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Thanks to SO much help from the folks here, I got my score from 543 up to 698 in about a year. I had gotten several CLI's and had low balances to go with them. Then came our first real family vacation and thinking "well we might never get to do this again...", Christmas, a $3,000.00 emergency home repair, etc., etc.
Now I'm really sweating it and am constantly worried about it. I have 8 CC accounts, 1 with no balance in ages, another just paid off, and am working my way down from about 90% UTI. My EQ has dropped to 651 and is staying there so far, but I am worried about CLD's (none yet though). I pay the largest amounts I can toward CC debt and am now down to about 55% (?) UTI since December.
I have learned a very valuable lesson here. Those cards aren't "extra money" in my wallet, which, I guess is how I thought of them until seeing all the damage, they are a privilege that I had lost control of, and am now paying dearly for. I can totally understand how people over time build up the debt, and I can safely say this will never happen again - I enjoy a good night's sleep way too much! A consolidation loan has crossed my mind, but I feel like I have done this, and now this is the price to pay. I guess the longer I sweat it, the less likely I am to ever do it again.
Anyway, here's my question (sorry for the long, long approach! My balances are:
Chase - $800 / $1,500 (18%)
Penneys $1,474 / $1,500 (0% until 2/10)
Citi - $1,300 / $1,500 (0% until 11/09)
Cap One - $498 / $1,000 (19%)
Best Buy - $580 / $750 (0% assuming pif by 6/09)
Target - $800 / $1,000 (22%)
Ikea - $0 / $500
FB $0 / $300
I can pay about $600.00+ per month, so what would be the best approach to avoid CLD's and even worse, having a card closed by the CCC? Is the high UTI per card my biggest problem, or should I try to pay down to 50% overall, then 30% and so on?
SL,
Keep up doing great job! Here is my 2 cents, don't pay extra money to CC, meaning pay off cards with higher APRs first. However, if you have two cards with similar APRs but vastly different utilization, decrease utilization first. Finally, work on that Chase card, they are somewhat more jittery than the rest.
Anyway, here's my question (sorry for the long, long approach! My balances are:
Chase - $800 / $1,500 (18%)
Penneys $1,474 / $1,500 (0% until 2/10)
Citi - $1,300 / $1,500 (0% until 11/09)
Cap One - $498 / $1,000 (19%)
Best Buy - $580 / $750 (0% assuming pif by 6/09)
Target - $800 / $1,000 (22%)
Ikea - $0 / $500
FB $0 / $300
I can pay about $600.00+ per month, so what would be the best approach to avoid CLD's and even worse, having a card closed by the CCC? Is the high UTI per card my biggest problem, or should I try to pay down to 50% overall, then 30% and so on?
Pay down Chase, Cap One and Target to 49% as per above (as the difference in the interest rate is minimal). Min pay on the 0%ers until teaser expires, even if you have the cash (bank the cash and earn interest if possible). Then bang out the high APR's in order of higher interest rate. Forget your FICO for 6-7 months, it will come back. Check best buy's and pennies terms to make sure they don't charge you interest from day 1 if you don't PIF. If they do you have to get those PIF by the end of the teaser as the effective interest rate for missing that one day is staggering.
So
- month 1 - $65 to chase, $10 to cao one, rest to Target
- month 2 - pay off Target
- month 3 - pay off cap 1 (or maybe best buy if they will accrue interest from day 1)
- month 4 - pay off chase
- month 5 - pay best buy if lefts
- then save at E-trade/ING etc until citi comes due and pay it
- then save and hit the pennies
Do not miss a min ever as those 0%ers are huge.
Again - your FICO will come back either way. Mine way is slower probably at first but faster overall as you will have more $ to pay everything off faster. The key is to save total interest expense. Cap One and Chase may CLD you, but I don' think the stores will, and if they do, they do.