topic Re: Need help with a plan to pay down high utilization in General Credit Topics

Need help with a plan to pay down high utilization

MyLoFICO — Sat, 25 Mar 2017 01:40:52 GMT

I spent too much across several cards and find myself in a bind that could very well lead me to bankruptcy. I have been trying to figure this out myself but I think I need help. Below are my cards, balances, limits, UTIL, and APR in an Excel spreadsheet I made that calculates various totals using formulas. I only had about an hour to make this so its still very basic. I am working on adding pay down amounts over time too but for now, this serves my purpose.

I need a plan of attack. Lowes is at 0% until 7-2018. Amazon has several 0% periods going on but they won't last another couple of months. I don't have enough money to pay them down to a manageable amount that I can afford each month without going under so my plan is to pay them down enough to make my scores go up by reducing my UTIL on each card (My overall will drop with the payments so I am not too worried about it since its not far from under 30) in hopes I will be able to get a balance transfer card to consolidate at least some of the higher interest ones.

I am open to other suggestions as well. My plan is to pay down the high UTIL cards to under %50 and then with the money I have left pay off the lower balances. I have about $10k I can put towards these right now but after that it will be slim pickings until the years end unless my side business picks up which is not likely since it relies heavily on the political landscape. So I need to make a big impact now so my future payments make a bigger impact than just paying interest. I no longer use theses cards except to pay my monthly bills for the cash back. They go on Chase and I pay it off. I don't eat out or party or anything else anymore. I work all the overtime I can and I already have a business that I am trying to increase my profits while moving more products.

Please help. I am not proud and I am not beyond admitting when I am wrong. I know it is bad and I know I might get some tough reposnes, I am ok with that. I want to own this and get it taken care of. I have filed Ch7 before and I do not want to go through that again.

Re: Need help with a plan to pay down high utilization

Anonymous — Sat, 25 Mar 2017 02:07:15 GMT

I've used this calculator it's great. You can pay down your cards to a certain amount and then pay them off. It will select the best strategy for paying off which card first based on APR. https://www.vertex42.com/Calculators/debt-reduction-calculator.html

Re: Need help with a plan to pay down high utilization

Anonymous — Sat, 25 Mar 2017 02:46:43 GMT

Hi there! Sorry to see you are in a bind. I'm sure some more experienced folks will chime in but have toy considered CLIs to help improve your utilization and maybe applying for a new card that you could BT to? Neither would reduce the amount you owe, if course, but might alleviate some stress and prevent you from getting slammed when your 0% periods run out in Amazon (you need to SD those cards you transfer balances from so the problem doesn't get any worse). Might help buy you some time and interest fees while you pay down your balances.

Re: Need help with a plan to pay down high utilization

K-in-Boston — Sat, 25 Mar 2017 03:08:38 GMT

It takes guts to admit. First thing would absolutely be to stop the bleeding if you are going to have retroactive interest coming up. Before doing anything, can you check to see if you prequals for:
Chase Slate
Citi Diamond Preferred
BOA BankAmericard

Re: Need help with a plan to pay down high utilization

Dalmus — Sat, 25 Mar 2017 03:21:12 GMT

First thing I would do is pay off all the cards with a balance below $2,000... According to your spreadsheet, that is 7 cards. Depending on the minimum payment terms, that's getting rid of at least $175 in monthly minimums, probably more.

From there, I would then throw as much as I can at Amazon so you can avoid back interest if those promo periods expire.

After that, I would concentrate on paying off the next lowest balance card, and then the next, etc. The idea being that as you eliminate more minimum payments, you're able to pay off the next card quicker.

If you're able to work out a plan, that's preferable to BK.

Re: Need help with a plan to pay down high utilization

jamesdwi — Sat, 25 Mar 2017 03:26:37 GMT

of all the cards, the one with the highest need to pay down is Amazon the promotions are cool, and can save money but you get in trouble fast because if you miss the zero percent interest window they hit you with all accrued interest you would of paid, so missing by $10 can cost you 100's... I read the stories, I often use them, love amazon but always move heaven and earth to get it paid off on time.

step 1 check all your existing VISA/MC/AMEX/DISC for balance transfer deals, most of them do them even if your not new. If none you can apply for a new card with a 0% offer, but if not may need to bite bullet and transfer to another high interest card just to remove the interest bomb AMAZON will deliver, check your promotional offers statement under activities, "Interest Deferred, But not Charged" is the amount to be charged if not PIF in time.

after that is defused you can take a look at many of the pay off methods to pay down your cards, you aren't the first to need to pay off massive amounts of credit debts lots of posts here.

Re: Need help with a plan to pay down high utilization

Anonymous — Sat, 25 Mar 2017 03:38:28 GMT

No judgement, we have all been through tough times.

Now ,y advice... google dave ramsey debt snowball plan. It is just what you need.

Re: Need help with a plan to pay down high utilization

peghede — Sat, 25 Mar 2017 03:41:39 GMT

A chapter 7 might be in most ends best option, depends on your income and so on, no credit or debt is worth loosing health over it.try what ever u can but it might get there.

Re: Need help with a plan to pay down high utilization

Kforce — Sat, 25 Mar 2017 04:09:06 GMT

Sorry to see you are in a bind.

You do not need new cards. or start the money shuffle games.
First -- STOP spending on the credit cards.
Pay all your bills, food, etc with debit, cash, checks.
Cut back you spending, you are spending more than you should if you cc's are going up.
Pay a little more than the minimum due this month, and do not
lower it next month.(Continue paying this months minimum or more).
You have approx $34,000 at an average of 16%-int, depending on cc's about 700-800 total min payments.
If you pay 800 each month you will be clear in about 5-6 years. If you lower each payment
to the new minimum payment the loan will not be paid for 25-years. Spend less, pay more and you
could see daylight in about 4-years. ($1000/mo)

Good Luck - It will be hard - no movies, and beans.

Re: Need help with a plan to pay down high utilization

Kforce — Sat, 25 Mar 2017 04:42:53 GMT

In my above response, I was using average CC-APR, your APR is about 23%, and if you did not add more debt about $33,000

Here are amortization chart top-bottoms for 700, 850, and 1000 dollars a month

Re: Need help with a plan to pay down high utilization

MyLoFICO — Sat, 25 Mar 2017 05:02:55 GMT

Great replies and I am going to address them oone at a time. I pulled Amazon and Lowes because they both have deferred interest, but I think those are the only 2. This is Amazon:

This is Lowes.

So, in light of that I think it is in my best interest to pay off these 2 and then put the rest towards the lower balanced cards and then the snowball method after that.

I have sock drawered all my cards. I also have about $1500 sitting in my Chase Checking.Savings as an emergency fund so I don't have to fall back on my cards in the even of an emergency. I have a few dollars each week going in to build that up too. Just in case.

Re: Need help with a plan to pay down high utilization

MyLoFICO — Sat, 25 Mar 2017 05:04:34 GMT

@K-in-Boston wrote:
It takes guts to admit. First thing would absolutely be to stop the bleeding if you are going to have retroactive interest coming up. Before doing anything, can you check to see if you prequals for:
Chase Slate
Citi Diamond Preferred
BOA BankAmericard

I check for prequals all the time. I never get them. I think once I douse this fire with a 10 grand shower I might start seeing some. I covered the retro interes in the post before this one. I had actually forgotten about that so I am glad you brought it up.

Re: Need help with a plan to pay down high utilization

MyLoFICO — Sat, 25 Mar 2017 05:05:22 GMT

@Dalmus wrote:
First thing I would do is pay off all the cards with a balance below $2,000... According to your spreadsheet, that is 7 cards. Depending on the minimum payment terms, that's getting rid of at least $175 in monthly minimums, probably more.

From there, I would then throw as much as I can at Amazon so you can avoid back interest if those promo periods expire.

After that, I would concentrate on paying off the next lowest balance card, and then the next, etc. The idea being that as you eliminate more minimum payments, you're able to pay off the next card quicker.

If you're able to work out a plan, that's preferable to BK.

Agreed. I can't help but think it will serve as a reminder in the future to not do this again.

Re: Need help with a plan to pay down high utilization

MyLoFICO — Sat, 25 Mar 2017 05:08:21 GMT

@jamesdwi wrote:
of all the cards, the one with the highest need to pay down is Amazon the promotions are cool, and can save money but you get in trouble fast because if you miss the zero percent interest window they hit you with all accrued interest you would of paid, so missing by $10 can cost you 100's... I read the stories, I often use them, love amazon but always move heaven and earth to get it paid off on time.

step 1 check all your existing VISA/MC/AMEX/DISC for balance transfer deals, most of them do them even if your not new. If none you can apply for a new card with a 0% offer, but if not may need to bite bullet and transfer to another high interest card just to remove the interest bomb AMAZON will deliver, check your promotional offers statement under activities, "Interest Deferred, But not Charged" is the amount to be charged if not PIF in time.

after that is defused you can take a look at many of the pay off methods to pay down your cards, you aren't the first to need to pay off massive amounts of credit debts lots of posts here.

Most of mine are Synch cards which don't offer BT. However, I have a merchant account so I can shift balances to lower my APR but that is going to be a last ditch effort and only if it will actually work. I would love a new BT card with a high limit but if my history is any indicator, I would get one and if i do it will be a low limit.

Re: Need help with a plan to pay down high utilization

MyLoFICO — Sat, 25 Mar 2017 05:10:12 GMT

@Anonymous wrote:
No judgement, we have all been through tough times.

Now ,y advice... google dave ramsey debt snowball plan. It is just what you need.

Dave Ramsey's plan is exactly what I have in mind once I fix the interest bomb that is coming.

Re: Need help with a plan to pay down high utilization

MyLoFICO — Sat, 25 Mar 2017 05:11:01 GMT

@peghede wrote:
A chapter 7 might be in most ends best option, depends on your income and so on, no credit or debt is worth loosing health over it.try what ever u can but it might get there.

I suppose the upside is I would finally get approved for an unsecured Discover. lol

Re: Need help with a plan to pay down high utilization

MyLoFICO — Sat, 25 Mar 2017 05:22:40 GMT

So this is my revised plan for the 10k I have to put on this right now. Thoughts?

Re: Need help with a plan to pay down high utilization

K-in-Boston — Sat, 25 Mar 2017 05:27:21 GMT

At least pay that Amazon portion that is going to hit you with nearly $400 in interest in a few days! Even if it has to come out of savings. That will hurt. Even transferring to a 25% card for a long time would be better.

Re: Need help with a plan to pay down high utilization

K-in-Boston — Sat, 25 Mar 2017 05:34:14 GMT

On phone so can't edit. Saw you posted your plan while I was typing. Wouldn't you rather pay the Marvel off instead of the Lowe's? That would save you about $700 over the course of a year, eliminate a bit of your monthly payment, and leave you will lots of time to pay off a balance on a promo APR.

Re: Need help with a plan to pay down high utilization

MyLoFICO — Sat, 25 Mar 2017 05:44:41 GMT

@K-in-Boston wrote:
On phone so can't edit. Saw you posted your plan while I was typing. Wouldn't you rather pay the Marvel off instead of the Lowe's? That would save you about $700 over the course of a year, eliminate a bit of your monthly payment, and leave you will lots of time to pay off a balance on a promo APR.

Thats a great idea. I forgot Lowes got me 24 months 0%. I could pay them off in January next year. See, great minds working together! Thanks for the idea! So this is revised.