topic Re: What should I do? in Credit Cards

What should I do?

Anonymous — Sun, 17 Jul 2016 00:48:44 GMT

Hi everyone!

I am new here and I need some help from somebody who knows a lot more than me. I am 21, I have 9,800 in credit card debt and yes I am one of those people who fell into the trap of bad credit habits. I have 3 balances and in the past month and half I have elminated two balances on my credit union cards that was a total of 1,100 dollars (which I am proud of). I live alone and away from home and I am supporting myself completely on my own, this is how I got this far into debt, when I didnt have the money I used a credit card.

Here are some details. My score right now is 622, utilization is 50%

I am paying down my debt at a rate of 1,000 dollars a month with the help of a budget I made and working full time. These are my remaining balances:

1. 5700 (highest interest rate)

2. 1600 (current on all payments and have not been charged interest)

3. 2400 (store card, used to buy furniture

I always make payments on time, I am just having trouble gaining ground on some of these. No cards have gone to collections.

My questions are, should I look into a balance transfer card? is my credit score a no go for these? Id like to consolidate so I can start paying everything off one balance and get rid of the high interest I am paying. Or should I do something else? I plan on having this debt paid off in 10-12 months. After which I will keep these accounts open and start using them more responsibly. I have recently been offered a higher paying job that starts September 2017 and I would like to have this all paid off by then.

Thank you all in advance for your help it has taken me a lot to ask for help as I am incredibly embarassed that I let my bad habits get the best of me. I have been making progress though and I just need a little more guidance to finish this debt off.

Re: What should I do?

Anonymous — Sun, 17 Jul 2016 01:07:30 GMT

I think your best bet is to pay the min on the store card and the 0% card. Then put the remainder of the $1000/mo. on the high interest rate card. Pay that one off first. Then snowball that amount into the furniture card. Meaning pay the min on the 0% card and the remaining $1000/mo. on the furniture card. Then when the furniture card is payed off, put the full $1000 on the 0% card. This will save you the most money by paying the least amount of interest.

Good to hear that you're getting a handle on your debt so early on. It sometimes takes a while for people to learn responsible credit use. Good luck on getting that all payed down!

Re: What should I do?

IgnatiusReilly — Sun, 17 Jul 2016 01:43:52 GMT

First off, you are taking responsibility and dealing with this head on. You should be proud of that.

Now then, RMB3 makes a good point and you will get a lot of great advice from the board. Here's mine, greatness not included: Prepare to live like Gandhi until you are out of debt. No non-essential spending. Yeah, it will suck but you will also remember for years the experience and hopefully keep you from getting in this position again.

Good luck. You will get through this!!

Re: What should I do?

thummel — Sun, 17 Jul 2016 01:49:41 GMT

What's the interest on that store card? If it's close to the one with highest interest I myself would eliminate that one first depending on the interest rate.

Re: What should I do?

Anonymous — Sun, 17 Jul 2016 01:54:49 GMT

26.24%, but it is interest free until December 2016. I have been making payments on time and have not been charged interest to date.

Re: What should I do?

IgnatiusReilly — Sun, 17 Jul 2016 01:59:09 GMT

Sgriess, are you absolutely certain you can pay it off completely before the zero interest rate period ends? If not, there is a distinct possibility of having to pay retroactive interest.

Re: What should I do?

Anonymous — Sun, 17 Jul 2016 02:07:03 GMT

I would attempt to get an installment loan from your credit union and combine all balances owed as long as you dont rack up more debt this seems like a good plan. It worked for me AND improved my credit score.

Re: What should I do?

Anonymous — Sun, 17 Jul 2016 02:13:33 GMT

You need to make sure that the zero percent 'furniture' card does not have a retroactive interest clause. If it does, you need to throw everything at that card so it is paid off before the interest free periond ends.

ETA - Normally lurk here, but felt it was important enough to make the above comment to create an account and post. By the time I got that sorted, seems like someone already said it

Re: What should I do?

Anonymous — Sun, 17 Jul 2016 02:10:44 GMT

Good advice here. May I add that be vigilant with your outflow of cash. Only buy "needs," not "wants" and you are on your way!

Re: What should I do?

IgnatiusReilly — Sun, 17 Jul 2016 02:23:36 GMT

What Musiclover said.

I got my first CC around your age. If you had a pulse and were in college, you could get an Amex Green Card. (This was back in the 80's, a time of easy credit and regrettable hairstyles.)

I found out fast owing money I didn't have was as painful as the hangover induced headaches I got running up the debt. So I stopped doing it.

(Spending money I didn't have. I kept up the drinking.)

Re: What should I do?

Anonymous — Sun, 17 Jul 2016 02:37:39 GMT

@Anonymous wrote:
Hi everyone!
I am new here and I need some help from somebody who knows a lot more than me. I am 21, I have 9,800 in credit card debt and yes I am one of those people who fell into the trap of bad credit habits. I have 3 balances and in the past month and half I have elminated two balances on my credit union cards that was a total of 1,100 dollars (which I am proud of). I live alone and away from home and I am supporting myself completely on my own, this is how I got this far into debt, when I didnt have the money I used a credit card.

Here are some details. My score right now is 622, utilization is 50%
I am paying down my debt at a rate of 1,000 dollars a month with the help of a budget I made and working full time. These are my remaining balances:
1. 5700 (highest interest rate)
2. 1600 (current on all payments and have not been charged interest)
3. 2400 (store card, used to buy furniture

I always make payments on time, I am just having trouble gaining ground on some of these. No cards have gone to collections.

My questions are, should I look into a balance transfer card? is my credit score a no go for these? Id like to consolidate so I can start paying everything off one balance and get rid of the high interest I am paying. Or should I do something else? I plan on having this debt paid off in 10-12 months. After which I will keep these accounts open and start using them more responsibly. I have recently been offered a higher paying job that starts September 2017 and I would like to have this all paid off by then.

Thank you all in advance for your help it has taken me a lot to ask for help as I am incredibly embarassed that I let my bad habits get the best of me. I have been making progress though and I just need a little more guidance to finish this debt off.

Great work so far!

(I didn't see this addressed in your post OP, so apologies if I'm telling you something you already know)

If you're going to look for a BT card, you should first do whatever you can to maximize your FICO (obviously), so I would advise you to pay attention not only to your total utilization, but also to the utilization of EACH CARD. If for example you are at 95% UTI on your lowest interest rate card, that will hurt you even with total UTI under 50%. Make sure ALL your balances are EACH reporting the lowest UTI you can accomplish, and you will greatly improve your chance of approval

Re: What should I do?

Anonymous — Sun, 17 Jul 2016 03:36:57 GMT

I will check on that thank you for telling me about this as I had no idea such a thing existed.

Re: What should I do?

Anonymous — Sun, 17 Jul 2016 03:43:44 GMT

These two credit union cards, what are their interest rates and limits? Are they still open? Does it have a balance transfer fee? Any chance you could request an increase on these CU cards? Maybe even use a hard inquiry, and possibly combine the two cards assuming they are with the same bank?

Otherwise if theres no chance of an increase it would be a lot of effort with that low of a limit. Assuming no BT fee, you could still save a little moving a little at atime. But it would be sweet if you could get enough of an increase to transfer at least one of the high interest cards, or even a portion. And like others said not have a high util on a single card for an extended period. It wont hurt for short period in thte grand scheme of things.

And any of the other cards you do have if they are not with synchrony bank it might be worth a shot asking for an increase. And always ask for interest rate reductions.

Doing these things would require your continued commitment since you'd either end up with more available credit, adding an inquies, or maybe even eventually adding another card. And if you were not commited long term it could do more harm than good.

Mirroring another poster, if your interest was closer to 25% on some of these cards, you could qualify for a much lower rate by consolidating.

As far as a balance transfer card, with scores that low, your approval odds are not that great. Stick with the credit union (hopefully you bank there too). Maybe a personal loan from that CU if they are unwilling to increase your limits for the BT idea mentioned above (and actually adding another type of account would help your credit too).You have come to the right place. While 9800 may not sound like a lot for some, those monthly payments can start to rack up fast.

Once you have your new job, utilization down, etc, you would be in a position to have more flexibility to carry a balance like this at no interest, without opening another account by doing a debt shuffle. Moving the balance from a card that is charging you interest, but is sending you balance transfer check offers. Move that balance to a card that has no balance transfer fee, then move it back to the original card for promotional financing.

TLDRish- If you can't get an increase or assistance from your current credit union, snowball the cards. Pay off the highest interest ones first, while making slightly more than the minimum payment on the others. Then when its all paid off, continue to budget even with your increased income. Use coupons whenever possible.

Then start earning rewards for all of your spending in either cash or points that work the best for you. Then the banks are paying YOU!

Re: What should I do?

Anonymous — Sun, 17 Jul 2016 04:33:45 GMT

First of all thank you to everyone for your advice. It is making me feel a little less embarassed about the issue.

To answer your question my credit card through my bank has a 1000 dollar credit limit. They do balance transfers with a 2% fee and 12 months 0% APR and then it goes to 7% even though I will not need a year (or do not plan on taking that long), but I would need to request an increase. The card is completely paid off presently. I also bank with them as well.

Re: What should I do?

Anonymous — Sun, 17 Jul 2016 04:39:46 GMT

@Anonymous wrote:
First of all thank you to everyone for your advice. It is making me feel a little less embarassed about the issue.

To answer your question my credit card through my bank has a 1000 dollar credit limit. They do balance transfers with a 2% fee and 12 months 0% APR and then it goes to 7% even though I will not need a year (or do not plan on taking that long), but I would need to request an increase. The card is completely paid off presently. I also bank with them as well.

That is great that you bank with them. I would call them first thing monday morning! You might be surprised!

Re: What should I do?

Anonymous — Sun, 17 Jul 2016 05:19:27 GMT

Don't be embarrassed....everyone needs help sometimes. We are all human and make mistakes. That's how we learn. 😊 I think it's great you are seeking help before it's too late, you should be proud of that.

@Anonymous wrote:
First of all thank you to everyone for your advice. It is making me feel a little less embarassed about the issue.

Re: What should I do?

Anonymous — Sun, 17 Jul 2016 05:31:20 GMT

@Anonymous wrote:
I will check on that thank you for telling me about this as I had no idea such a thing existed.

I just read a FANTASTIC post in another thread that would definitely help you here - the numbers don't match your situation, but the strategies do:

ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Need-help-with-my-credit/m-p/4682836

look for the post by Thomas_Thumb which is believe is 3rd on the page - it's GOLD

Re: What should I do?

Anonymous — Sun, 17 Jul 2016 20:45:03 GMT

Thank you for sharing this, very helpful

Re: What should I do?

Anonymous — Sun, 17 Jul 2016 21:23:59 GMT

@Justagirl73 wrote:
Don't be embarrassed....everyone needs help sometimes. We are all human and make mistakes. That's how we learn. 😊 I think it's great you are seeking help before it's too late, you should be proud of that.
@Anonymous wrote:
First of all thank you to everyone for your advice. It is making me feel a little less embarassed about the issue.

Re: What should I do?

Anonymous — Sun, 17 Jul 2016 22:11:30 GMT

Pardon my dumb question, but what would I tell them? I have the option to balance transfer to my CU credit card (credit line of 1000 is not enough I would need an increase). They are offering no transfer fee, but 12.10% APR. I think it would be better to just attack the highest rate cards that I am not being charged interest on and pay a little more than minimum on the highest balance (16.24% interest). Should I request an increase from my credit union or maybe even a personal loan? Im hesitant about the loan as I have student loans with them already. I have no outstanding balances on any of my CU accounts so maybe that will help.

Thanks again for the help everyone!!