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Need CC advice - drowning...

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Anonymous
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Need CC advice - drowning...

We need to fix our CC debt - but I need some help. Does anyone here suggest going through a debt consolidator and if we do, what does that mean for our credit?

 

Is there wiggle room with credit card companies to negotiate or is it better to just pay the minimum as required... it's hard to add to it right now... it's so much and it's becoming harder and more stressful.I didn't know if anything was negotiable like minimum payments or apr's. Our FICO is low b/c of all our revolving credit. I'm afraid we are on a downward spiral unless we make a move, and quick.

 

We have a strong income - but also a lot of CC debt.

 

 

Message 1 of 32
31 REPLIES 31
yfan
Valued Contributor

Re: Need CC advice - drowning...

Can you list your cards, interest rates, limits and balances? Also, how much income do you have available to pay debts? This should cut out as much non necessary expense as possible, such as eating out, shopping for things you don't immediately need to survive, etc.
Message 2 of 32
Anonymous
Not applicable

Re: Need CC advice - drowning...

Sorry you are going through this. The guru's (and morons like myself) will need more info to offer advice - which should all be taken with a grain of salt. What cards with what limits and APR's and current debt on each? What is the total income? What other expenses, like rent or mortgage payment, food, etc;... 

 

Generally, most cc lenders aren't interested in why you can't pay and are rigid. Getting into trouble is easy. Getting out is hard. And stressful. Don't jump in any direction until you can get some good sound individualized advice on your unique situation from an unbiased source. We'll help what little we can, but it will come down to you assessing the situation and making tough decisions. Good luck!

Message 3 of 32
Anonymous
Not applicable

Re: Need CC advice - drowning...

Very little open credit on any of these - want to get to the point where we are no longer using them, but need a little wiggle room. Thanks for your help! This is hard for us to do (be open about it) even though no one knows us. We are good, hardworking people and I have the ability to make more with work on the side - but I am a busy mom of 5 kids... with one going into college soon. We are married and have solid employment. I get commission from a side job.

 

Honda Credit Union $4,000 (9%) - montly payment $150 but we use the revolving credit (i know we need to stop)

Chase Amazon 12,231 (16.49%) min payment is $289

Chase Freedom $8249 (17.49%)  min payment is $201

Chase Disney $6349 (13.49%) min payment is $125

Capital One $304 (16.15%) min payment is $304

Citibank Diamond $3,232 (20.24%) min payment is $85

Citibank ThankYou $15,398 (12.24%) min payment is $304 (100 open credit)

AmEx $1391 (14.75%) min payment is $85

Kohls $2899 (22.15%) min payment is $150

 

5 other loans (including house mortgage and income taxes and house insurance):  $3800

 

total:  $5493

 

Income: $7600 with some additional incoming about 7 months of the year between $200-$400.

Message 4 of 32
Anonymous
Not applicable

Re: Need CC advice - drowning...

Well, I sure hate that your followup post got axed. 

 

Basically, almost $5k/month in total payments with a $7600/month (presumably gross) income. That only leaves you with a few hundred at most for groceries, gas, other essentials, and paying down debt. Your income is strong, but not strong enough to keep up with your spending habits. The first step is stop as much spending as possible. Next step is for every capable person to get a part time job.

Message 5 of 32
Anonymous
Not applicable

Re: Need CC advice - drowning...

I know - I don't know what happened... working on retyping it and will add info while doing so.

 

That income was net income. I'll post another - with better information. Thanks so much!

Message 6 of 32
Anonymous
Not applicable

Re: Need CC advice - drowning...

Well, that puts your gross at roughly $110-115k/year and gives you a little more breathing room.  You've got roughly $2600/month above your payments, assuming all car payments and such are included. Take out $500 plus or minus for utilities and for a family of four perhaps $800 for groceries and that leaves you with around $1000-1300 give or take to put on pay down. You'll need to cut out entertainment for the most part and put off getting the new iphone and call the cable company and get a lower tier package with a discount. And buy non-organic food Smiley Very Happy . Seriously, though...your income is good. Your spending is not. That's the thing to focus on first.

Message 7 of 32
Anonymous
Not applicable

Re: Need CC advice - drowning...

Not knowing your particulars, I can only offer these suggestions:

 

Call CC issuers and request a lower APR, some will some wont...depends on your payment history/UTI ect..

 

Stop using credit

 

Pay at least min to keep accounts in good standing

 

The below is from personal experience after my husband died:

 

If you feel that you are not ever going to be able to overcome CC debt, call CC company and ask for a "Hardship Payment Program", they will close your account, set up a reasonable payment plan for you and some will suspend interest while you are on the plan.  Be honest with them and they will work with you, They never asked me what my income was or any other personal information. They continued to report to CRAs as "good standing" as long as you keep your end of the bargain..no lates..no excuses, the companies I worked with also reported payments, bal & UTI (kept getting smaller) so my scores didn't take as a big of hit as they could have. It did affect my available credit but it did not hurt me in the long run. As accounts were paid off, they all reflected "Paid in full/Paid as agreed"

 

I did not do it with every CC I/we had, just the ones that I felt I couldn't manage at a practical level.  Only one BoA ever put a comment on my reports as "payroll deduction" which I found hilarious because I am retired and I have the bank statements to back up that I sent them thru my CU's bill pay option if I was ever asked (and no it hasn't ever hurt me)

 

**Edited to add** BoA closed my 4 CCs way after husband's passing..I had a high UTI and had charged mom's funeral (different CC with NFCU), but it reporting just like the other ones did but with that crap payroll statement

Message 8 of 32
Anonymous
Not applicable

Re: Need CC advice - drowning...

*edited total cc debt- I added wrong!*

 

I thought I posted, but I will try again as I do not see it.

First of - thanks so much, we are hard working people. This has been so hard and stressful for us. We have five kids and one going into college. Luckily - he has that covered with scholarships and savings and that he didn't fall into our footsteps of a poor example of managing finances and credit!

Here goes:

Honda Credit Union $4900 (9.90%) min payment is $150 but we revolve the credit often

Chase Amazon $12231 (16.49%) min payment $295 ($290 avail)
Chase Freedom $8240 (17.49%) min payment $206 ($60 avail)
Chase Disney $6349 (13.49%) min payment $136 (no avail)
Capital One $13261 (16.15) min payment $319 ($300 avail)
Citibank Diamond $3232 (20.24) min payment $85 ($50 avail)
Citibank ThankYou $15398 (12.24%) min payment $101 ($301 avail)
American Express Diamond $1391 (14.75%) min payment $35 ($42)
Kohls $2800 (22.15%) min payment $85

Total:  $1412

Mortgage and 4 other loans:  $3250

Total debt:  $4662

NET Income: $8000 (more exact than previous)

**I get commission that ranges between $200-$800 about 7-8 months of the year

Message 9 of 32
JGGM
Frequent Contributor

Re: Need CC advice - drowning...


@Anonymous wrote:

I thought I posted, but I will try again as I do not see it.

First of - thanks so much, we are hard working people. This has been so hard and stressful for us. We have five kids and one going into college. Luckily - he has that covered with scholarships and savings and that he didn't fall into our footsteps of a poor example of managing finances and credit!

Here goes:

Honda Credit Union $4900 (9.90%) min payment is $150 but we revolve the credit often

Chase Amazon $12231 (16.49%) min payment $295 ($290 avail)
Chase Freedom $8240 (17.49%) min payment $206 ($60 avail)
Chase Disney $6349 (13.49%) min payment $136 (no avail)
Capital One $13261 (16.15) min payment $319 ($300 avail)
Citibank Diamond $3232 (20.24) min payment $85 ($50 avail)
Citibank ThankYou $15398 (12.24%) min payment $101 ($301 avail)
American Express Diamond $1391 (14.75%) min payment $35 ($42)
Kohls $2800 (22.15%) min payment $85

Total:  $1262

Mortgage and 4 other loans:  $3250

Total debt:  $4512

NET Income: $8000 (more exact than previous)

**I get commission that ranges between $200-$800 about 7-8 months of the year


Honestly this doesn't seem so bleak, if you write down a plan and commit to it. You've got $3500 leftover every month. Where is all of that going? Even with groceries, utilities, etc., I'd think there's at least $1,000 there. That being said, I'd use the debt snowball method, payoff smaller balance first (Amex diamond). Then move to kohls, etc.  it's not going to be fun, but you can get out of this with just a little planning and effort. Also, all of these cards should get put up so you don't use them. Once you pay everything off, then you can consider using cards again if you think you've got a handle on things. Just my $.02

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Message 10 of 32
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