topic Re: In debt! What credit card should I pay First! in General Credit Topics

In debt! What credit card should I pay First!

elaine829 — Sun, 02 May 2010 02:28:50 GMT

I have gotten in credit card debt. My credit cards are:

JCPENNEY BALANCE 1183 MINIMUM PAYMENT IS 59 CREDIT LIMIIT IS 2000. wAS 1800 jUST GOT AUTOMATIC CREDIT INCREASE OF 200.

MACYS BALANCE 1405 MINIMU PAYMENT IS 42 CREDIT LIIMIT IS 2500.

KAYS JEWELER BALANCE IS 277 CREDIT LIMIT 7500 MINIMUM PAYMENT 50

HOME DEPOT BALANCE 710 MINIMUM PAYMENT 25 CREDIT LIMIT 1000 have a promotional period expirIing aug 300 dollars

BANANA REPUBLIC BALANCE 244 MINIMUM PAYMENT 10 CREDIT LIMIT 700

CREDIT ONE BALANCE 920 MINIMUM PAYMENT 60 CREDIT LIMIT 1025

most my CREDIT CARDs HAVE INTERST RATES ARE BETWEEN ARE BETWEEN 17-20 PERCENT.

I HAVE 200 DOLLARS EXTRA A MONTH TO PAY TOWARD CREDIT CARD. WHAT CREDIT CARD SHOULD I START WITH. ANY INPUT IS APPRECIATED

Re: In debt! What credit card should I pay First!

Anonymous — Sun, 02 May 2010 02:38:37 GMT

I would pay smallest to biggest. Every time one is paid put that minimum payment on the next balance.

Re: In debt! What credit card should I pay First!

Anonymous — Sun, 02 May 2010 02:41:06 GMT

Ditto. Start with those two small ones first and then work your way up to the larger ones. Pay off the smallest to the largest while making the minimum payments on the other cards.

Re: In debt! What credit card should I pay First!

Anonymous — Sun, 02 May 2010 02:51:19 GMT

Paying in order of highest APR usually will get you paid off sooner with least interest paid.

Re: In debt! What credit card should I pay First!

Uniqua — Mon, 03 May 2010 01:48:37 GMT

Pay off the debt that has the highest annual percentage rate FIRST. Then, pay down the others (starting from the next highest APR on down).

Re: In debt! What credit card should I pay First!

bakalao2k — Tue, 04 May 2010 19:04:50 GMT

@elaine829 wrote:
I have gotten in credit card debt. My credit cards are:
JCPENNEY BALANCE 1183 MINIMUM PAYMENT IS 59 CREDIT LIMIIT IS 2000. wAS 1800 jUST GOT AUTOMATIC CREDIT INCREASE OF 200.
MACYS BALANCE 1405 MINIMU PAYMENT IS 42 CREDIT LIIMIT IS 2500.
KAYS JEWELER BALANCE IS 277 CREDIT LIMIT 7500 MINIMUM PAYMENT 50
HOME DEPOT BALANCE 710 MINIMUM PAYMENT 25 CREDIT LIMIT 1000 have a promotional period expirIing aug 300 dollars
BANANA REPUBLIC BALANCE 244 MINIMUM PAYMENT 10 CREDIT LIMIT 700
CREDIT ONE BALANCE 920 MINIMUM PAYMENT 60 CREDIT LIMIT 1025
most my CREDIT CARDs HAVE INTERST RATES ARE BETWEEN ARE BETWEEN 17-20 PERCENT.
I HAVE 200 DOLLARS EXTRA A MONTH TO PAY TOWARD CREDIT CARD. WHAT CREDIT CARD SHOULD I START WITH. ANY INPUT IS APPRECIATED

Use the debt-snowball method to pay down these balances.

http://en.wikipedia.org/wiki/Debt-snowball_method

1) Pay off Banana Republic first because it will bring down the utilization on that card to zero.

2) Apply the $10 minimum payment that you were making on the Banana Republic account + the extra $200 to Kay Jewelers until it is paid off. Continue to pay the minimum on the other cards.

3) Attack the Credit One account the same way, $10 + 200 + $50 (minimum balance from Kay Jewelers), until it is paid off.

Apply this method to the remaining accounts. Be sure to sock drawer all of these cards.

4) Home Depot

5) Macys

6) JCPenney

Re: In debt! What credit card should I pay First!

Anonymous — Tue, 04 May 2010 20:18:50 GMT

You have received two options to pay down and both will work. Some will suggest paying off your lowest balance, then next lowest, and so on. This will help YOU feel as though you have accomplished something when you see debt at zero. Others will suggest paying off your cards based on highest to lowest APR (that is what I did). In that method you make minimum pmts on all of your other cards and pay your minimum plus any extra you have (extra funds, money you may have paid over your minimum on other cards) towards the card with the highest APR. While it may take you longer to pay a card off, the financial reward is greater because you are saving extra money you would be paying toward interest. When you pay off the first, move on to the next card with the highest APR.

I created a basic document that includes my CC name total amt due due date minimum pmt APR percentage and how much i was charged in interest. Looking at how much you are charged in interest may provide a better visual for you.

The biggest thing is making the commitment to reduce your debt, and you have already made that choice. Good luck to you in your endeavors.

Edit to add: I watch a show called "Til Debt Do Us Part". The host , Gail Vaz- Oxlade, helps couples look at their finances, create budgets, and get out of debt. Her website has some worksheets that she uses on the show that may help you. The website is: http://www.gailvazoxlade.com/resources.html. Click on the tab for resources.

@elaine829 wrote:
I have gotten in credit card debt. My credit cards are:
JCPENNEY BALANCE 1183 MINIMUM PAYMENT IS 59 CREDIT LIMIIT IS 2000. wAS 1800 jUST GOT AUTOMATIC CREDIT INCREASE OF 200.
MACYS BALANCE 1405 MINIMU PAYMENT IS 42 CREDIT LIIMIT IS 2500.
KAYS JEWELER BALANCE IS 277 CREDIT LIMIT 7500 MINIMUM PAYMENT 50
HOME DEPOT BALANCE 710 MINIMUM PAYMENT 25 CREDIT LIMIT 1000 have a promotional period expirIing aug 300 dollars
BANANA REPUBLIC BALANCE 244 MINIMUM PAYMENT 10 CREDIT LIMIT 700
CREDIT ONE BALANCE 920 MINIMUM PAYMENT 60 CREDIT LIMIT 1025
most my CREDIT CARDs HAVE INTERST RATES ARE BETWEEN ARE BETWEEN 17-20 PERCENT.
I HAVE 200 DOLLARS EXTRA A MONTH TO PAY TOWARD CREDIT CARD. WHAT CREDIT CARD SHOULD I START WITH. ANY INPUT IS APPRECIATED

Re: In debt! What credit card should I pay First!

MarineVietVet — Tue, 04 May 2010 20:18:21 GMT

As you can see there are different opinions about this.

Do you want a psychological boost or do you want to save more money?

By paying off the smaller balances first you'll see results faster and this might give you more motivation to keep going. Also for FICO scoring this method will help you because you will have fewer accounts showing balances. FICO seems to like less than half of revolving accounts reporting a balance each month.

By first attacking those accounts with the higher APR's you will save interest charges.

I've used both methods independently and also a combination of the two. You'll have to decide what you think will work best for you.

From a BK years ago to:

9/09 EX pulled by lender 802
3/10 EQ- 800
4/10 TU -772

You can do the same thing with hard work

Credit Scoring 101
Common Abbreviations
Frequently Requested Threads
Credit Problems Which Is Worse?
Whats In Your FICO Score

Re: In debt! What credit card should I pay First!

llecs — Tue, 04 May 2010 23:26:36 GMT

IMO, do smallest to largest. Your FICO score would increase faster because more $0 balances would be reporting sooner and psychologically it'll feel better to knock one off sooner vs. waiting longer if the higher balances were associated with higher APRs.

Re: In debt! What credit card should I pay First!

elaine829 — Wed, 05 May 2010 00:38:18 GMT

Thanks everyone for your input!! MY credit scores at this time is 680 equifax aND 660 TRANSUNION.

Re: In debt! What credit card should I pay First!

tiger67 — Wed, 05 May 2010 03:11:08 GMT

I used the smallest to largest approach to pay off $35,000 in 15 months with no increase in income. Every time you take a card to zero you get a sense of satisfaction and you tend to boost your FICO scores.

I suggest you pay the Kay account first. This account has a minimum payment that is out of proportion to the balance. The extra 50 from that account can then be quickly applied to the other accounts. The key to success is to refrain from using the paid off cards until you get where you want to be. Good Luck.

Re: In debt! What credit card should I pay First!

Anonymous — Wed, 05 May 2010 10:07:14 GMT

Hi elaine829,

I paid down a ton of debt using the snowball method starting with the smallest balance. It worked great for me. There is nothing like the good feeling you get when a debt is paid. If I was paying your accounts I would pay the accounts in the following order, applying the extra $200 to each account until it is paid. When an account is closed, you take the minimum monthly payment and add it to the $200. Take the new extra amount and apply it to the next debt.

Kays Jeweler**

Banana Republic

Home Depot

Credit One

JCPenney

Macy’s

I picked Kays over Banana Republic due to the minimum payment. In about a month, you can have $250.00 extra which will really help you get this debt down.

Good Luck!