topic Re: What's the best step to take next in General Credit Topics

Next Steps...Snowball or UTL?

Anonymous — Thu, 30 May 2019 19:24:16 GMT

Hi All,

New to this form. Been reading and learning so much and have decided to reachout to my specific scenario to seek guidance of best path to get out of this hole. After having been fired in Jan 2019 for the first time in 25 years of working, the last few months wife and I have really focused on our debt. I found a job to just get income flowing in again and while not nearly what I was paying before, realized that changes needed to be made. We have eliminated all use of credit card, have a $1k emergency fund, and moved back in with in-laws until we can figure out next steps.

I found the Vertex spreadsheet few months ago and with what I've been learning here, I added the UTL data on to it.

Now I guess the question is what's next?

I've tired to include all the relevant data from reading other similar questions and replies. Much appreciated!

Actually trying to share a screenshot of the Vertex worksheet but don't have a picture icon to add it. I'm using Chrome on a desktop PC. Any thoughts?

Re: Next Steps...Snowball or UTL?

Anonymous — Thu, 30 May 2019 19:56:09 GMT

Sorry. Re=posted in more appropriate group.

Unless you know about the picture issue

Re: Next Steps...Snowball or UTL?

Anonymous — Thu, 30 May 2019 20:10:15 GMT

Picture icon will appear after you have worn off that shiny new account smell. More posts and time before it appears. You can always drop it on imgur.com and link here until then.

Re: Next Steps...Snowball or UTL?

Anonymous — Thu, 30 May 2019 20:14:38 GMT

Awesome. I was thinking that may have been the case but then saw a post completely off topic with a bunch of dog pictures....

What's the best step to take next

Anonymous — Thu, 30 May 2019 22:25:14 GMT

Hi All,

Really been reading into this community and learning a lot in the last few days. For various reasons, including a lower paying job, we've 100% locked down our CC use.

Now at a stage where it's full blown attack mode and after spending time on here learning about utilization, i'm wondering what is best.

Since I can't post a picture of the amazing Vertex worksheet (that I now added columns for UTL data!) quite yet since I'm a new member, I'm going to type it out.

Total Debit- $67.3k

Chase Southwest- $4.0 @ 18.24% $28k CL 14.3% UTL

Chase Slate - $ 3.2k @ 17.24% $8.2k CL 39.2% UTL

Chase Amazon- $6.3k @ 15.49% $12.3k CL 51.6% UTL

BofA Visa - $17.9k @ 0% till 10/19 $19.8 CL 90.7%UTL

BofA MC - $9.9k @ 0% till 9/19 $17.5CL 56.8% UTL

Capital One - $7.7k @ 0% till 9/19 $9k CL 86.6% UTL

AX Magnet- $6.7k @ 0% till 10/19 $10k CL 66.8% UTL

US Bank- $ 6.6k @ 0% till 6/20 $10k CL 66.1% UTL

Wells Fargo- $2.7k @ 0% till 1/20 $3.5k CL 67.9% UTL

Citi Preferred - $ 2.0k @ 0% till 4/20 $3.0k CL 67.8% UTL

Cards with zero balance

Discover - $9k CL

Amex ED- $11k CL

Barclay - $10k CL

With me now working 2 jobs and wife pulling income in, downsizing (one car), cutting expenses (including rent) we can throw about $2300 min a month at this total.

Really look forward to the input!

Re: What's the best step to take next

Remedios — Thu, 30 May 2019 22:39:35 GMT

Leave the cards with 0% apr alone for now.

That leaves you with

Chase Southwest- $4.0 @ 18.24% $28k CL 14.3% UTL
Chase Slate - $ 3.2k @ 17.24% $8.2k CL 39.2% UTL
Chase Amazon- $6.3k @ 15.49% $12.3k CL 51.6% UTL

You could try snowball method, by paying off lowest balance card. The only true advantage to that approach is psychological, for some people it works seeing balances go down to $0.00.

The other approach would be to tackle ones with highest APR first, saving yourself some money.

Third approach would be going for cards with highest utilization to improve scoring, but that wont work for you, as you'll still have maxed or near maxed cards.

My other concern would be the next batch of cards

BofA Visa - $17.9k @ 0% till 10/19 $19.8 CL 90.7%UTL
BofA MC - $9.9k @ 0% till 9/19 $17.5CL 56.8% UTL
Capital One - $7.7k @ 0% till 9/19 $9k CL 86.6% UTL
AX Magnet- $6.7k @ 0% till 10/19 $10k CL 66.8% UTL

While you're paying cards already incurring interest, those will be out of 0% apr.

You have a lot of CC debt. Even with $2300 per month, it's going to take a long time.

Re: What's the best step to take next

Anonymous — Thu, 30 May 2019 22:53:50 GMT

Thanks for the reply Remedios!

The biggest challange for me right now is definitely the next batch of cards coming up. The BT offers have really dried up since end of 2018 and realzing that may have to do with the UTL % on some.

That $2300 is after minimums paid.

Hope would be to move the upcoming 0 APR to zero balance cards, but not to go over UTL of 68.9%.

Re: What's the best step to take next

tcbofade — Sun, 02 Jun 2019 19:49:13 GMT

It looks like you only have two accounts OVER 68.9% utilization right now...

Get those two paid down, and your scores will improve, perhaps putting another zero percent offer on the horizon....

Re: What's the best step to take next

Anonymous — Fri, 07 Jun 2019 20:39:00 GMT

Yay! I can add photos now. Here's a breakdown of what I'm working with.

I tried some CLI on Amex and BofA cards to help UTL % but was denied.

Re: What's the best step to take next

Anonymous — Sun, 09 Jun 2019 05:10:46 GMT

You really need to adjust your targets. 60% or whatever the calculation is won't work well for scoring. At most you want to be under 49% and ideally under 9% for the most bang for your buck on scores. The BT offers come in when you're not looking like you have 90% use on a single card.

Looking at things you want to work your way down from the highest APR to save $$$$ on interest.

Maybe add a column of when each 0% period expires as well to sort by that so you know when you're about to get hit with the reguiar APR.

It might be a good idea to pursue a personal loan as well to get things under control and simplify the payments into a single payment and then just use 1 card for daily expenses and PIF every month. Treat that card as a debit card when it comes to spending. If you don't have the $ for something to be paid immediately then don't use the card.

Re: Next Steps...Snowball or UTL?

Anonymous — Sun, 09 Jun 2019 08:36:48 GMT

@Anonymous there are many comments on credit scoring. At this point you need to pay off debt (forget about scores). You and your spouse are busting hump to reduce debt ... that is the focus! More credit is not the answer. Looking at the interest rates, you are getting hooked hard on some debt. In my world the interest killed me and I had to take the big BK which ended up haunting me for about eight years. Today lenders are a little more flexible but, the economic indicators for debt seem to point to a tighter credit market. Time to pay debt and find a garden.

Re: Next Steps...Snowball or UTL?

Kforce — Sun, 09 Jun 2019 21:51:45 GMT

If I have the numbers correct:

Debt = $66,000

Monthly Payments (900+2300) = $3,200/mo

With 18% interest this is paid in full in 2 years.

Just keep paying.

To keep all issuers happy, I would pay 1.5x min on 0 cards

2x on low interest cards and 3x or 4x on high interest cards.

Don't worry about scores and getting more 0 cards.

The goal is paying them all off and keeping issuers from balance chasing.

Re: What's the best step to take next

tacpoly — Mon, 10 Jun 2019 04:27:26 GMT

Can you list what the interest will be when the 0% period ends? Having them at 0 doesn’t really reflect your situation because it doesn’t look like you’re not going to be able to pay them off and the interest will kick-in on the entire balance. If it’s provided in your statement, you should also provide accrued interest so far.

Top of my head calculation assuming 20%, 1 year, and not much paid down, you could see an additional $8,000 in accrued interest added to your debt before the end of the year...

That additional debt would max out a couple of your cards. I’m afraid that may start a cascade of interest rate increases on your other cards. I’m no expert on this so you should get others’ input, but would you consider preemptively closing the Chase cards to lock in the interest rate while you pay them off? You have plenty of other cards.

Could you borrow money from family to pay off at least some of those 0% cards before they convert?

If family isn’t able to help monetarily, then when you plan your snowball, you should consider the actual interest rates and not the temporary 0%.