Advice on tackling debt?

[itgirl74]

IMHO, if you're getting a 9K tax refund each year, you should be increasing your exemptions so you get more money in each paycheck. A refund that big is basically an interest-free loan to the government, and that money could be going toward whatever cc payments you have left after spending this year's refund.

[Anonymous]

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@MrsCHX wrote:

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@Anonymous wrote:

You have an additional issue here that I didn't cover in my original post - once a card starts balance-chasing you, there's no guarantee they will stop.  Marvel may be a greater liability than it appears...after all, how happy will you be if you get it down to 89%, and they lower your limit again?

In light of this info, I have to recommend getting them paid down as far as you can ASAP to hopefully convince them that your troubles are over

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I'm wondering about this. Do you find that's the case when issuers start balance chasing? 

Also want to point out that this is an important point about utilization. People say "it has no memory" and that's true from a scoring perspective. But this happens when your creditors are SPing you and see you have overall high utilization. 

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It's a YMMV thing - some people notice the balance chasing stops when they make a large chunk payment, some don't - but MOST will notice continual chasing on small payments.

There's no guarantee a large payment will make it stop - but it's the only thing that CAN make it stop

[MrsCHX]

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@Anonymous wrote:

It's a YMMV thing - some people notice the balance chasing stops when they make a large chunk payment, some don't - but MOST will notice continual chasing on small payments.

There's no guarantee a large payment will make it stop - but it's the only thing that CAN make it stop

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I see. So it could be worth it to put say $1000 towards that balance.

So OP I'm curious now as to your balances vs limits.

[Anonymous]

Here are my balances vs limits:

Paypal: 4,948 out of 5,000
Walmart: 2,906 out of 3,300
Marvel: 4,565 out of 4,710 (It was 6,000 before the decrease)
Amazon: 1,912 out of 5,000
Target: 1,205 out of 1,700
JCPenney: 1,432 out of 5,300
Credit one: Apparently very recently decreased, 667 out of 650

Merrick: 855 out of 1,000

According to Credit Karma I'm at 46% overall utilization with 19,178 used out of 41,806 in available credit.

[Anonymous]

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@itgirl74 wrote:

IMHO, if you're getting a 9K tax refund each year, you should be increasing your exemptions so you get more money in each paycheck. A refund that big is basically an interest-free loan to the government, and that money could be going toward whatever cc payments you have left after spending this year's refund.

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We already have myself and the kids exempt. The exact amount is closer to 8,600 usually, but I just went back over last years and it was 9,133. So I'm expecting around the same this year.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:
@Anonymous that was my initial plan, but my credit's also important short term because we're hoping to get a car loan with an affordable payment when possible. Hopefully sooner than later because our van hasn't been doing well so who knows when it will die for good. With TygerHawke's idea I was thinking paying off Marvel in full and being done with that one, paying off Target, then putting money towards PayPal and Walmart so they're not close to maxed out and dispersing whatever's left between my Merrick and Credit One since they're also high balance. Again I hate leaving six cards with balances but if I could potentially get a debt consolidation loan that would take the stress off having multiple monthly payments.

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Ford has an excelent point abput paypal - It may be the case that it's not showing up on your reports at all, in which case your paydown efforts are better spent elsewhere.  Have you looked at your reports lately?  If not I recommend a $1 trial with Creditchecktotal - best $1 you will ever spend IMHO

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Oh no it reports haha it's Paypal credit. And that's the one closest to maxed out. Or, was, before I saw that Credit One also decreased my limit and now has me over the limit. Ugh.

But I look at my report all the time. I use Credit Karma. I'll definitely check out the creditchecktotal next!

[Anonymous]

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@Anonymous wrote:
There's a thread floating around someone showed that more paid off tradelines does look better even w/ overall debt amount in dollars is the same. However that is also with the cards not at 90%.
I understand completely I live in California if you don't drive youre employment opportumities suffer. Taking out a high-interest car may be a necessity that can be fixed in a year with a credit union refi once the rest of your stuff is in order

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Yeah that's why I'm so confused haha I've read so many different things about the best route to take. My plan all along was to pay off everything I can fully and leave the higher balance cards. But I know that the high utilzation is reeeeally tanking my score right now, probably moreso than the debt, and getting a car loan is really important. My husband used to work over an hour away and that expedited the s****y condition of our van. Now he works literally down the street but he works at Amscot and they require you drive yourself to and from, otherwise he could take a bike lol. But of course with the kids we need reliable transportation at all times.

I think you're right about the high interest loan and getting it adjusted down the road.  I doubt that even after paying off what I can my credit still won't be good enough to avoid the high interest. Right now they're low 500's according to credit karma.

[IncrsCreditScore1]

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@Anonymous wrote:

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@itgirl74 wrote:

IMHO, if you're getting a 9K tax refund each year, you should be increasing your exemptions so you get more money in each paycheck. A refund that big is basically an interest-free loan to the government, and that money could be going toward whatever cc payments you have left after spending this year's refund.

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We already have myself and the kids exempt. The exact amount is closer to 8,600 usually, but I just went back over last years and it was 9,133. So I'm expecting around the same this year.

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You are not limited to exempting only the number of yourself and your children.  You can exempt numbers to get more money back into each paycheck as itgirl74 stated.  For example, say you are currently exempting 4 people, you can exempt a higher number - it is totally legal, so don't be concerned about that.

Of course, when you file your tax return you can claim only the number of people you are supporting.  By using the above you will get less of a tax return, which is what you want.

And please, Creditmama, do not use CreditOne anymore; it is a card that will nickel and dime you to death.  I recommend you close it as soon as it is paid off.  Then you have to double check to make sure they didn't charge you a few more dollars or cents after you paid it off.  It is a vicious circle.  Just promise yourself you will close it upon it being fully paid.

[itgirl74]

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@IncrsCreditScore wrote:

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@Anonymous wrote:

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@itgirl74 wrote:

IMHO, if you're getting a 9K tax refund each year, you should be increasing your exemptions so you get more money in each paycheck. A refund that big is basically an interest-free loan to the government, and that money could be going toward whatever cc payments you have left after spending this year's refund.

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We already have myself and the kids exempt. The exact amount is closer to 8,600 usually, but I just went back over last years and it was 9,133. So I'm expecting around the same this year.

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You are not limited to exempting only the number of yourself and your children.  You can exempt numbers to get more money back into each paycheck as itgirl74 stated.  For example, say you are currently exempting 4 people, you can exempt a higher number - it is totally legal, so don't be concerned about that.

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So true. There's an online IRS Withholding Calculator that can help you determine how many exemptions to take.

[Anonymous]

Thanks for that advice! I'll look into that immediately. His checks aren't great for a family of five as it is so I'd want them to withhold as little as possible, that helps a lot.

And believe me, credit one is gone as soon as it's paid. It was one of my builder cards and obviously it's of no use to me anymore. I'll most likely pay that one in full if I can and just close it. Merrick too whenever that's paid off.