Assistance on How to Attack my Credit Debt

[SSgtUSMC]

Some guidance needed here!

Here's my debt:
Vehicle Loan(8%) $3226(I pay $525 monthly and will be PIF Sep '10)
Personal Loan(13.75%) $1699(I pay $225 monthly and will be PIF Sep '10)
Revolving:

Visa(12.9% APR with $9k CL) $5850(pay about $400 a month towards balance)
LOC(14.9% APR with $2k CL) $1000(pay $200 monthly)
Store Card(6% APR with $8K CL) $3795(pay about $200 monthly)
Chase(6% APR with $3k CL) $1300(pay about $200 monthly)

-I am trying to pay down all my debt and have made substantial gains since I am currently
deployed(tax free money) and haven't had misc expenditures(gas, food, etc) for about 3 months.

-I also exhausted my savings($1,000) to pay down my debt and currently have $100 in there(gasp)

-I am getting $1,000 in about a week and $2,400 from my taxes(I will put $400 in savings)

-I recently applied and was approved for a $155,000 Home loan and when reviwing a document
(Disclosure of Credit Score Info) it listed:

10 - Proportion of Balances to Credit Limits is too High on Bank Revolving or other Revolving accounts(all 3 reports)
05 - Too many Accounts with Balances

My question is what is the best avenue of approach to attack my remaining debt.  I am trying to pay off the
higher interest Visa Card and LOC but the Visa is my highest debt.  I definetely want to pay off the LOC and
be done with it but then should I pay off the Personal Loan or pay down my Visa or a mixture of both?  As always,
any and all assistance/guidance is greatly appreciated.

Fico Scores(as of 1/1/10):
TU: 722(although it says 682 on document I received from Mortgage LO)
Equifax: 697
Exp(from Mortgage LO): 684

Semper Fi

[SSgtUSMC]

I also invest in myself(pay yourself first) so when my savings acct is just $500 I have other ways that I invest my money:

TSP: $14K(put in 14% of base pay monthly) 

Roth IRA: 10K(invest the full 5k limit yearly/opened Apr 09)

Savings Bonds: 6k(I bonds but no longer purchase)

So this is the reason I dont sweat(well not too much) to just having $500 in my savings account for now.

[bakalao2k]

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@SSgtUSMC wrote:

-I am getting $1,000 in about a week and $2,400 from my taxes(I will put $400 in savings)

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You said you are expecting to get $3400 very soon.  I would use that money to play off your auto loan.  With the car paid off, you should look into ways of lowering your car insurance rates.

Use the debt-snowball method to pay off the rest of your balances. 

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

I would pay them off in this order:

1) LOC(14.9% APR with $2k CL) $1000  - It is your smallest revolving balance and it has the highest APR.  You will be able to pay this one off in less than two months if you plop down $525 (your old car payment) + $200 on this account. 

2)  Personal Loan(13.75%) $1699 - You will have this one paid off way before Sept 2010 if you use the debt-snowball method.

3)  Visa (12.9% APR with $9k CL) $5850

4)  Store Card(6% APR with $8K CL) $3795

5) Chase(6% APR with $3k CL) $1300

Message Edited by bakalao2k on 01-04-2010 12:26 AM

[Anonymous]

I have a hard time believing that he will save that much on car insurance after paying back his loan. He could maybe call them and ask. On the other hand, he's definitely going to lose several hundreds of dollars by paying back his auto loan instead of the LOC and Personal Loan.

To me SSgtUSMC the choice is pretty clear: I would use the $3,400 and pay back LOC (14.9 % APR) and the Personal Loan (13.75 % APR).

Then, I would make the minimum payments on the Store card and Chase (6 % APR) and maximize payments on the Visa Card (12.9 % APR).

That's the cheapest/fastest way to get rid of debt. Regarding credit scoring I would tend to believe that it's a safe play as well since the Visa card has a very high balance compared to CL.

Also, I would try to minimize saving cash (unless of course if there is risk of a job loss) and pay debt instead.

Message Edited by xav on 01-03-2010 10:51 PM

[SSgtUSMC]

I didn't even think about the insurance part but I must agree with "xav" in regards to paying off my debt.  After some pondering, I am definetely going to pay off the LOC and Personal Loan then try to attack my Visa Card since it carries the 12.9% and has highest utilization.  I just hope that this will help my FICO scores since I now somewhat obsess over them(thanks to this site). 

I am in the military(USMC) so I am not at risk of losing my job because business is good    so thats why I haven't worried about my savings too much and strictly determined on being debt free.

Thank you all for your inputs!!