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Registered: ‎11-06-2009
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help on best way to tackle paying down CC

Like many on here first time poster but long term lurker.  You guys have given great advice to others on how best to tackle paying down CC debt so I'm going to throw my info out there & see what you guys can come up with for me.  I'm currently paying more than the minimum on all my CC. 

 

I anticipate having about $300 a month extra for the next year to dedicate to strictly paying down CC debt.  This will increase by another $100 a month mid 2010. 

 

I've read the many posts recommending paying down the lowest balances and/or highest interest rate cards first, but wasn't sure how to exactly apply that since I also have a fairly high balance on a store CC that will have high interest bur currently is under a no interest/paymen offer. 

 

So here goes:

 

Visa     773/1000         15%

MC      951/1000         18%    

MC      235/300           21%

MC      485/500           19%    

Visa     288/500           18%

LOC    427/500           15%

Store    1775/1800       ?? 

($400 of the balance has no interest/payments until June 2010 & the rest is no interest/payments until October 2010)

 

Thanks everyone.

 

Super Contributor
Posts: 5,759
Registered: ‎01-28-2008
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Re: help on best way to tackle paying down CC


fixncredit wrote:

Like many on here first time poster but long term lurker.  You guys have given great advice to others on how best to tackle paying down CC debt so I'm going to throw my info out there & see what you guys can come up with for me.  I'm currently paying more than the minimum on all my CC. 

 

I anticipate having about $300 a month extra for the next year to dedicate to strictly paying down CC debt.  This will increase by another $100 a month mid 2010. 

 

I've read the many posts recommending paying down the lowest balances and/or highest interest rate cards first, but wasn't sure how to exactly apply that since I also have a fairly high balance on a store CC that will have high interest bur currently is under a no interest/paymen offer. 

 

So here goes:

 

Visa     773/1000         15%

MC      951/1000         18%    

MC      235/300           21%

MC      485/500           19%    

Visa     288/500           18%

LOC    427/500           15%

Store    1775/1800       ?? 

($400 of the balance has no interest/payments until June 2010 & the rest is no interest/payments until October 2010)

 

Thanks everyone.

 


Welcome to the forum.  If you haven't already, you need to create a budget and stick with it.  Look at your budget to see where you can make cuts to free up more money.  A part-time job in addition to a full-time job would knock your small debt out.  Since you have 0% teaser rates going for you, your best option is pay small balances off first.  Try selling some things you no longer need to get rid of the small balances.  I wish you well. 

 

 

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Posts: 3,091
Registered: ‎08-09-2008
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Re: help on best way to tackle paying down CC

[ Edited ]

Hi fixncredit! Welcome aboard! Smiley Happy

 

Huge congrats on deciding to make a plan to become debt free. Here's a few additional questions that will help everyone make their best recommendations:

 

What's your current minimum payment on each card?

 

You mentioned that you anticipate having $300 per month "extra" for your pay down, but is that over and above what you currently pay for minimums? Or, do you have $300 total to make credit card payments (later to be $400 mid 2010)?

 

Would you mind divulging your credit card issuers (e.g. CapitalOne Visa or Chase MasterCard)? The reason that I'm asking about this is because it may influence the advice that some members might have about the order of a debt snowball approach. Some lenders may get nervous after too many minimum payments, etc...

Message Edited by LilMirth on 11-06-2009 11:17 AM

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New Contributor
Posts: 80
Registered: ‎10-09-2009
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Re: help on best way to tackle paying down CC

[ Edited ]

Well my opinion on this would be to use all of your extra cash to try and tackle the cards that have the highest interest rates FIRST, because that is where you will make the most progress. I know others will chime in on this but that's my two cents.

 

Good Luck

Message Edited by JoJo74 on 11-06-2009 08:42 AM
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Re: help on best way to tackle paying down CC

Hi thanks for the responses.  Yes I have a monthly budget & I've been sticking go that.  No the $300 (then $400) is extra money because I sold one of my cars to a neighbor that gave me $1,000 down (which went to pay a bunch of bills) and is paying $250/month for a year.  He's reliable so I know I will get the money.  The other $100 will be coming from a loan I will have paid off mid next year.  Since I don't currently have these amounts in my budget it will be easy to direct them to paying down my CC.

 

The minimum monthly payments are around $15-$20 for all the cards. 

 

I guess my main question is about the store card (Sears) & how to work in the payments for that since it currently has no interest/payments until 2010.  Do I work on paying off my other smaller amounts first & then work on that or should I pay them a little something to get that balance down??

Valued Member
Posts: 41
Registered: ‎01-23-2008
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Re: help on best way to tackle paying down CC

The way I work my store credit cards like this is divide the balance by the number of months you think will make a comfortable payment. For example, if you divide $1,800 (approximate balance) by 6 it's $300 per month. If that's comfortable to pay, then you start paying $300 per month 6 months before that card's interest will kick in. Keep dividing by different numbers of months until you find an amount that is comfortable and then just pay that amount for each of those months prior to the interest kicking in. I find this easier than relying on some big chunk of money to come in and pay them off, you never know what can happen and wipe out that cash. I'd then take what's left and pay them starting with the lowest balance first, regardless of interest. I know most people say pay highest interest first, but I think the momentum you'll gain by actually seeing cards getting paid off will keep you going and in the long run that will outweigh the extra interest you might pay.

 

Just my opinion! 

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Frequent Contributor
Posts: 274
Registered: ‎12-31-2008
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Re: help on best way to tackle paying down CC


fixncredit wrote:

Like many on here first time poster but long term lurker.  You guys have given great advice to others on how best to tackle paying down CC debt so I'm going to throw my info out there & see what you guys can come up with for me.  I'm currently paying more than the minimum on all my CC. 

 

I anticipate having about $300 a month extra for the next year to dedicate to strictly paying down CC debt.  This will increase by another $100 a month mid 2010. 

 

I've read the many posts recommending paying down the lowest balances and/or highest interest rate cards first, but wasn't sure how to exactly apply that since I also have a fairly high balance on a store CC that will have high interest bur currently is under a no interest/paymen offer. 

 

So here goes:

 

Visa     773/1000         15%

MC      951/1000         18%    

MC      235/300           21%

MC      485/500           19%    

Visa     288/500           18%

LOC    427/500           15%

Store    1775/1800       ?? 

($400 of the balance has no interest/payments until June 2010 & the rest is no interest/payments until October 2010)

 

Thanks everyone.

 


 

If you have $300 extra a month, I would:

Pay off Visa first month, apply extra $12 to LOC

Pay off MC second month, apply extra $65 to LOC

Pay down LOC to $50 on 3rd month

Pay off LC 4th month, apply extra $250 to MC

Pay off MC 5th month, apply extra $65 to store - you now have: Store @ $1710, MC @ $951 (minus whatever you've been paying), Visa @ $773 (minus whatever you've been paying) and 3 paid off cards!

I would then apply $100 to each of the three remaining lines... That means the Visa should be gone in about 7 months, the MC in about 7 months (the extra $100 should go on this when you get it)...

 

That will then leave you $300 + minimums from those cards to put on the Store....additionally, that means that one year from now, all you'll have is the store.  Any extra money you might get, put into a savings fund to prevent having to carry a balance in the future!

 

good luck!

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Registered: ‎01-08-2009
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Re: help on best way to tackle paying down CC

I found your advice insightful.  Great job Peach8321 and I wish fixncredit the best!
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