topic Re: What would you in my situation? in Personal Finance

What would you in my situation?

Anonymous — Mon, 31 Dec 2018 20:20:39 GMT

I've read through alot of the topics in this forum over the last year.

I currently have mutliple credit cards and all of them have a balance.

Amex: $500, CL $1000

Amex2: $1200, Cl $2000

Best Buy $1600, CL $3500

BOA: $5100, CL $6000

CCU: $3500, CL $5000

Citi: $3500, CL $4200

Discover: $1700, CL $2500

Suntrust: $1900, CL $2800

WF: $3500, CL $5000

The only two with interest right now are BOA and CCU. CCU is at 13% and BOA is at 29% if I'm not mistaken.

Life happens and I applied for almost all of those credit cards back in July. Kind of got addicted to the approval and then like I said life happened and unfortunately had to put the money on my CC's.

I make roughly $65k/year and have $900 in car payments. No rent. Other expenses come out to about $500/month.

Right now I've been paying down about $650 a month spreaded evenly over my credit cards.

I did see that to boost my score up I should pay off the small debt cards first and also the ones that are charging interest?

What would you suggest my best steps would be.

I'd love to do a balance transfer into one card but I believe I have too many inquiries due to financing 4 cars (this year alone) and opening all of those CC's earlier this year.

Re: What would you in my situation?

Anonymous — Mon, 31 Dec 2018 20:37:35 GMT

If you make 65k a year, and monthly cost of living is 1500-2000. I would throw at least 2k onto CC. I would pay at least 2x min on all cards, then throw more on those high utilization ones: BOA, WF, etc.

Really need to get this under control, aim to cut balance in half within a year.

Re: What would you in my situation?

chiefone4u — Mon, 31 Dec 2018 22:04:18 GMT

Everybody finds a different method that works best for them to stay on track with debt reduction. Balance transfers can or debt consolidation loans can help, but can also cause more harm than good if you put the spend back on the cards without paying in Full every month.

I have found the Snowball effect to work best for me in paying down debt: Make minimum payments on all accounts; use any extra money you can come up with (savings from you budget from not buying a coffee or going to the movies etc) to make larger payments on the lowest balance first -- once paid off use the money you've been paying on that card (won't be missed because you've been paying debt with it) added to the minimum of the next lowest debt until paid off... rinse and repeat. For me, seeing one to three accounts reporting a zero balance every month helps me stay on track.

For you; based on the statement of BoA and CCU being the only two cards charging interest I'd probably tackle those first to save on interest fees. The exception would be if any of those 0% apr cards have been accruing deferred interest and will be expiring any time soon -- in that case zero those cards first.

Re: What would you in my situation?

Revelate — Mon, 31 Dec 2018 22:26:53 GMT

Find an approach that works for you.

Snowball is mathematically slower getting out of debt: giving more of my money to banks is not smart in my book. As a result, simply sort your credit cards (and loans) by APR in decreasing order and just work your way down the list.

29% on any credit card is absurd, pay that off with a quickness even if it's only 20%.

Ultimately if you have to Snowball because that's the only way to stick to a payment plan, go for it... but otherwise throw your cash flow at your highest APR's first and get out of debt the fastest. Keeping score based on interest payments or some other metric should be analagous to number of credit cards at 0 I'd suggest.

Re: What would you in my situation?

CreditInspired — Tue, 01 Jan 2019 00:52:37 GMT

Welcome rjames

The good news is that you realize and accept that you need help. Excellent move.

What you have to do immediately is STOP using your CCs! This is VIP!

Two years ago when I first found MyFICO, I’ll never forget a post I read but I don’t remember the author. He/she said that they put all their CCs in a ziplock bag with water and threw it in the freezer. If that’s what you have to do, do it. Get the CCs out of easy reach.

Then, follow the advice from the other posters on how to pay your debt down quickly.

GL2U.

Re: What would you in my situation?

HeavenOhio — Tue, 01 Jan 2019 02:51:36 GMT

Welcome, @Anonymous.

I'd go highest interest first with the provision that all cards get more than the minimum each month.

If your utilization were in rougher shape, I'd suggest getting all cards down to below 68.9% utilization before embarking on highest interest first. I think you're OK as far as adverse action (AA), though. Just make sure that the banks see balances going steadily downward.

I'm a fan of snowballing when there are tiny balances that are easy targets. It's nice to get balances like that off the books and reset grace periods. After the easy snowballs, one can shift to high interest first or whatever. However, in this case, no balances stand out as small.

Re: What would you in my situation?

Anonymous — Tue, 01 Jan 2019 03:03:51 GMT

The best way to do this by far is to tackle the highest interest first.

Get an app like Fudget (free for iOS and Android), put in your monthly income, put in your expenses, that will give you your money available for paying down debt. Add another expense to that budget for money needed for groceries and other things.

Now go open another budget and take the amount that is left over after all expenses and your spending money have been accounted for and add each credit card you have a balance on and put 2x minimum for them except the BoA

What’s left is your monthly payment towards BoA.

Fudget even has a feature that lets you swipe left to mark debts as paid and you can set the dates for each.

I literally don’t know what I would do without it.

I am already budgeted through April as you can see.

Re: What would you in my situation?

Anonymous — Tue, 01 Jan 2019 04:17:01 GMT

@Anonymous wrote:

I did see that to boost my score up I should pay off the small debt cards first and also the ones that are charging interest?

That is not true. Neither action is best if your primary goal is to make a quick improvement to your score. If score improvement is the main goal, you should do this in the following order:

(1) Pay all cards to below 87%

(2) Pay all cards to below 67%

(3) Pay all cards to below 47%

Then after that you could choose the debt payoff plan that works best for you.

I am not saying that you ought to use the strategy I mention above. I am just answering your question, which is whether the two things you describe were the best ways to produce a score improvement.

If you have a longer timeframe, then the best way is whatever strategy will ensure that you pay off all of your CC debt and never carry a balance again. All roads lead to Rome in this sense -- your score will end up at the same place once you get the debt paid off.

I also like CreditInspired's suggestion to stop using CCs until all debt is paid off.

Re: What would you in my situation?

Anonymous — Wed, 02 Jan 2019 14:39:50 GMT

Thank you for all the replies!

I have stopped using my credit cards. Like I said life happened a few months ago and thats why so much was needed to put onto credit cards.

I think I'll start with getting a budget app like suggested and find out exactly just how much I can throw at my credit cards.

From there it'll be double the minimums on the 0% cards and all the rest going to the high interest card.

Thank you again for all the suggestions!

Re: What would you in my situation?

Anonymous — Wed, 02 Jan 2019 15:20:44 GMT

@Anonymous wrote:
Thank you for all the replies!

I have stopped using my credit cards. Like I said life happened a few months ago and thats why so much was needed to put onto credit cards.

I think I'll start with getting a budget app like suggested and find out exactly just how much I can throw at my credit cards.
From there it'll be double the minimums on the 0% cards and all the rest going to the high interest card.

Thank you again for all the suggestions!

The budget idea works for me. Needed to start doing repairs and work on energy conservation and the costs got out of hand. Was able to catch a couple of 0% BTs for a twelve month period. To keep things under control I use the budget to ensure regular life items are paid and the rest is being thrown at the debt for improvements with a twelve month pay off so as to NOT pay interest. Did notice that some FICO Score and Vantage Score models DO NOT LIKE my BTs ($645 & $1,670 remaining) ... ! Funny, as the two together are closer to 1.5% utilization for my total available!

Re: What would you in my situation?

SouthJamaica — Wed, 02 Jan 2019 21:32:13 GMT

@Anonymous wrote:
I've read through alot of the topics in this forum over the last year.

I currently have mutliple credit cards and all of them have a balance.

Amex: $500, CL $1000
Amex2: $1200, Cl $2000
Best Buy $1600, CL $3500
BOA: $5100, CL $6000
CCU: $3500, CL $5000
Citi: $3500, CL $4200
Discover: $1700, CL $2500
Suntrust: $1900, CL $2800
WF: $3500, CL $5000

The only two with interest right now are BOA and CCU. CCU is at 13% and BOA is at 29% if I'm not mistaken.
Life happens and I applied for almost all of those credit cards back in July. Kind of got addicted to the approval and then like I said life happened and unfortunately had to put the money on my CC's.
I make roughly $65k/year and have $900 in car payments. No rent. Other expenses come out to about $500/month.
Right now I've been paying down about $650 a month spreaded evenly over my credit cards.

I did see that to boost my score up I should pay off the small debt cards first and also the ones that are charging interest?

What would you suggest my best steps would be.

I'd love to do a balance transfer into one card but I believe I have too many inquiries due to financing 4 cars (this year alone) and opening all of those CC's earlier this year.

I would go with the snowball method.

1. Stop using cards.
2. Pay off smallest balance first, then next smallest, and so on.
3. On other cards pay minimum + something each month.
As each balance turns to zero, that will free up your remaining monthly cash to apply to the next smallest balance.

Re: What would you in my situation?

Anonymous — Thu, 03 Jan 2019 05:42:01 GMT

@SouthJamaica wrote:
@Anonymous wrote:
I've read through alot of the topics in this forum over the last year.

I currently have mutliple credit cards and all of them have a balance.

Amex: $500, CL $1000
Amex2: $1200, Cl $2000
Best Buy $1600, CL $3500
BOA: $5100, CL $6000
CCU: $3500, CL $5000
Citi: $3500, CL $4200
Discover: $1700, CL $2500
Suntrust: $1900, CL $2800
WF: $3500, CL $5000

The only two with interest right now are BOA and CCU. CCU is at 13% and BOA is at 29% if I'm not mistaken.
Life happens and I applied for almost all of those credit cards back in July. Kind of got addicted to the approval and then like I said life happened and unfortunately had to put the money on my CC's.
I make roughly $65k/year and have $900 in car payments. No rent. Other expenses come out to about $500/month.
Right now I've been paying down about $650 a month spreaded evenly over my credit cards.

I did see that to boost my score up I should pay off the small debt cards first and also the ones that are charging interest?

What would you suggest my best steps would be.

I'd love to do a balance transfer into one card but I believe I have too many inquiries due to financing 4 cars (this year alone) and opening all of those CC's earlier this year.
I would go with the snowball method.
1. Stop using cards.
2. Pay off smallest balance first, then next smallest, and so on.
3. On other cards pay minimum + something each month.
As each balance turns to zero, that will free up your remaining monthly cash to apply to the next smallest balance.

Snowball will cost OP astronomical interest though since the BoA card has 29% and most of the cards have zero.

Its just as easy to make a budget, add an additional amount for other expenditures, then take what’s left over and subtract 2X mins for each card and then throw the rest of the lump sum on the BoA card. As cards get paid off, you just remove them from the budget and take that 2x min payment that’s left over and add it into the highest interest debt.

Re: What would you in my situation?

Kree — Thu, 03 Jan 2019 13:43:14 GMT

@Anonymous wrote:
@SouthJamaica wrote:
@Anonymous wrote:
I've read through alot of the topics in this forum over the last year.

I currently have mutliple credit cards and all of them have a balance.

Amex: $500, CL $1000
Amex2: $1200, Cl $2000
Best Buy $1600, CL $3500
BOA: $5100, CL $6000
CCU: $3500, CL $5000
Citi: $3500, CL $4200
Discover: $1700, CL $2500
Suntrust: $1900, CL $2800
WF: $3500, CL $5000

The only two with interest right now are BOA and CCU. CCU is at 13% and BOA is at 29% if I'm not mistaken.
Life happens and I applied for almost all of those credit cards back in July. Kind of got addicted to the approval and then like I said life happened and unfortunately had to put the money on my CC's.
I make roughly $65k/year and have $900 in car payments. No rent. Other expenses come out to about $500/month.
Right now I've been paying down about $650 a month spreaded evenly over my credit cards.

I did see that to boost my score up I should pay off the small debt cards first and also the ones that are charging interest?

What would you suggest my best steps would be.

I'd love to do a balance transfer into one card but I believe I have too many inquiries due to financing 4 cars (this year alone) and opening all of those CC's earlier this year.
I would go with the snowball method.
1. Stop using cards.
2. Pay off smallest balance first, then next smallest, and so on.
3. On other cards pay minimum + something each month.
As each balance turns to zero, that will free up your remaining monthly cash to apply to the next smallest balance.

Snowball will cost OP astronomical interest though since the BoA card has 29% and most of the cards have zero.

Its just as easy to make a budget, add an additional amount for other expenditures, then take what’s left over and subtract 2X mins for each card and then throw the rest of the lump sum on the BoA card. As cards get paid off, you just remove them from the budget and take that 2x min payment that’s left over and add it into the highest interest debt.

Only other consideration is if the interest is 0% for a period of time, or if it is deferred. Paying off a deferred card before back interest is added on would be a priority if the amount of interest would be more than new interest on the higher card during the repayment period.

Re: What would you in my situation?

Anonymous — Thu, 03 Jan 2019 13:57:51 GMT

@Kree wrote:
@Anonymous wrote:
@SouthJamaica wrote:
@Anonymous wrote:
I've read through alot of the topics in this forum over the last year.

I currently have mutliple credit cards and all of them have a balance.

Amex: $500, CL $1000
Amex2: $1200, Cl $2000
Best Buy $1600, CL $3500
BOA: $5100, CL $6000
CCU: $3500, CL $5000
Citi: $3500, CL $4200
Discover: $1700, CL $2500
Suntrust: $1900, CL $2800
WF: $3500, CL $5000

The only two with interest right now are BOA and CCU. CCU is at 13% and BOA is at 29% if I'm not mistaken.
Life happens and I applied for almost all of those credit cards back in July. Kind of got addicted to the approval and then like I said life happened and unfortunately had to put the money on my CC's.
I make roughly $65k/year and have $900 in car payments. No rent. Other expenses come out to about $500/month.
Right now I've been paying down about $650 a month spreaded evenly over my credit cards.

I did see that to boost my score up I should pay off the small debt cards first and also the ones that are charging interest?

What would you suggest my best steps would be.

I'd love to do a balance transfer into one card but I believe I have too many inquiries due to financing 4 cars (this year alone) and opening all of those CC's earlier this year.
I would go with the snowball method.
1. Stop using cards.
2. Pay off smallest balance first, then next smallest, and so on.
3. On other cards pay minimum + something each month.
As each balance turns to zero, that will free up your remaining monthly cash to apply to the next smallest balance.

Snowball will cost OP astronomical interest though since the BoA card has 29% and most of the cards have zero.

Its just as easy to make a budget, add an additional amount for other expenditures, then take what’s left over and subtract 2X mins for each card and then throw the rest of the lump sum on the BoA card. As cards get paid off, you just remove them from the budget and take that 2x min payment that’s left over and add it into the highest interest debt.
Only other consideration is if the interest is 0% for a period of time, or if it is deferred. Paying off a deferred card before back interest is added on would be a priority if the amount of interest would be more than new interest on the higher card during the repayment period.

True and this is something that would definitely need to be looked at with the Best Buy card, I didn’t think of that since I am not accustomed to using deferred interest financing.

Re: What would you in my situation?

Anonymous — Fri, 25 Jan 2019 18:07:35 GMT

I have my best buy card to where it is making payments that it'll be paid off by the time the 0% offer is over. Well 1 month before it is over.

I also just finished a settlement from a car wreck almost a year ago and got a check for around $3700.

Is there any certain cards I should pay off or continue the snowball?

Also my Amex with the $2000 limit gave me a CLD to $1300.. They said if I send a $580 payment by march they will restore my credit limit.

Thanks

Re: What would you in my situation?

CreditInspired — Fri, 25 Jan 2019 18:27:07 GMT

First thing: Absolutely make the $580 payment to AmX yesterday to restore your CLI.

Re: What would you in my situation?

Anonymous — Fri, 25 Jan 2019 18:29:21 GMT

The CLD jsut happened two days ago.

How long will it take to go back once I make the payment?

Re: What would you in my situation?

CreditInspired — Fri, 25 Jan 2019 18:31:29 GMT

I don’t know but I would definitely call them and ask. Paying it quickly makes them realize you do have the funds to make big payments.

Re: What would you in my situation?

Anonymous — Sat, 26 Jan 2019 02:30:33 GMT

I would pay your minimums across the board. With what ever money left over start putting into your smallest balance. Pay off cards in order feom smallest to largest while continuing to pay the minimum on all others

Re: What would you in my situation?

SouthJamaica — Sat, 26 Jan 2019 05:41:09 GMT

@Anonymous wrote:
I've read through alot of the topics in this forum over the last year.

I currently have mutliple credit cards and all of them have a balance.

Amex: $500, CL $1000
Amex2: $1200, Cl $2000
Best Buy $1600, CL $3500
BOA: $5100, CL $6000
CCU: $3500, CL $5000
Citi: $3500, CL $4200
Discover: $1700, CL $2500
Suntrust: $1900, CL $2800
WF: $3500, CL $5000

The only two with interest right now are BOA and CCU. CCU is at 13% and BOA is at 29% if I'm not mistaken.
Life happens and I applied for almost all of those credit cards back in July. Kind of got addicted to the approval and then like I said life happened and unfortunately had to put the money on my CC's.
I make roughly $65k/year and have $900 in car payments. No rent. Other expenses come out to about $500/month.
Right now I've been paying down about $650 a month spreaded evenly over my credit cards.

I did see that to boost my score up I should pay off the small debt cards first and also the ones that are charging interest?

What would you suggest my best steps would be.

I'd love to do a balance transfer into one card but I believe I have too many inquiries due to financing 4 cars (this year alone) and opening all of those CC's earlier this year.

1. Stop using your credit cards.

2. Apply every dollar you can spare to the BOA card. On other cards pay minimum + something each month.

3. When you get rid of the BOA balance, go into the snowball method: Pay off smallest balance first, then next smallest, and so on. As each balance turns to zero, that will free up your remaining monthly cash to apply to the next smallest balance.