topic Re: Best Way to Eliminate Debt? in Credit Cards

Best Way to Eliminate Debt?

Harvey26 — Wed, 26 Jul 2017 01:15:00 GMT

Looking for best way to elimnate all credit card debt.

#1: BOFA: 4.9K @ 11.24% (8K limit)

#2: NFCU GO REWARDS: 4.2K @ 18% (9K limit)

#3 NFCU FLAGSHIP: 4.4K @ 16.24% (10.5K Limit)

#4 Discover: 5.4K @ 0% until Sept. then 17.24% also a 1.9K BT on there 0% for 12months. (6.9K Limit)

#5 Amex BCP: 4.8K @ 0% until Jan. 2018. then 23.99% (10K limit)

#6 Blispay: 1.7K @ 0% until Sept. then Whatever the go to is on the card (5.8K limit)

#7 Macys Amex: $570 @25.24% (18K Limit)

#8 Virginia Credit Union: 3.5K @ 4.99% for 24 months. (5K limit)

Credit Scores Range from 670-690 Depending on Bureau. AAOA Approx 2 years. Inqs. 100 on each CR.

Pretty Sure BTs. Are out of the Question. Unless I find an amazing CU.

Just Need A Good Attack Plan.

Re: Best Way to Eliminate Debt?

Anonymous — Wed, 26 Jul 2017 01:46:31 GMT

Have you called NFCU and asked them if they could lower your rate? Maybe they could change you to a non rewards card with a lower rate. Obviously pay the Macy's card off and never use it again.

Re: Best Way to Eliminate Debt?

Harvey26 — Wed, 26 Jul 2017 01:51:15 GMT

@Anonymous wrote:
Have you called NFCU and asked them if they could lower your rate? Maybe they could change you to a non rewards card with a lower rate. Obviously pay the Macy's card off and never use it again.

Payments on NFCU Cards are mangaible.. But they kind of ticked me off. So really trying to just pay them off and be done with them.

Re: Best Way to Eliminate Debt?

Anonymous — Wed, 26 Jul 2017 01:54:10 GMT

What does your income look like? Fixed expenses? How much can you pay per month?

Re: Best Way to Eliminate Debt?

Harvey26 — Wed, 26 Jul 2017 01:57:39 GMT

@Anonymous wrote:
What does your income look like? Fixed expenses? How much can you pay per month?

52K in income.

Fixed expenses: 600 VW Credit Lease, 284 Car Insurance. Trying to cut out all extra expenses.

Could Pay At least 1-2K per month towards them.

Also Looking to Probably pick up some Part-time to kind of help things along.

Re: Best Way to Eliminate Debt?

Anonymous — Wed, 26 Jul 2017 02:23:12 GMT

First thing you need is to strip your spending down to the bare bone, literally. Your VW is probably your biggest wasteful spending, get rid of it and get yourself a reliable used car for $3k, this will also lower your insurance to double digits for liability only, I found a 2004 VW Jetta 1.8T (76000 miles) for one of my nephews 2 years ago for $2800 and it's still running great today. That is the first thing I would do if I was in your situation.

Re: Best Way to Eliminate Debt?

Anonymous — Wed, 26 Jul 2017 02:32:46 GMT

I started to write a post before I really dug in, but things are a little worse than I assumed.

1) you spend 20% of your annual gross income on your car before fuel cost. This is brutal. How much time left on the lease?

2) 1k per month would bump your debt payments to 40% of gross. This can be (barely) manageable, but 1k a month is going to be very slow with your debt load.

3) 2k per month would put you at 60% of gross. If you're not living rent free, this doesn't seem workable.

The biggest issue is your spending, though I don't know what put you here. The car is a serious problem, and the fact that you didn't cut back sooner is a problem too. The good news is that there is a way out. Start with a serious budget, one that takes into account all spending and leaves you with your possible debt payment. Don't reduce this payment if at all possible. No more debt for now, but you need to look up and work the snowball method with one important caveat: pay off Macy's followed immediately by any 0% debt that will back charge interest if not payed in full. From there, snowball.

I wish I could help more currently, but I can't build my normal spreadsheet while I'm out of town on mobile. I think you should look up a snowball debt calculator and see what different budgets do to the total time and money paid.

A second job or side gig could help a lot, especially if you can net 1k a month.

Re: Best Way to Eliminate Debt?

Anonymous — Wed, 26 Jul 2017 02:36:44 GMT

Honestly OP, it could be a lot worse. It looks like you're at about $30k in CC debt. Throwing 1k-2k a month at that will go a long way. Take the mid point, $1500/mo. You could eliminate that debt in about 2 years if that's all you threw at it. I'm sure you want to beat that time frame, though, so some of the suggestions offered above are solid to help you cut it down faster.

Start with your highest interest rate card and pay it off. Once you do, move on to the next highest. Repeat the process. Constantly request APR reductions from your creditors. Most will probably deny you, but some may approve your request. It looks like your aggregate utilization right now is around 41% give or take, which isn't horrible. Once you get your aggregate utilization down to under 30% or so, you could apply for a Chase Slate or similar BT card and move your debt over to that card, eliminating the interest for the remainder of your payoff period. I'd think you'd be able to do this within about 6 months, so you'd only be paying interest for the next 6 months and then wouldn't have to pay any for the next year and a half once you move the balance to a BT card.

Re: Best Way to Eliminate Debt?

Anonymous — Wed, 26 Jul 2017 02:37:35 GMT

Ouch... that car payment is killing you. Try to sell it if you're not upside down (even with a lease, most lenders will let you sell it), and buy a cheap used car for cash. If you're in the Richmond area (I see VACU on your profile) there's a public auto auction every Friday that has drivable cars for less than $1000. Then with an extra $600+ in your monthly budget you can attack the credit cards.

Re: Best Way to Eliminate Debt?

HeavenOhio — Wed, 26 Jul 2017 08:14:56 GMT

I'd tackle Blispay first. If you don't pay it off by the time the promo ends, you'll be charged interest from the time the charge posted. Then I'd tackle Macy's because the balance is small and the interest is high.

OP, what are your priorities? Do you want to pay the least amount you possibly can, maximize scoring, or zero out as many balances as you can?

Re: Best Way to Eliminate Debt?

Anonymous — Wed, 26 Jul 2017 11:52:22 GMT

I would say the only priority of the OP is eliminating his debt, as that was his thread title and no where did he suggest anything about credit scores in that post. And, I think that's the best bet for anyone really that's tackling debt. Paying it off with the least amount of cost (interest) is paramount to anything else, so it's good to see that the OP is focusing completely on accomplishing that.

Re: Best Way to Eliminate Debt?

Anonymous — Wed, 26 Jul 2017 12:06:51 GMT

I'd pay off the Macy's card first too and then close it or at least sock-drawer it, seeing as it has the highest interest rate among your existing cards and the lowest balance. Then, as you pay down the other cards, think hard about which ones you really need and what kind of interest rates you can pay going forward, and try your best to negotiate APR reductions with any lenders that are willing to do so. Balance transfers can be tricky, if you're trying to keep your credit scores up; but in these circumstances, where your aim is to reduce your debt and end it completely, BT'ing balances from higher-interest cards to lower-interest cards so you can concentrate your debt in as few places as possible is an entirely viable strategy under these circumstances. You should also consider getting a debt-consolidation loan from your credit union if possible. It'll lump all your CC debt together into one package, with hopefully a much lower interest rate than you're paying on some of those cards.

Your overall utilization seems to be at 40% or so, so once you get your debt under contro (eliminate it, as you indicate you want to do)l, I strongly recommend that you set your goal in stone never to let it get above 30% again on any cards that you choose to retain. Keeping utilization below 30% will not only help keep your debt in control but will also reflect positively on your credit scores over the long run. As a bookkeeping measure, I also recommend - which I do - creating a document of some kind, Word or Excel or whatever you have and works best for you, recording your CC limits and balances with per-card utilization and total balances and utilization, and update that on a daily basis. It's easy to lose track of what you're spending with that many cards - I have 8 too - and keeping a detailed record will serve as a useful brake.

I also agree you should end that VW lease - it's one of the biggest single drags on your debt. Look for a good used VW or whichever other make you like, and see what kind of rates you can get on a loan from your credit union. I got a 2016 Hyundai Accent sedan, ex-rental in excellent condition (former rentals are often good bets for used-car purchases these days, because reputable rental companies take care to keep their vehicles in good running order and frequently dispose of late-model vehicles with low mileage to make room for the latest models) in February with a 3.99% loan from Penfed (keeping in mind that I was a little over 2 years out from BK discharge at that time) and pay less than $200 a month on it.

Re: Best Way to Eliminate Debt?

Harvey26 — Wed, 26 Jul 2017 13:05:37 GMT

@HeavenOhio wrote:
I'd tackle Blispay first. If you don't pay it off by the time the promo ends, you'll be charged interest from the time the charge posted. Then I'd tackle Macy's because the balance is small and the interest is high.

OP, what are your priorities? Do you want to pay the least amount you possibly can, maximize scoring, or zero out as many balances as you can?

Scores is a mute point to me. All Reports are on ice. And recently my mother started paying our $250 Phone bill. So thats extra money there. I just want to get out of debt. Without Filing BK or having anything go past due or to collections.

Re: Best Way to Eliminate Debt?

Harvey26 — Wed, 26 Jul 2017 13:20:55 GMT

@Anonymous wrote:
I'd pay off the Macy's card first too and then close it or at least sock-drawer it, seeing as it has the highest interest rate among your existing cards and the lowest balance. Then, as you pay down the other cards, think hard about which ones you really need and what kind of interest rates you can pay going forward, and try your best to negotiate APR reductions with any lenders that are willing to do so. Balance transfers can be tricky, if you're trying to keep your credit scores up; but in these circumstances, where your aim is to reduce your debt and end it completely, BT'ing balances from higher-interest cards to lower-interest cards so you can concentrate your debt in as few places as possible is an entirely viable strategy under these circumstances. You should also consider getting a debt-consolidation loan from your credit union if possible. It'll lump all your CC debt together into one package, with hopefully a much lower interest rate than you're paying on some of those cards.

Your overall utilization seems to be at 40% or so, so once you get your debt under contro (eliminate it, as you indicate you want to do)l, I strongly recommend that you set your goal in stone never to let it get above 30% again on any cards that you choose to retain. Keeping utilization below 30% will not only help keep your debt in control but will also reflect positively on your credit scores over the long run. As a bookkeeping measure, I also recommend - which I do - creating a document of some kind, Word or Excel or whatever you have and works best for you, recording your CC limits and balances with per-card utilization and total balances and utilization, and update that on a daily basis. It's easy to lose track of what you're spending with that many cards - I have 8 too - and keeping a detailed record will serve as a useful brake.

I also agree you should end that VW lease - it's one of the biggest single drags on your debt. Look for a good used VW or whichever other make you like, and see what kind of rates you can get on a loan from your credit union. I got a 2016 Hyundai Accent sedan, ex-rental in excellent condition (former rentals are often good bets for used-car purchases these days, because reputable rental companies take care to keep their vehicles in good running order and frequently dispose of late-model vehicles with low mileage to make room for the latest models) in February with a 3.99% loan from Penfed (keeping in mind that I was a little over 2 years out from BK discharge at that time) and pay less than $200 a month on it.

VW Lease is rather high due to alot of Neg. Equity. So that I am really not concerned about. orginal payment is 551.00 but over paying to kill some negative equity quicker. Have been looking to possibly trade in and get something with lesser of a payment. Like honda or something of that nature.

Re: Best Way to Eliminate Debt?

Anonymous — Wed, 26 Jul 2017 13:39:06 GMT

@Harvey26 wrote:
@Anonymous wrote:
Have you called NFCU and asked them if they could lower your rate? Maybe they could change you to a non rewards card with a lower rate. Obviously pay the Macy's card off and never use it again.

Payments on NFCU Cards are mangaible.. But they kind of ticked me off. So really trying to just pay them off and be done with them.

They are managable? Why pay 18 percent interest that is ridiculous?

Re: Best Way to Eliminate Debt?

Anonymous — Wed, 26 Jul 2017 13:45:50 GMT

@Harvey26 wrote:
@Anonymous wrote:
I'd pay off the Macy's card first too and then close it or at least sock-drawer it, seeing as it has the highest interest rate among your existing cards and the lowest balance. Then, as you pay down the other cards, think hard about which ones you really need and what kind of interest rates you can pay going forward, and try your best to negotiate APR reductions with any lenders that are willing to do so. Balance transfers can be tricky, if you're trying to keep your credit scores up; but in these circumstances, where your aim is to reduce your debt and end it completely, BT'ing balances from higher-interest cards to lower-interest cards so you can concentrate your debt in as few places as possible is an entirely viable strategy under these circumstances. You should also consider getting a debt-consolidation loan from your credit union if possible. It'll lump all your CC debt together into one package, with hopefully a much lower interest rate than you're paying on some of those cards.

Your overall utilization seems to be at 40% or so, so once you get your debt under contro (eliminate it, as you indicate you want to do)l, I strongly recommend that you set your goal in stone never to let it get above 30% again on any cards that you choose to retain. Keeping utilization below 30% will not only help keep your debt in control but will also reflect positively on your credit scores over the long run. As a bookkeeping measure, I also recommend - which I do - creating a document of some kind, Word or Excel or whatever you have and works best for you, recording your CC limits and balances with per-card utilization and total balances and utilization, and update that on a daily basis. It's easy to lose track of what you're spending with that many cards - I have 8 too - and keeping a detailed record will serve as a useful brake.

I also agree you should end that VW lease - it's one of the biggest single drags on your debt. Look for a good used VW or whichever other make you like, and see what kind of rates you can get on a loan from your credit union. I got a 2016 Hyundai Accent sedan, ex-rental in excellent condition (former rentals are often good bets for used-car purchases these days, because reputable rental companies take care to keep their vehicles in good running order and frequently dispose of late-model vehicles with low mileage to make room for the latest models) in February with a 3.99% loan from Penfed (keeping in mind that I was a little over 2 years out from BK discharge at that time) and pay less than $200 a month on it.
VW Lease is rather high due to alot of Neg. Equity. So that I am really not concerned about. orginal payment is 551.00 but over paying to kill some negative equity quicker. Have been looking to possibly trade in and get something with lesser of a payment. Like honda or something of that nature.

How much time do you have on your lease? If it is under warranty and your interest rate wasnt crazy high I would focus on your cards first. If you get your negative equity down and get a new car you will probably be putting your VW negative into a new car.

I can't imagine any sort of car loan interest would be close to the 18 percent you are paying on your NFCU cards.

Re: Best Way to Eliminate Debt?

Harvey26 — Wed, 26 Jul 2017 14:33:35 GMT

@Anonymous wrote:
@Harvey26 wrote:
@Anonymous wrote:
I'd pay off the Macy's card first too and then close it or at least sock-drawer it, seeing as it has the highest interest rate among your existing cards and the lowest balance. Then, as you pay down the other cards, think hard about which ones you really need and what kind of interest rates you can pay going forward, and try your best to negotiate APR reductions with any lenders that are willing to do so. Balance transfers can be tricky, if you're trying to keep your credit scores up; but in these circumstances, where your aim is to reduce your debt and end it completely, BT'ing balances from higher-interest cards to lower-interest cards so you can concentrate your debt in as few places as possible is an entirely viable strategy under these circumstances. You should also consider getting a debt-consolidation loan from your credit union if possible. It'll lump all your CC debt together into one package, with hopefully a much lower interest rate than you're paying on some of those cards.

Your overall utilization seems to be at 40% or so, so once you get your debt under contro (eliminate it, as you indicate you want to do)l, I strongly recommend that you set your goal in stone never to let it get above 30% again on any cards that you choose to retain. Keeping utilization below 30% will not only help keep your debt in control but will also reflect positively on your credit scores over the long run. As a bookkeeping measure, I also recommend - which I do - creating a document of some kind, Word or Excel or whatever you have and works best for you, recording your CC limits and balances with per-card utilization and total balances and utilization, and update that on a daily basis. It's easy to lose track of what you're spending with that many cards - I have 8 too - and keeping a detailed record will serve as a useful brake.

I also agree you should end that VW lease - it's one of the biggest single drags on your debt. Look for a good used VW or whichever other make you like, and see what kind of rates you can get on a loan from your credit union. I got a 2016 Hyundai Accent sedan, ex-rental in excellent condition (former rentals are often good bets for used-car purchases these days, because reputable rental companies take care to keep their vehicles in good running order and frequently dispose of late-model vehicles with low mileage to make room for the latest models) in February with a 3.99% loan from Penfed (keeping in mind that I was a little over 2 years out from BK discharge at that time) and pay less than $200 a month on it.
VW Lease is rather high due to alot of Neg. Equity. So that I am really not concerned about. orginal payment is 551.00 but over paying to kill some negative equity quicker. Have been looking to possibly trade in and get something with lesser of a payment. Like honda or something of that nature.
How much time do you have on your lease? If it is under warranty and your interest rate wasnt crazy high I would focus on your cards first. If you get your negative equity down and get a new car you will probably be putting your VW negative into a new car.

I can't imagine any sort of car loan interest would be close to the 18 percent you are paying on your NFCU cards.

Just began the lease still have at least 46 months left.

Re: Best Way to Eliminate Debt?

HeavenOhio — Wed, 26 Jul 2017 14:36:16 GMT

I wouldn't close anything. While scores aren't a priority, there's no need to take a scoring hit either. Closing cards would result in the loss of utilization "padding."

OP, I have a question on these two:

#4 Discover: 5.4K @ 0% until Sept. then 17.24% also a 1.9K BT on there 0% for 12months. (6.9K Limit)

#8 Virginia Credit Union: 3.5K @ 4.99% for 24 months. (5K limit)

On the Discover card, does 0% on the balance transfer last longer than September? And when does the 24 months of 4.99% interest end on the VCU card?

As I mentioned, I'd do Blispay and Macy's first. After that, I'd mostly go for one card at a time, highest interest first. Things can be shuffled a bit as 0% or low interest periods end. For instance, the AMEX can sit for now, but you might want to shift your attention to it later this fall.

Re: Best Way to Eliminate Debt?

Anonymous — Wed, 26 Jul 2017 17:09:55 GMT

@Harvey26 wrote:
@Anonymous wrote:
@Harvey26 wrote:
@Anonymous wrote:
I'd pay off the Macy's card first too and then close it or at least sock-drawer it, seeing as it has the highest interest rate among your existing cards and the lowest balance. Then, as you pay down the other cards, think hard about which ones you really need and what kind of interest rates you can pay going forward, and try your best to negotiate APR reductions with any lenders that are willing to do so. Balance transfers can be tricky, if you're trying to keep your credit scores up; but in these circumstances, where your aim is to reduce your debt and end it completely, BT'ing balances from higher-interest cards to lower-interest cards so you can concentrate your debt in as few places as possible is an entirely viable strategy under these circumstances. You should also consider getting a debt-consolidation loan from your credit union if possible. It'll lump all your CC debt together into one package, with hopefully a much lower interest rate than you're paying on some of those cards.

Your overall utilization seems to be at 40% or so, so once you get your debt under contro (eliminate it, as you indicate you want to do)l, I strongly recommend that you set your goal in stone never to let it get above 30% again on any cards that you choose to retain. Keeping utilization below 30% will not only help keep your debt in control but will also reflect positively on your credit scores over the long run. As a bookkeeping measure, I also recommend - which I do - creating a document of some kind, Word or Excel or whatever you have and works best for you, recording your CC limits and balances with per-card utilization and total balances and utilization, and update that on a daily basis. It's easy to lose track of what you're spending with that many cards - I have 8 too - and keeping a detailed record will serve as a useful brake.

I also agree you should end that VW lease - it's one of the biggest single drags on your debt. Look for a good used VW or whichever other make you like, and see what kind of rates you can get on a loan from your credit union. I got a 2016 Hyundai Accent sedan, ex-rental in excellent condition (former rentals are often good bets for used-car purchases these days, because reputable rental companies take care to keep their vehicles in good running order and frequently dispose of late-model vehicles with low mileage to make room for the latest models) in February with a 3.99% loan from Penfed (keeping in mind that I was a little over 2 years out from BK discharge at that time) and pay less than $200 a month on it.
VW Lease is rather high due to alot of Neg. Equity. So that I am really not concerned about. orginal payment is 551.00 but over paying to kill some negative equity quicker. Have been looking to possibly trade in and get something with lesser of a payment. Like honda or something of that nature.
How much time do you have on your lease? If it is under warranty and your interest rate wasnt crazy high I would focus on your cards first. If you get your negative equity down and get a new car you will probably be putting your VW negative into a new car.

I can't imagine any sort of car loan interest would be close to the 18 percent you are paying on your NFCU cards.
Just began the lease still have at least 46 months left.

A 48 month lease on a VW and its 515? What are you driving a Golf R? Well there is no chacne of getting out of that anytime soon witth 600 dollar payments.

Re: Best Way to Eliminate Debt?

Harvey26 — Wed, 26 Jul 2017 19:03:20 GMT

@Anonymous wrote:
@Harvey26 wrote:
@Anonymous wrote:
@Harvey26 wrote:
@Anonymous wrote:
I'd pay off the Macy's card first too and then close it or at least sock-drawer it, seeing as it has the highest interest rate among your existing cards and the lowest balance. Then, as you pay down the other cards, think hard about which ones you really need and what kind of interest rates you can pay going forward, and try your best to negotiate APR reductions with any lenders that are willing to do so. Balance transfers can be tricky, if you're trying to keep your credit scores up; but in these circumstances, where your aim is to reduce your debt and end it completely, BT'ing balances from higher-interest cards to lower-interest cards so you can concentrate your debt in as few places as possible is an entirely viable strategy under these circumstances. You should also consider getting a debt-consolidation loan from your credit union if possible. It'll lump all your CC debt together into one package, with hopefully a much lower interest rate than you're paying on some of those cards.

Your overall utilization seems to be at 40% or so, so once you get your debt under contro (eliminate it, as you indicate you want to do)l, I strongly recommend that you set your goal in stone never to let it get above 30% again on any cards that you choose to retain. Keeping utilization below 30% will not only help keep your debt in control but will also reflect positively on your credit scores over the long run. As a bookkeeping measure, I also recommend - which I do - creating a document of some kind, Word or Excel or whatever you have and works best for you, recording your CC limits and balances with per-card utilization and total balances and utilization, and update that on a daily basis. It's easy to lose track of what you're spending with that many cards - I have 8 too - and keeping a detailed record will serve as a useful brake.

I also agree you should end that VW lease - it's one of the biggest single drags on your debt. Look for a good used VW or whichever other make you like, and see what kind of rates you can get on a loan from your credit union. I got a 2016 Hyundai Accent sedan, ex-rental in excellent condition (former rentals are often good bets for used-car purchases these days, because reputable rental companies take care to keep their vehicles in good running order and frequently dispose of late-model vehicles with low mileage to make room for the latest models) in February with a 3.99% loan from Penfed (keeping in mind that I was a little over 2 years out from BK discharge at that time) and pay less than $200 a month on it.
VW Lease is rather high due to alot of Neg. Equity. So that I am really not concerned about. orginal payment is 551.00 but over paying to kill some negative equity quicker. Have been looking to possibly trade in and get something with lesser of a payment. Like honda or something of that nature.
How much time do you have on your lease? If it is under warranty and your interest rate wasnt crazy high I would focus on your cards first. If you get your negative equity down and get a new car you will probably be putting your VW negative into a new car.

I can't imagine any sort of car loan interest would be close to the 18 percent you are paying on your NFCU cards.
Just began the lease still have at least 46 months left.
A 48 month lease on a VW and its 515? What are you driving a Golf R? Well there is no chacne of getting out of that anytime soon witth 600 dollar payments.

Jetta GLI. Yeah. So I havent gotten to my first month with tehe 200 extra dollars yet. Due to not having to pay cell phone bill. But i am actively seeking a part time job or higher paying full time.