topic Re: Advice on CC debts in Credit Cards

Advice on CC debts

Anonymous — Mon, 21 Jul 2008 07:43:09 GMT

So, I've got lots of credit card debt that I wish I never gathered and now I need some advice on how to pay it down. I'm looking at just under $25k and although I'm able to make my payments on time, I hate having this debt, it's just something extra to worry about. So, my question is, what is the quickest way to pay these debts off? Should I be focusing on one creditor and paying just minimums on the others or should I split whatever I can afford each month equally among the 4 open accounts I have? Do I have any other options? Or maybe I should just take up a collection... anyone feel like donating to the "I messed up bad and need help from complete strangers to fix my financial problems" fund? LOL

Re: Advice on CC debts

Anonymous — Mon, 21 Jul 2008 08:34:30 GMT

Is there anyway you can consolidate into a low APR card or call the CCCs and work something out with them? I personally don't believe in paying other people since I rather use that money to pay the debt. I think the stuff they do, you can probably do them yourself. Have patience and keep at it.

Re: Advice on CC debts

marty56 — Mon, 21 Jul 2008 09:24:15 GMT

There are 3 ways to play this.

1. Make minimum payments on all cards except the one with the smallest balance and pay extra on it till its paid off. Then attack the next card and so on.

2. FICO aware. make minimum payments on all cards and put the extra money on the cards that are maxed out so you can get util to 50%, then 30% and finally 9% or less.

3. Use a DMP/CCCS to consolidate payments into one monthly statement. This would be if you are having trouble making they payments or dont like paying all the interest.

I was in a DMP but I think #1 is the best way to go. My DMP program used that method.

IMHO I am not a big fan on borrowing to pay of debt. Never do 2nd mortgage or 401k loan.

Re: Advice on CC debts

athensguy — Mon, 21 Jul 2008 12:10:31 GMT

Another option is to see if you can get a consolidation loan from a CU near you.

Re: Advice on CC debts

Scamp — Mon, 21 Jul 2008 13:29:17 GMT

marty56 wrote:
There are 3 ways to play this.

1. Make minimum payments on all cards except the one with the smallest balance and pay extra on it till its paid off. Then attack the next card and so on.

2. FICO aware. make minimum payments on all cards and put the extra money on the cards that are maxed out so you can get util to 50%, then 30% and finally 9% or less.

3. Use a DMP/CCCS to consolidate payments into one monthly statement. This would be if you are having trouble making they payments or dont like paying all the interest.

I was in a DMP but I think #1 is the best way to go. My DMP program used that method.

IMHO I am not a big fan on borrowing to pay of debt. Never do 2nd mortgage or 401k loan.

Just to add to Marty's excellent post:

4. Cost-conscious variation of #'s 1 & 2 - Pay minimum on all cards except the one with highest interest rate; put all extra cash into paying that one off, then tackle the next-highest interest rate card, and so forth. Getting the highest-APR cards paid off saves loads in interest and gives you that much more to put toward paying off your overall cc debt.

When I was faced with a similar situation, I PIFed any cards with a small enough balance that I could do it in one go, then tackled the big-balance cards in APR order.

Definitely try talking to your ccc's and see if they'll work with you on interest rates and in any other ways that will help you pay things down without going to DMP or BK.

Also take a harshly honest look at your monthly expenses and find every single way you can cut those expenses and put that $$ toward your debt pay-off.

Good luck!