I would pay off Chase, Cap 1, Walmart, and PayPal with the tax return, I'd also pay that $23 AE balance off immediately...
Then I'd shove all my cards into a space that isn't easily accessable while I took the payments that I was paying on those 5 cards and dump them on the AE Visa and Citi card. Then I'd throw $200/mo or more on the Citi card and $100/mo or more on the AE Visa. Once the Citi would be paid off, then I'd dump all the cash I was paying to finish knocking off the AE Visa, simply because it's the highest one... I'd save it for last.
I'm using my entire tax refund to pay off my credit card debt. My savings in non-existant after being laid off and unemployed for 4 months last year... 10 months after buying a house and 4 months after buying a new car. My credit cards got a work out for a couple months when I was off work... on top of what I used to get stuff for the house. I'm paying them IN FULL, about $6500... and locking all but 1 (my cash rewards) away. I'm going to have to be dilligent this next year to ensure that I don't end up in the same situation. I really wanted to pay my car off, but the credit card balances hurt my credit while the car loan helps my credit, so... next year's return will pay off the car, and then I'll have a savings account again. It makes me nervous, but I figure with the money that I won't be spending making payments on 13 (out of 14) credit cards... that can go towards either my savings or my car loan, which is at least an additional $300/mo. Next year, after the car loan is gone and I drop my insurance down to liability, I should have another $300 back in my pocket. I can save then... Right now, I just have to do what makes sense.
@WallyxD wrote:
@efranklin23 wrote:
@WallyxD wrote:Hey guys, I'm currently in the process of filing my taxes, and so far I'll be getting around 1.5k back. I have about 4.5k in credit card debt (helping people out and going crazy when the cards were first opened), and my savings account is also depleted. I figured it'd be a no brainer to use all of my income tax to pay down my debt, but I have absolutely no type of cushion due to me having pretty much nothing in my savings account, which has been making me uncomfortable. What would you guys suggest I do? If need be, I can provide my CC balances and interest rates so that you guys can give suggestions as to what exactly to pay off. Also, how do you guys feel about me taking out a personal loan as a way to consolidate my remaining debt?
You need to provide more info like the Util for each card. But to get started, I would start by saying you need to have some money in your savings account. We can't help until we have more info. At this moment, I would avoid type of loan until you paid your debt down to a comfortable level (under 10%)
Here are my balances (odd interest rates, I know):
AE Visa: $1780/2300 23.99%
AE Store Card: $23/700 24.99%
Chase Amazon: $470/500 22.24%
Citi: $1335/1500 13.74%
CapOne: $630/1200 19.80%
Walmart: $360/1350 22.90%
Paypal SC: $180/300 26.99%
And I only considered taking out a loan so that I'll only have one payment per month to make instead of making 7 individual payments per month, I thought it was a good idea lol.
With your tax refund, I would personally pay off the highest interest rate cards first. So, pay off, in this order:
PayPal: $180
AE Store Card: $23
AE Visa: $1297 (Balance remaining: $483)
Also, see what you can do to earn more money, such as selling things that you don't use, picking up extra shifts, etc. You mentioned paying Comcast $15/month. If this is cable TV, I'd seriously consider cutting that off until you get your balances to a more manageable place. And see what you can do to cut down on your food spending.
Good luck.
@WallyxD wrote:
@chwebb1 wrote:
@WallyxD wrote:
@efranklin23 wrote:
@WallyxD wrote:Hey guys, I'm currently in the process of filing my taxes, and so far I'll be getting around 1.5k back. I have about 4.5k in credit card debt (helping people out and going crazy when the cards were first opened), and my savings account is also depleted. I figured it'd be a no brainer to use all of my income tax to pay down my debt, but I have absolutely no type of cushion due to me having pretty much nothing in my savings account, which has been making me uncomfortable. What would you guys suggest I do? If need be, I can provide my CC balances and interest rates so that you guys can give suggestions as to what exactly to pay off. Also, how do you guys feel about me taking out a personal loan as a way to consolidate my remaining debt?
You need to provide more info like the Util for each card. But to get started, I would start by saying you need to have some money in your savings account. We can't help until we have more info. At this moment, I would avoid type of loan until you paid your debt down to a comfortable level (under 10%)
Here are my balances (odd interest rates, I know):
AE Visa: $1780/2300 23.99%
AE Store Card: $23/700 24.99%
Chase Amazon: $470/500 22.24%
Citi: $1335/1500 13.74%
CapOne: $630/1200 19.80%
Walmart: $360/1350 22.90%
Paypal SC: $180/300 26.99%
And I only considered taking out a loan so that I'll only have one payment per month to make instead of making 7 individual payments per month, I thought it was a good idea lol.
With your tax refund, I would personally pay off the highest interest rate cards first. So, pay off, in this order:
PayPal: $180
AE Store Card: $23
AE Visa: $1297 (Balance remaining: $483)
Also, see what you can do to earn more money, such as selling things that you don't use, picking up extra shifts, etc. You mentioned paying Comcast $15/month. If this is cable TV, I'd seriously consider cutting that off until you get your balances to a more manageable place. And see what you can do to cut down on your food spending.
Good luck.
I'll definitely consider that. I will say, though, that I'd feel a lot better with having as few balances as possible. So as of now, I'm leaning more towards paying off Chase, PayPal, AE Store card, Walmart, and some of CapOne.
I do have 'collectibles' (by my standards, they're collectibles), that I've considered selling. I'm not sure if I mentioned this already, but there's an opening where both of my roommates work that I'm thinking about picking up (two 10 hour shifts a week). Since all three of us are on a budget, we don't have cable TV, just high-speed Internet. As far as my food expense is concerned, the only way to really cut down is to go on a Ramen diet lol. If anyone else has any ideas, feel free to message me.
If I seemed to go off topic a bit, I apologize.
And thank you everyone for your input. I really do appreciate it.
I think that it would be great to pick up those two shifts. I understand the desire to pay off more cards (fewer bills to manage), but by doing so, you are giving the banks with higher APRs more money than you need to. I might even consider moving some of the very high APR debt (like your SmartConnect) account to your Citi card, if it allows balance transfers. If you do this, you can save even more money on interest, which helps you pay down your other balances faster. And since you have a lot of accounts above 20% APR, that is a very good thing. Also, if you think you might run into this problem in the future, have you considered closing accounts as you pay them off? I'd definitely leave the Citi card open (good APR, and it's a Visa, so you can use it anywhere). The rest of them I wouldn't have any problems closing (the APRs on those are incredibly high, I personally only have one account at 22.24% APR, and I'll never carry a balance on that. All of my other cards are below 20%, and I'm going to go for APR reductions on those late this year). Even more so if after you close those accounts if you can get a second major credit card (a Visa/MC/Discover/AMEX) with a lower APR. I absolutely wouldn't apply now though. You'll likely get a bad APR and a toy credit limit. Once you get your UTIL around 30%, I'd seriously consider applying for the Barclaycard Ring since it has an 8% APR, assuming you have no baddies. That will definitely help you pay down your balances faster.