topic Re: Excessive CC Debt What are my options? in Credit Cards

Excessive CC Debt What are my options?

Anonymous — Sun, 29 Jan 2017 08:13:08 GMT

I have about $12,000 in Credit Card debt it's split between 3 cards and all 3 are on 0% APR Promos (Thank God!). Right now I can only afford to pay the minimum payments but I'm hoping that by May I can but at least a 3k payment into it and hopefully $500 monthly payments (total, not per card) following.

Here's the breakdown:

5.5k on a CU Card promo expires 4/27 then 10.49%
4k on Chase Slate promo expires 5/10 then 19.74%
2.5K on BOA card promo expires 8/5 then 19.74%

Also all of these are at 90% of their limit being utilized I know but I had to I didn't have any other options available at the time. This along with inquiries and my mortgage tanked my score it was 710 now I'm at 655 I'm in tears seriously I worked so hard to get there and I know in time it'll bounce back but it still hurts. I have no late payments (only (2) 30 day lates from 2012).

I've considered getting a debt consolidation loan for maybe the CU and the Slate once they expire it'll keep interest lower than what it is and more time to pay.

So please let me know your thoughts on what are the best solutions I really appreciate it!

Re: Excessive CC Debt What are my options?

oldman425 — Sun, 29 Jan 2017 11:08:15 GMT

I would pay as much as you can afford on the BoA and minimum pay the other two, once it's paid off then work on Chase then finally the CU card.

Re: Excessive CC Debt What are my options?

Anonymous — Sun, 29 Jan 2017 14:31:51 GMT

@Anonymous wrote:
I have about $12,000 in Credit Card debt it's split between 3 cards and all 3 are on 0% APR Promos (Thank God!). Right now I can only afford to pay the minimum payments but I'm hoping that by May I can but at least a 3k payment into it and hopefully $500 monthly payments (total, not per card) following.

Here's the breakdown:

5.5k on a CU Card promo expires 4/27 then 10.49%
4k on Chase Slate promo expires 5/10 then 19.74%
2.5K on BOA card promo expires 8/5 then 19.74%

Also all of these are at 90% of their limit being utilized I know but I had to I didn't have any other options available at the time. This along with inquiries and my mortgage tanked my score it was 710 now I'm at 655 I'm in tears seriously I worked so hard to get there and I know in time it'll bounce back but it still hurts. I have no late payments (only (2) 30 day lates from 2012).

I've considered getting a debt consolidation loan for maybe the CU and the Slate once they expire it'll keep interest lower than what it is and more time to pay.

So please let me know your thoughts on what are the best solutions I really appreciate it!

I'm curious. If you are having difficulty in keeping up with these cards, why then are you applying/applied for multiple business credit cards and requesting CLIs on others? I would think that adding more cards and potential debt is not the best option. I wish you the best in paying the cards that you have and understand that adding more limits can decrease your overall debt and potentially raise your scores but your biggest problem right now is the very high utilization on the 3 cards and the inability to pay them down. Therefore I would caution against adding more cards which could lead to the temptation to just shift and/or add to the existing debt that you have.

I will also add that a debt consolidation loan isn't likely to do you much good. For one, with your current scores you probably won't receive anything close to the lowest APR as possible and secondly, while the $12K seems daunting at this point, it really isn't high enough to give you a significantly lower payment that what you will have with the three cards. You're going to need to come up with a plan to make as high as payments as possible. Cut out unnecessary expenses and consider a part time job if possible. Too often people use debt consolidation loans just to shift balances and in the end no real benefit is realized. Good luck and with the right focus you'll be able to dig yourself out of this hole before too long.

Re: Excessive CC Debt What are my options?

Anonymous — Sun, 29 Jan 2017 18:10:40 GMT

I remember that you had a post about not getting CLIs the other day. These cards were not listed in your list of cards you mentioned. These maxed out cards would be a reason you are not getting increases. Also I saw a post where you said you have a collection. There's more going on than you mention in individual posts.

Re: Excessive CC Debt What are my options?

Anonymous — Sun, 29 Jan 2017 14:51:58 GMT

Irish80 - My fiancée and I just started our own business wholesaling electronics. We are waiting on some inventory from overseas then are marketing it to small local businesses. This will be our source of income we are hoping it goes successfully and have found a good supplier to get our products from now we just need to receive and market them. We aren't biting off more than we can chew so to speak. Because Business Credit is new to us and we have no business credit score we wanted to get 3 revolving TL's going. Also the cards business cards have no APR until October which gives us breathing room to get everything up and running smoothly.

Honestly I think it will be running smoothly with a steady income stream by later this year when we have consistent clients. But those 0% APR promos run out in April/May then the interest begins which is what we don't want. Combined just between the Chase and CU card's interest per month it's over $100. I've seen debt consolidation loans under 10% APR which is why that's something we considered. We don't want to just shift the balance we want not for the interest to become overwhelming.

We are putting all of our time and effort into getting our small business going. So is there anything you would recommend aside from trying to pay it as is? Because $100 a month in interest is too much I know we put ourselves here but we are trying to strategize and be responsible.

Re: Excessive CC Debt What are my options?

Anonymous — Sun, 29 Jan 2017 14:54:43 GMT

Em71 - This specific thread was posted by my fiancée. However we own a home together, have a family together and we both manage each other's financials. Any other posts about CLI's or collections were in regards to my credit.

I apologize for the confusion. But as a side note I am an AU on the Chase Card mentioned above but not the other two because of the high balances I removed myself.

Re: Excessive CC Debt What are my options?

Anonymous — Sun, 29 Jan 2017 15:04:51 GMT

@Anonymous wrote:
Irish80 - My fiancée and I just started our own business wholesaling electronics. We are waiting on some inventory from overseas then are marketing it to small local businesses. This will be our source of income we are hoping it goes successfully and have found a good supplier to get our products from now we just need to receive and market them. We aren't biting off more than we can chew so to speak. Because Business Credit is new to us and we have no business credit score we wanted to get 3 revolving TL's going. Also the cards business cards have no APR until October which gives us breathing room to get everything up and running smoothly.

Honestly I think it will be running smoothly with a steady income stream by later this year when we have consistent clients. But those 0% APR promos run out in April/May then the interest begins which is what we don't want. Combined just between the Chase and CU card's interest per month it's over $100. I've seen debt consolidation loans under 10% APR which is why that's something we considered. We don't want to just shift the balance we want not for the interest to become overwhelming.

We are putting all of our time and effort into getting our small business going. So is there anything you would recommend aside from trying to pay it as is? Because $100 a month in interest is too much I know we put ourselves here but we are trying to strategize and be responsible.

I appreciate your response. I have read your posts in the business forum and I understand your desire to establish business credit. I hope it goes very well for you. You need to be very prudent though in your use of any business credit. Whether the cards have 0% APR or not you still need to repay the cards or you will end up in the same situation you have with your personal cards. It is very difficult to establish a business when you are in debt on the personal side and have difficulty repaying those cards.

As for what you can do I suggested a part time job and cutting your expenses. I don't want to sound too obvious but you either need to increase income or cut expenses. There really isn't any magic thing you can do with more credit to resolve the situation. As I mentioned in my first post I don't think the debt consolidation loan is your best option. You won't get a really low rate right not if approved at all and the $12K just isn't that high to have a huge impact on payments even with a lower rate.

Re: Excessive CC Debt What are my options?

Anonymous — Sun, 29 Jan 2017 15:11:25 GMT

@Anonymous wrote:
My fiancée and I just started our own business wholesaling electronics. We are waiting on some inventory from overseas then are marketing it to small local businesses. This will be our source of income we are hoping it goes successfully and have found a good supplier to get our products from now we just need to receive and market them. We aren't biting off more than we can chew so to speak. Because Business Credit is new to us and we have no business credit score we wanted to get 3 revolving TL's going. Also the cards business cards have no APR until October which gives us breathing room to get everything up and running smoothly.

Honestly I think it will be running smoothly with a steady income stream by later this year when we have consistent clients. But those 0% APR promos run out in April/May then the interest begins which is what we don't want. Combined just between the Chase and CU card's interest per month it's over $100. I've seen debt consolidation loans under 10% APR which is why that's something we considered. We don't want to just shift the balance we want not for the interest to become overwhelming.

We are putting all of our time and effort into getting our small business going. So is there anything you would recommend aside from trying to pay it as is? Because $100 a month in interest is too much I know we put ourselves here but we are trying to strategize and be responsible.

I wish you the very best with your new business, but am concerned about the reality of this whole situation. You may know that many (even most) small businesses operate in the red for the first year of operation, or have very inconsistent income, and sometimes well into the second year. I'm concerned that you're expecting an income windfall that may or may not happen with a new business, and making credit decisions based on possible income.

Re: Excessive CC Debt What are my options?

SouthJamaica — Sun, 29 Jan 2017 15:21:24 GMT

@oldman425 wrote:
I would pay as much as you can afford on the BoA and minimum pay the other two, once it's paid off then work on Chase then finally the CU card.

I agree. Once that balance is paid off the monthly payment will decrease.

Re: Excessive CC Debt What are my options?

Anonymous — Sun, 29 Jan 2017 15:22:13 GMT

Irish80 - (Sorry I can't quote you I'm responding from my Iphone). Another reason we applied for multiple (3 total) Business cards is because they all have sign up bonuses which I believe will help us at least somewhat.

We are being very cautious with our business credit we are not overbuying inventory we are only getting essentials until we believe we can 100% sell our products. Currently for business credit we have about 16k CL combined between 2 cards and we plan for the time being to keep UT under 10%. We have used it for some personal expenses (gas, food, internet) but that is all. Our housing payment and utilities is relatively cheap ($950 a month combined).

For personal the interest just seems overwhelming which is why we are trying months ahead to develop a game plan. I've read Amex sometimes extends your 0% APR promo upon request do you think a CU or Chase would do that? Even an extra 3-6 months would help a lot. My fiancée has a part time job but she isn't able to fully dedicate herself to making this business work while doing so which is why it's moving slowly.

Re: Excessive CC Debt What are my options?

Anonymous — Sun, 29 Jan 2017 15:27:03 GMT

I know most operate in the red in the first year however, our business has no overhead we have to storefront location. Our only overhead is our housing payment which we do use our home for business. Which is why I believe it will be a good source of income (not great but enough to get by until it takes off). And making credit decisions based on this seems reasonable IMHO.

Re: Excessive CC Debt What are my options?

Anonymous — Sun, 29 Jan 2017 23:06:59 GMT

@oldman425 wrote:
I would pay as much as you can afford on the BoA and minimum pay the other two, once it's paid off then work on Chase then finally the CU card.

Why use the snowball here? The BoA card is 0% until the latest date, so I would address that last. I think OP wants to save the most money rather than need the psychological boost of one less debt. I would attack high APRs as they become active, paying off BoA last.

Re: Excessive CC Debt What are my options?

Revelate — Sun, 29 Jan 2017 23:47:13 GMT

@Anonymous wrote:
@oldman425 wrote:
I would pay as much as you can afford on the BoA and minimum pay the other two, once it's paid off then work on Chase then finally the CU card.
Why use the snowball here? The BoA card is 0% until the latest date, so I would address that last. I think OP wants to save the most money rather than need the psychological boost of one less debt. I would attack high APRs as they become active, paying off BoA last.

This is pretty much what I was going to to say: Chase first, probably BOFA second, and the CU card last as the lowest APR... though if you can get additional money to pay off part of the CU card and still handle the BOFA card adroitly by the time it comes off from promo APR, do that.

Re: Excessive CC Debt What are my options?

MrsCHX — Mon, 30 Jan 2017 00:09:28 GMT

Agree with paying off the BOA and put the additional $500 into the Chase. Then paying the minimum on the CU card, while throwing everything at the Chase card. The CU card will have the interest hit because you won't beat the promo period but the interest on the other two is nearly double.

You really need to try to pay the full $6.5k on the BOA and Chase by May. If you are starting with $3k and plan on $500/mo for Jan, Feb, Mar, Apr, May, that's $5,500. You have to come up with another $1k. Cancel some extras for 6 months if you need to (cable, gym, subscriptions, etc) to find that $200/mo.

Then you'll be paying off the 1 card.

Re: Excessive CC Debt What are my options?

Anonymous — Mon, 30 Jan 2017 00:51:34 GMT

Longtimelurker - I was thinking similar which is why I asked again. I was confused like why attack the BOA that is the furthest away.

Do you know if any ever offer to extend my 0% promo or do a rate reduction? (With my Chase or CU Card?)

Re: Excessive CC Debt What are my options?

Anonymous — Mon, 30 Jan 2017 03:43:27 GMT

What do you guys think of this:

I just got approved for a CLI to 13.5k on my NFCU CashRewards Card I saw that they have no Balance Transfer Fee and a 2.99% APR promo for the first 12 months. I'll have to check when this promo expires to sign up for but I would like to use this to carry the balance while making payments and not getting crazy amounts of interest.

What do you think?

Re: Excessive CC Debt What are my options?

Anonymous — Mon, 30 Jan 2017 04:10:42 GMT

I speak as some one who not only has been self employed for almost 40 years but been in all types of busines cycles. 1) Get a part time job even if its evenings or afternoon. I had to due this several times in slow downs. I don't like it but have had to do it. 2) Cut all personal expenses a) no cable b) no eating out c) tv dinner time d) no shiny toys e) no new(er) cars Most small businesses fail within 3 years. #1 reason can't make enough. In the last 7 years in my industry my wife and I have put 5 of our competion under because we have lower costs and better service. We now have all our clients plus theirs.

Re: Excessive CC Debt What are my options?

Anonymous — Mon, 30 Jan 2017 05:01:24 GMT

I think you already know what you want to do and are just wanting anyone to tell you to go that route. I think it is dangerous to rely on balance transfers and to keep moving the balances around from card to card. The balances you are carrying are the real issue, the interest is a sympton not the root cause of your financial situation. Many people have said to cut expenses/increase income. What's the game plan to pay them off? Best of luck in whatever you decide to do to stay ahead of this.

Re: Excessive CC Debt What are my options?

Anonymous — Mon, 30 Jan 2017 05:10:30 GMT

Honestly I think if we had until December we could pay it off, all 3 cards. I know a lot of people don't develop a game plan and end up drowning in debt but that's not the case here.

I honestly believe that our business will work, we have no overhead, we get our inventory overseas at really low pricing and sell wholesale to other stores locally. If we strike out at 10 stores there's another 100 waiting it takes time and perseverance.

Our game plan is to make $500 payments ($400 split between CU/Chase then $100 to BOA) a month starting next month towards this. Which should put a dent in it then if all goes well by the end of summer if all goes well make a one large payment to PIF.

That's the game plan

Re: Excessive CC Debt What are my options?

Anonymous — Mon, 30 Jan 2017 08:20:36 GMT

I think you need a more detailed business plan and seek out lenders for business inventory. Also if you have a good plan you might find a strong backer. Many large towns have investments clubs that will back. Granted you give up something but you get cash that does not have to be paid back for several years.