Advice please! Over $30k in credit card debt

[Scamp]

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jaybird201 wrote:

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@Creditaddict wrote:

well if you want to be real technical with saving every penny and what to pay on each card each month the use www.whatsthecost.com.

But people like Dave Ramsey say pay little to biggest and don't worry about interest rate because it does people more good to see progress when they feel so deep.

and when you pay off 3 cards right off the bat and apply those payments towards your next biggest the higher interest on one card will probably be offset by having less accounts charging interest because you paid some off vs. working on highest interest which might be highest balance also.

so I wouldn't call any of it bad advice it's just what you like to see first, progress or every penny 

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While I see the merit in the argument that it makes people feel good to see progress when they're in so deep, I don't think it's worth $2,000 per year to have that good feeling... 

And when I calculated the $2,000 you'd save, that's if you paid to each card proportionally. If you pay the Discover card, the one with the lowest balance, first, you're actually costing yourself MUCH more. I don't understand why someone would VOLUNTEER to be in credit card debt for a longer period of time...because that's what you're doing if you pay down your Discover card first...

Message Edited by jaybird201 on 06-23-2009 02:08 PM

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Different methods work for different people, jaybird - there's no one-size-fits-all solution, in this as in so many other things in life. 

[Anonymous]

Hang in there OP! Stay focused, and you will dig yourself out of the hole. I pass no judgment, as I've been there, done that, and bought the T-shirt after a major medical illness.(50K in debt) I worked 2 40 hour per week jobs for about a year, until I got things under control. Paid my last CC off in Dec 2007, and it feels good to always PIF, and be debt free.

Whereas that is not the answer for everyone, I reccommend clearing off the small cards first, so you have fewer cards with balances reporting.

Also: If you have an excellent credit history, and no lates/derogatories, you are in a good position for the companies to lower your rate. Just be persistent. Don't sound desperate. Tell them you have a plan to pay the cards off, and that you're hoping they could assist you with a lower interest rate. It worked for me, but this was back in 2004. Things are a bit more restrictive now.

[marty56]

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@Anonymous wrote:

Some of the cc companis put a notation in the report that it is being managed by credit counselors some of them didn't, its not supposed to count towards your FICO but it seems to have.

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The TL saying account is managed by a CCCS as no effect on your FICO score.  Since DMP I was able to get a prime auto loan, VISA card, and a mortgage refi at 4%.  I wouldn't apply to any of the CCCs that I had in DMP altough some have sent pre-approval offers to me after DMP which I ignored.  I kept the AE frig magnets though.  All 5 of them. 

[Anonymous]

Ok, so another question.  My husband is an AU on my BofA and Chase-WaMu cards, which are almost maxed out.  He has 2 other cards of his own and hold less than a 30% balance on those.  If I remove himas an AU on those two cards, would his credit score get better?

Thanks again!

[pinosh]

I recommend CCCS I did not want to do it and when I entered the program I had been making all my payment s ontime.  I thought I was going to take a major hit  on my score but not true. Since I did it while I was still UTD it helped me. Yes you have to close them but that removed tempation and gets the balance down faster. Also they lower all your rates to 9.90 with some exceptions and you payments go more to priciple than interst as they are now.  I KNOW it is very hard to give up CC but right after I paid them all off I got an offer from AMEX and with the bonus points they gave me I am going to florida. 

Good Luck

[Anonymous]

Most of pieces of advice are truly terrible in this thread. You have correct strategy to pay off the highest rate CC first. Keep doing that, you should worry about how much you will save first and about FICO score later. Since Juniper has the highest rate, you will be able to pay it off right away too (extra bonus). 

[Anonymous]

I went to the snowball calculator and entered all my information and if I pay what I plan to pay with paying the highest interest cc first, I'll be debt free in 21 months, yay!  Less than two years to get out of this mess.  I've put all of my cards away and am only paying cash from now on.  Thanks everyone.

[Scamp]

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SaraLucy wrote:

Ok, so another question.  My husband is an AU on my BofA and Chase-WaMu cards, which are almost maxed out.  He has 2 other cards of his own and hold less than a 30% balance on those.  If I remove himas an AU on those two cards, would his credit score get better?

Thanks again!

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If he doesn't have baddies of his own and his reports are otherwise in good shape, his scores certainly should get better once your maxed-out cards aren't dragging them down - high utilization is a score-killer. 

So far as I know, you can just call BofA and Chase/WaMu and ask to have him removed.  Nose around on here and on the General Credit Issues board to find other posts on removing AU's and what steps to take if there are any problems with those accounts coming off his reports within about 30 days of their normal reporting dates (should be their statement dates), once he's no longer an AU.

[Anonymous]

Update, good news and bad news.

Good news first, I've managed to pay down my Chase card from $7,000 to $4,100 since my first post.  Selling lots of stuff on eBay, yay!

Bad news, I went online today to check my Bank of America account, and my CL went from $4800 to $4200

[GregB]

The one big factor in getting the credit card debt down is interest rate. That is why it is so important to pay off the higher interest rate first.

HOWEVER, paying some cards off does help your FICO. This may help keep you from getting CLD like you just had on BofA. You have two cards with fairly small balances and high interest rates. Why not get rid of those for the score boost?

Anything over 80% util on one card is maxed out so it doesn't make any difference if it is 80% or 95%.

Once you get the high interest low balance cards paid to $0, you could always use one of those for you purchases and PIF before the statement cuts to keep your score boost.

I make a chart and work on paying the higher interest first but work to keep zero balances reporting on as many cards as possible WHILE wasting as little money as possible on interest.