topic Re: Credit Card Debt- Please Help!!- UPDATE! in Credit Cards

Credit Card Debt- Please Help!!- UPDATE!

newyearnewcredit — Wed, 18 Oct 2017 23:54:18 GMT

Hey guys! A couple of months ago, I wrote here seeking advice on paying down some credit card debt. I wanted to share my progress as well as extend a thank you to all that extended advice my way! For convenience, the ones that still need to be paid off are in red, the ones in grey are the cards that have been paid off.

NFCU:16,815.61/17300 17.65% (I recently paid this down from the whole card being maxed out )

Capital One 13,499/13500 ~25.65%- Paid down to $10,644.12

Compass 7000/8000 ~13.99%-Paid down to $6992.34

MSCU 3661/3800 ~13.75%

Bancorp South 2463/3000~ 13.40%

Walmart 1671/1800~23.40%- Limit increased to $5,000

SamsClub 1300/1400~23.40%-Limit increased to $5,000

Macy's 6526.30/7000~25.99%

Amazon 2300/2370~26.49% -Limit increased to $3,500

Amex Delta 800/1000~ 19.99%

Regions Bank 2500/3000~ 13.74%

All in all, I've paid off about $11,000 in debt, plus an additional $5,000 I owed in taxes from last year to the IRS. I know some would consider this a minimal amount but I still proud of myself! *pats self on back*

Here is where I need additional advice: I will be getting a $12,000 bonus check from my job, and I am looking for the best way to maximize the payment to further lower my debt to ratio down. I would like to rid myself of the Capital One Card. However, I thought I would ask you guy's expert opinion on how best to utilize this extra money? Any advice would be greatly appreciated. I will be paying off the MSCU card at the end of this month, so you can take that out the equation as well when giving your opinion on the best route to take. I am also looking to trade my vehicle in towards the beginning of next year hopefully a cheaper lease agreement. (I'm currently paying a $850.00 car note towards buying it! I had it set that way because my payments are over four years, so hopefully, I can qualify for a lease payment for at least $200 less than what I'm currently paying ) Thanks in advance for your advice.

Re: Credit Card Debt- Please Help!!- UPDATE!

AverageJoesCredit — Thu, 19 Oct 2017 00:18:18 GMT

Great progress and congrats on those increases No expert on where to attack first but the high aprs might be the best place to start. Best of luck on your great journey to be debt free

Re: Credit Card Debt- Please Help!!- UPDATE!

newyearnewcredit — Thu, 19 Oct 2017 00:36:19 GMT

Average Joe,

Thanks for the kudos. It's definitely a tedious process trying to get out of a deep hole like debt and I'll never go down this hole again!

Re: Credit Card Debt- Please Help!!- UPDATE!

minski — Thu, 19 Oct 2017 00:50:40 GMT

I would probably pay off Walmart, Sam's Club, Macy's and Amazon cards and then not use them again unless I could PIF. Anything remaining I'd probably put toward AmEx Delta or Capital One. Psychologically, it'd feel as if I got rid of a large load based on the number of cards carrying debt as well as most of those cards being with the highest APR.

Great job on reducing debt in 2 months.

Re: Credit Card Debt- Please Help!!- UPDATE!

BronzeTrader — Thu, 19 Oct 2017 00:55:20 GMT

@newyearnewcredit wrote:
Average Joe,
Thanks for the kudos. It's definitely a tedious process trying to get out of a deep hole like debt and I'll never go down this hole again!

newyearnewcredit ,

Just keep in mind that people here have various background. Some people may be retired business owners and can spend $20,000 for a 7-day trip at Ritz Carlton. There are many many more folks who just start out and frequent Walmart and Target. It is very important to keep up yourself and resist the temptations.

As for credit card debt reductions, the best place to start is the card with the highest interest rate. First call the cards to see if they are willing to reduce the rates charged. Some of them will do. Then start to pay off the card with the highest interest rate. Also, see if you can get some loan to help pay off the debts. If you have 401K, you can generally borrow 50% of the money there.

Also, I see you have some high AF cards, such as the AmEx Plat, Delta Gold etc. You may consider to downgrade them to no AF cards, to cut down your spending.

Work hard, make more $$ and reduce spending. Then you'll be in much better shape. Good luck.

Re: Credit Card Debt- Please Help!!- UPDATE!

newyearnewcredit — Thu, 19 Oct 2017 00:57:26 GMT

@minski

The Walmart card is paid off. The cards in the Red are the currently the only ones with balances on them. All the one's in grey are paid off to a zero balance.

Re: Credit Card Debt- Please Help!!- UPDATE!

newyearnewcredit — Thu, 19 Oct 2017 01:02:34 GMT

@bronzetrader

Thanks for the advice! It wouldn't benefit me to trade the Plat in (my annual fee already hit in July and is already paid, I might as well continue to enjoy the benefits the card offers until next July, which is when I will downgrade the card.)

Your suggestion about calling the cc companies to ask for an interest rate reduction is an idea to look into! I also didn't think about a loan, I guess I was scared that I would put myself more into debt- that's if they even approve me for the loan! I appreciate the advice! Thank you so much for taking the time to read and reply!

Re: Credit Card Debt- Please Help!!- UPDATE!

coldfusion — Thu, 19 Oct 2017 01:08:35 GMT

I'd suggest that for now, use that $12,000 to tackle the highest-interest rate balances and get your per-card utilization numbers all under 89%. Something like:

1) Pay off the Macy's card, as it's the remaining card with a balance also at the highest interest rate.

2) Put $1500 toward the NFCU card. That's just enough to get that card's utilization under 89%.

3) Use the remaining ~$4000 against the Cap1 balance.

4) Redirect the minimum payment you had been making toward the Macy's card and put that amount, plus the amount you've already been currently paying, toward the remaining Cap1 balance to whittle it down a bit faster,as that would now be your card with balance at highest interest rate.

5) See if anyone balance-chases you.

Re: Credit Card Debt- Please Help!!- UPDATE!

BronzeTrader — Thu, 19 Oct 2017 01:13:23 GMT

@newyearnewcredit wrote:
@BronzeTrader

Thanks for the advice! It wouldn't benefit me to trade the Plat in (my annual fee already hit in July and is already paid, I might as well continue to enjoy the benefits the card offers until next July, which is when I will downgrade the card.)

Your suggestion about calling the cc companies to ask for an interest rate reduction is an idea to look into! I also didn't think about a loan, I guess I was scared that I would put myself more into debt- that's if they even approve me for the loan! I appreciate the advice! Thank you so much for taking the time to read and reply!

newyearnewcredit, do the math. If you have $40,000 debt on credit cards and the average rate is 18%, you pay $7,200 intetest on your debts. This eats most of your yearly bonus. Your 401K loan charges about 3-5% interest. A personal loan may cost you about 6-7%. So this may saves you about $4,200/year. Then your credit card cost is only about $2,800/year. You job is to reduce the interest you are paying now. You can either get the credit card companies reduce it, or get some loan to swap out. As long as you keep your disciplines, loans will benefit you.

Re: Credit Card Debt- Please Help!!- UPDATE!

Caleb87 — Thu, 19 Oct 2017 01:47:15 GMT

I would just buy a used vehichle for 12 grand and call it good

Re: Credit Card Debt- Please Help!!- UPDATE!

newyearnewcredit — Thu, 19 Oct 2017 01:48:58 GMT

@Caleb

Not a bad idea as well, but turning in my vehicle wouldn't look too nice on my credit report either unfortunately

Re: Credit Card Debt- Please Help!!- UPDATE!

K-in-Boston — Thu, 19 Oct 2017 02:12:26 GMT

Kudos on your progress so far! I know it's not easy. I would suggest paying off the Macy's and then getting the 4 remaining cards under 89% utilization immediately, and then throwing anything left at the CapOne. I wouldn't get rid of the CapOne until your utilization is way down. Your scores aren't bad as is, so they should drastically shoot up about a month after you get those maxed out cards down under 89%. Utilization kills scores. After that, I would see if you prequalify for balance transfer cards - getting that debt down to 0% of at least very low single digits will help repayment dramatically as long as you don't add additional balances on.

As for the car, what are you paying for an APR? I would look into refinancing it through Navy or PenFed over a longer period. Seeing that you paid a very high amount over 4 years isn't going to do the magic on a lease. Your scores and DTI ratio are going to determine you qualifying for a lease. If you can lower your payments by stretching out a low APR loan to 5-6 years that will free up cash to throw at the credit card balances. You can always trade in the vehicle with payments left; just make sure you have equity in it and don't owe more than it's worth.

Re: Credit Card Debt- Please Help!!- UPDATE!

Anonymous — Thu, 19 Oct 2017 02:23:13 GMT

Congratulations! It looks like Macy's has the highest APR pay it off. Then use the normal monthly payment for Macy's and add it to the next highest APR balance payment and keep going from there.