.  For the NY metro area, you are a long way from the Jonese's.

Otherwise, you seem to be doing the right things.  Good luck.