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Digging out of a ton of CC debt and need advice for next step

New Member

Digging out of a ton of CC debt and need advice for next step

Aprox 2 years ago I went from 0 debt to 20k CC debt it wasn't ideal but we managed to pay down, go back up etc but nothing too overwhelming for our income.  It only got worse from there.  I ran up multiple cards to the sum of about 65k in around 6 months time and finally came clean and told him we were in trouble and needed to talk to an advisor.  I bought nothing but digital pixels btw, so there was no taking things back to the store.  I was depressed and addicted to a game you could play on your phone.  Anyways, for about a year we had been attacking this with what seemed like 0 or little progress since it was spread over multiple cards.  2 very large balances and 6 smaller cards.  The one large card 30k CL was the only one making any type of progress to the sum of intrest + 1000$.  About 3 months ago we decided to get even more agressive and cut out everything we could and free up as much money as possible each month and looked into refi options and to our surprise since my husband is in the militarty some of the companies offered us 4%, 5.9% and 0% intrest while he continues his service.  We recived some credit adjustments and wow it really looks like the light is at the end of the tunnel.   

 

So now that you have an idea here's my question.  I'm not sure what to do with these low intrest cards and how to proceed.  I paid off one citi bank card last year with a tax refund and they limit chased me but then raised my limit again but only to half of what it was after 3 months.  We currently owe 12k with 16% intrest- CL 30k 

14k with 4% intrest- CL 17k 

500$ w/ 21% - CL 7k

200$ w/ 20%  - Cl 3800

2700$ w/ 4% - CL 5k

2k w/ 4% cl 5k 

5200 w/ 0% for 18 months CL 7500

0$ with 0% until he seperates CL 5000

0$ with 0% until he seperates CL 6000

about 3 other cards 0$ with limits in the 20k range but 16% intrest balance transfers may be possible with offers of 0% but 3% transfer fees 

 

I am not sure where to go to next.  Obviously the high intrest rate small balance cards, they were left over intrest charges from transfering balances to cards that were given these special intrest rates so those will go away this month.  We have aprox 3k a month to dedicate to getting this gone for good at this point but I feel with so many small min payments that will get eaten away.   Where would you start?  Any and all Suggestions would be helpful..

 

Hubs fico 8 still sits in the 760s but mine is currently just now recovering from the low 600 range due to high Util, since most of these cards were/are not in his name he didn't take as much as a hit and recovered quickly.  I am currently back to 670 range but that is still not anywhere near recovered.   I tried to give as much info as possible for suggestions to be easier.  TIA

Message 1 of 7
6 REPLIES
Established Contributor

Re: Digging out of a ton of CC debt and need advice for next step


@wrote:

Aprox 2 years ago I went from 0 debt to 20k CC debt it wasn't ideal but we managed to pay down, go back up etc but nothing too overwhelming for our income.  It only got worse from there.  I ran up multiple cards to the sum of about 65k in around 6 months time and finally came clean and told him we were in trouble and needed to talk to an advisor.  I bought nothing but digital pixels btw, so there was no taking things back to the store.  I was depressed and addicted to a game you could play on your phone.  Anyways, for about a year we had been attacking this with what seemed like 0 or little progress since it was spread over multiple cards.  2 very large balances and 6 smaller cards.  The one large card 30k CL was the only one making any type of progress to the sum of intrest + 1000$.  About 3 months ago we decided to get even more agressive and cut out everything we could and free up as much money as possible each month and looked into refi options and to our surprise since my husband is in the militarty some of the companies offered us 4%, 5.9% and 0% intrest while he continues his service.  We recived some credit adjustments and wow it really looks like the light is at the end of the tunnel.   

 

So now that you have an idea here's my question.  I'm not sure what to do with these low intrest cards and how to proceed.  I paid off one citi bank card last year with a tax refund and they limit chased me but then raised my limit again but only to half of what it was after 3 months.  We currently owe 12k with 16% intrest- CL 30k 

14k with 4% intrest- CL 17k 

500$ w/ 21% - CL 7k

200$ w/ 20%  - Cl 3800

2700$ w/ 4% - CL 5k

2k w/ 4% cl 5k 

5200 w/ 0% for 18 months CL 7500

0$ with 0% until he seperates CL 5000

0$ with 0% until he seperates CL 6000

about 3 other cards 0$ with limits in the 20k range but 16% intrest balance transfers may be possible with offers of 0% but 3% transfer fees 

 

I am not sure where to go to next.  Obviously the high intrest rate small balance cards, they were left over intrest charges from transfering balances to cards that were given these special intrest rates so those will go away this month.  We have aprox 3k a month to dedicate to getting this gone for good at this point but I feel with so many small min payments that will get eaten away.   Where would you start?  Any and all Suggestions would be helpful..

 

Hubs fico 8 still sits in the 760s but mine is currently just now recovering from the low 600 range due to high Util, since most of these cards were/are not in his name he didn't take as much as a hit and recovered quickly.  I am currently back to 670 range but that is still not anywhere near recovered.   I tried to give as much info as possible for suggestions to be easier.  TIA


If the small balances are bothering you, blow them away first so that they don't continue to bother you. With 12k (or 25k? your list doesnt match you balances) in debt and 3k per month available to throw at the problem, the reality is it doesn't really matter which order you tackle these in because it should all be obliterated in around 5-10 months anyway.

 

The first month you should be able to clear the 200/500 limits entirely, and the second month you should be able to clear the 2000 card. After that, tackle the 2700 then you're left with two cards with balances. At that point I'd say go after the 14k mostly until the 0% ends on the 5k then focus on it before returning to the 14k.

 

Message 2 of 7
Frequent Contributor

Re: Digging out of a ton of CC debt and need advice for next step

Get rid of the $200, $500, and $2000 first.

Then get rid of the $2700.

Then put $2500 towards the $14,000 and $500 towards the $5200 until they're both gone.

Once you are debt-free put $2000 towards your long-term savings every month and don't touch it except to invest.

Put the remaining $1000 into short-term savings monthly and try to limit your spending to half of it.  Once you build this up, this will be your emergency savings.  If it gets up to more than 4 months' expenses, transfer the extra to long-term savings.  

 

Please, stop treating credit like it's your money.  Don't run up your credit cards again; limit spending to what you have in your short-term savings account.  

Message 3 of 7
New Member

Re: Digging out of a ton of CC debt and need advice for next step

I very much appreciate you're frankness. Honestly I never thought I would be in this position but I've learned a very expensive lesson. We have a 1 months salary in liquid savings and a decent portfolio. Our EF requirements aren't the same as most families since the income is guaranteed. I know my post was confusing but in your advice you left out the 12k balance with 16% interest. I'm thinking we need to pay min on all others and knock that away then we can go with the smallest to biggest snowball effect. Hubs doesn't think paying balance transfer fees upfront will do much good since he estimates it will be done in a few months. We've even debated on zeroing our liquid savings but since we are overseas and could be sent back to the US if it take a bad political turn he thinks cash is better to have than having to try to sell stocks or wherever else he keeps our money on short notice. Again thank you!
Message 4 of 7
Community Leader
Super Contributor

Re: Digging out of a ton of CC debt and need advice for next step

Best of luck to you and kudos for tackling the problem and solving it. You really are a role model of not giving up and dealing with the problem. Thanks for sharing.


Daily Drivers: Penfed Platinum Rewards; NFCU GoRewards; Discover..
Message 5 of 7
Super Contributor

Re: Digging out of a ton of CC debt and need advice for next step


@wrote:

Aprox 2 years ago I went from 0 debt to 20k CC debt it wasn't ideal but we managed to pay down, go back up etc but nothing too overwhelming for our income.  It only got worse from there.  I ran up multiple cards to the sum of about 65k in around 6 months time and finally came clean and told him we were in trouble and needed to talk to an advisor.  I bought nothing but digital pixels btw, so there was no taking things back to the store.  I was depressed and addicted to a game you could play on your phone.  Anyways, for about a year we had been attacking this with what seemed like 0 or little progress since it was spread over multiple cards.  2 very large balances and 6 smaller cards.  The one large card 30k CL was the only one making any type of progress to the sum of intrest + 1000$.  About 3 months ago we decided to get even more agressive and cut out everything we could and free up as much money as possible each month and looked into refi options and to our surprise since my husband is in the militarty some of the companies offered us 4%, 5.9% and 0% intrest while he continues his service.  We recived some credit adjustments and wow it really looks like the light is at the end of the tunnel.   

 

So now that you have an idea here's my question.  I'm not sure what to do with these low intrest cards and how to proceed.  I paid off one citi bank card last year with a tax refund and they limit chased me but then raised my limit again but only to half of what it was after 3 months.  We currently owe 12k with 16% intrest- CL 30k 

14k with 4% intrest- CL 17k 

500$ w/ 21% - CL 7k

200$ w/ 20%  - Cl 3800

2700$ w/ 4% - CL 5k

2k w/ 4% cl 5k 

5200 w/ 0% for 18 months CL 7500

0$ with 0% until he seperates CL 5000

0$ with 0% until he seperates CL 6000

about 3 other cards 0$ with limits in the 20k range but 16% intrest balance transfers may be possible with offers of 0% but 3% transfer fees 

 

I am not sure where to go to next.  Obviously the high intrest rate small balance cards, they were left over intrest charges from transfering balances to cards that were given these special intrest rates so those will go away this month.  We have aprox 3k a month to dedicate to getting this gone for good at this point but I feel with so many small min payments that will get eaten away.   Where would you start?  Any and all Suggestions would be helpful..

 

Hubs fico 8 still sits in the 760s but mine is currently just now recovering from the low 600 range due to high Util, since most of these cards were/are not in his name he didn't take as much as a hit and recovered quickly.  I am currently back to 670 range but that is still not anywhere near recovered.   I tried to give as much info as possible for suggestions to be easier.  TIA


My recommendation would be the snowball method : pay off smallest balance first, then next smallest, and so on.


FICO8 EQ 731 TU 765 EX 730 Total revolving 480300
Message 6 of 7
New Contributor

Re: Digging out of a ton of CC debt and need advice for next step

+ 1 on snowball. 

Message 7 of 7