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Is there a way out of this debt??

SG15
New Contributor

Re: Is there a way out of this debt??


@maiden_girl wrote:

It's been some time since I've posted in this forum. I have gone through significant life and financial changes. When I first came to this forum in 2011, I was so excited to start my credit journey, obtain new credit, and get credit limit increases. It was exciting and awesome....back then. Now that I am older and wiser and understand the consequences of credit a hell of a lot more, I am working to make better decisions. I came to this forum with zero debt. After job loss, cut backs, extended unemployment (this also includes making dumb decisions), I return with over 30k in debt. How did I let this happen? How did I get to this point?

 

I am currently working to get out of this mess I have made for myself. I am simply tired of not having money for simple things like groceries, gas for my car, or money for rent. It's like as soon as I pay someone, the balance goes right back up with crazy interest and a payment is due again. I have called several times every other month to have my APR reduced across the board. So far, only Discover reduced my APR from 19% to 16.49%. Most of the other companies raised my APR, lowered my CL, and INCREASED my minimum payments due *coughs* CitiBank *coughs*. I am living paycheck to paycheck at this point with a majority of my income going toward bills. I have cut all credit card usage completely and only use cash. I try to pay more than the minimum payment and currently working to pay off Chase Freedom by the end of the year because the interest is drowning me. I made about 29k last year but I expect to earn more this year as I just received a promotion at work. I used to look at people's debt situations and say MAN, that would never be me! I would NEVER let THAT happen. Well....I did...and here I am. Any advice would be greatly appreicated as to how to lower interest without closing accounts because my credit score would completely tank. Cap1 and Chase Freedom are my oldest accounts. Right now, Transunion FICO 8 is in the mid 699 and I think that's pushing it. UPDATE: no baddies, no lates, or collections. Accounts currently in good standing and payments on time.

 

Credit Cards Balances  Credit Limits PaymentsAPR
Capital One $            4,722.23 $             5,000.00$135.0021.40%
CitiBank $            5,861.43 $             6,930.00$157.6618.49%
Chase Slate $            5,127.23 $             5,300.00$111.0013.49%
Chase Freedom $            4,565.16 $             5,000.00$142.0023.49%
Discover IT $            5,771.28 $             6,000.00$119.0016.49%
Lending Club (loan) $            5,519.66 $          10,000.00$341.7313.99%
Total $         31,566.99 $          38,230.00$1,006.39 

Those rates aren't horrible its most the credit utilization that kills you in interest like you said. Although I know a lot of people that can show they can't afford their payment. A lot of people can get a rate reduction you just need to stress it to the credit department, not the everyday rep. I know they are very easy when you are past due... the only downfall is if you have no baddies I wouldn't recommend to go past due. But if you get the right person they can drop that rate due to hardship.

 photo yk5n8jsbadvz3swyrqtl_zpsprprw6wj.png photo 1115_L_zpsejkydx2b.jpg photo rewards_visa_card_zpsknnchknf.png  photo cash_back_college_visa_card_zpsa7qpkfem.png   



Message 11 of 87
longtimelurker
Mega Contributor

Re: Is there a way out of this debt??


@Gemini101 wrote:
The suggestions made so far have been great, I'll just add that an additional form of income couldn't hurt.
I'm a huge fan of learning to SALE something, ppl say they don't 'like' sales but ppl like to buy stuff, so service a need/want it's better than LIKING being stressed 😊

Another point was made about using one's 401k or TSP with you're a government employee
Please do NOT take this step lightly...Far too many ppl fall for the only borrowing from YOURSELF mantra because it's been pitched incorrectly far too often

Don't get me wrong, lots of things come on the table as a last resort..Gun to head but fleecing one's 401k/TSP is a much bigger deal than a simple loan to one's self

Too many folks wind up PLAYED come retirement time...When these funds nor their GROWTH are NOT there
Obviously growth and compounding that WOULD have happened are ROBBED from you when you do this NEVER to be regained, not to mention the tax deferment

Again, there are times we have to do what we have to but this option has been OVER used by way tooany,way too often for me not to mention a huge word of caution.

Again, much rather a person get a side gig than raid the 401k because it is much more than a simple loan to self

WHile there are certainly pitfalls, there are also times when it can make sense.   If you can pay it back fairly quickly (and with the lower interest rate this is easier than paying off the cards) the 401K damage can be minimized.   Also depends on your age: while doing it when you are young in some sense makes the problem worse (missing more years of compouding) you also have longer to recover by paying more in later etc.  

 

So not the first resort, but IMO not to be ruled out except as last option

Message 12 of 87
maiden_girl
Valued Contributor

Re: Is there a way out of this debt??


@SG15 wrote:

@maiden_girl wrote:

It's been some time since I've posted in this forum. I have gone through significant life and financial changes. When I first came to this forum in 2011, I was so excited to start my credit journey, obtain new credit, and get credit limit increases. It was exciting and awesome....back then. Now that I am older and wiser and understand the consequences of credit a hell of a lot more, I am working to make better decisions. I came to this forum with zero debt. After job loss, cut backs, extended unemployment (this also includes making dumb decisions), I return with over 30k in debt. How did I let this happen? How did I get to this point?

 

I am currently working to get out of this mess I have made for myself. I am simply tired of not having money for simple things like groceries, gas for my car, or money for rent. It's like as soon as I pay someone, the balance goes right back up with crazy interest and a payment is due again. I have called several times every other month to have my APR reduced across the board. So far, only Discover reduced my APR from 19% to 16.49%. Most of the other companies raised my APR, lowered my CL, and INCREASED my minimum payments due *coughs* CitiBank *coughs*. I am living paycheck to paycheck at this point with a majority of my income going toward bills. I have cut all credit card usage completely and only use cash. I try to pay more than the minimum payment and currently working to pay off Chase Freedom by the end of the year because the interest is drowning me. I made about 29k last year but I expect to earn more this year as I just received a promotion at work. I used to look at people's debt situations and say MAN, that would never be me! I would NEVER let THAT happen. Well....I did...and here I am. Any advice would be greatly appreicated as to how to lower interest without closing accounts because my credit score would completely tank. Cap1 and Chase Freedom are my oldest accounts. Right now, Transunion FICO 8 is in the mid 699 and I think that's pushing it. UPDATE: no baddies, no lates, or collections. Accounts currently in good standing and payments on time.

 

Credit Cards Balances  Credit Limits PaymentsAPR
Capital One $            4,722.23 $             5,000.00$135.0021.40%
CitiBank $            5,861.43 $             6,930.00$157.6618.49%
Chase Slate $            5,127.23 $             5,300.00$111.0013.49%
Chase Freedom $            4,565.16 $             5,000.00$142.0023.49%
Discover IT $            5,771.28 $             6,000.00$119.0016.49%
Lending Club (loan) $            5,519.66 $          10,000.00$341.7313.99%
Total $         31,566.99 $          38,230.00$1,006.39 

Those rates aren't horrible its most the credit utilization that kills you in interest like you said. Although I know a lot of people that can show they can't afford their payment. A lot of people can get a rate reduction you just need to stress it to the credit department, not the everyday rep. I know they are very easy when you are past due... the only downfall is if you have no baddies I wouldn't recommend to go past due. But if you get the right person they can drop that rate due to hardship.


I've called Chase in the past to have my APR lowered on my Freedom card and the only way they would do it would be if I closed my account. I don't want to close that account as it is my second oldest card and it's a Visa Sig card. I'll call again on Monday and do a full sweep and see if I have any luck lowering the ones in the 20%s at least.

As of 2017, rebuilding...
Message 13 of 87
K-in-Boston
Moderator

Re: Is there a way out of this debt??

Not saying it is the best option, but what has been working for me (and to be honest I would do almost anything to "only" have $31k left to pay)... balance transfers.  You may not get wonderful limits or the best long-term APR at the moment on new card(s), but if you are truly not continuing to use your cards and  can be disciplined enough to not go further into debt, it's probably your best bet.  For me, Citi and Discover ALWAYS have some sort of 0% or (better in our cases since we're probably not going to pay it down in 12 months, the term is much longer and has lower or no transfer fees) low APR balance transfer offers.  Chase and CapOne are hit-and-miss, with Chase usually having no offer and CapOne offering to transfer with no fee to my existing APR of 25.49% (my highest APR non-store card by about 9%).

 

With that said, even if you had offers you wouldn't be able to use them since you're close to maxed. Have you considered a Bank Americard with 21 mos @ 0%? PenFed? Citi Diamond Preferred? I am sure many others can be suggested with decent intro BT periods. If you can get the cards down to $0 that do/should have good BT offers, then you could start shifting those balances over, saving you a TON and getting the high APR balances paid down faster.  Even if you could just get the CapOne and Freedom balances shifted over to 0%, that would free up another $2000+ in the next 12 months that you could pay down the Citi card you're already paying over $1000 in interest on each year.  Once you get them shifted around to more managable interest rates, certainly choose one of the snowball methods mentioned before - throw everything over your absolute minimums to pay off the smallest balance first if you need visual feedback for your progress, or go after the highest APR card and use the funds there.  Best of luck, and take it from someone with a decade of experience in trying to stay afloat, and just finally beginning to bail out... it CAN be done!

Message 14 of 87
soloman
Established Contributor

Re: Is there a way out of this debt??


@K-in-Boston wrote:

Not saying it is the best option, but what has been working for me (and to be honest I would do almost anything to "only" have $31k left to pay)... balance transfers.  You may not get wonderful limits or the best long-term APR at the moment on new card(s), but if you are truly not continuing to use your cards and  can be disciplined enough to not go further into debt, it's probably your best bet.  For me, Citi and Discover ALWAYS have some sort of 0% or (better in our cases since we're probably not going to pay it down in 12 months, the term is much longer and has lower or no transfer fees) low APR balance transfer offers.  Chase and CapOne are hit-and-miss, with Chase usually having no offer and CapOne offering to transfer with no fee to my existing APR of 25.49% (my highest APR non-store card by about 9%).

 

@With that said, even if you had offers you wouldn't be able to use them since you're close to maxed. Have you considered a Bank Americard with 21 mos @ 0%? PenFed? Citi Diamond Preferred? I am sure many others can be suggested with decent intro BT periods. If you can get the cards down to $0 that do/should have good BT offers, then you could start shifting those balances over, saving you a TON and getting the high APR balances paid down faster.  Even if you could just get the CapOne and Freedom balances shifted over to 0%, that would free up another $2000+ in the next 12 months that you could pay down the Citi card you're already paying over $1000 in interest on each year.  Once you get them shifted around to more managable interest rates, certainly choose one of the snowball methods mentioned before - throw everything over your absolute minimums to pay off the smallest balance first if you need visual feedback for your progress, or go after the highest APR card and use the funds there.  Best of luck, and take it from someone with a decade of experience in trying to stay afloat, and just finally beginning to bail out... it CAN be done!


I have no experience with prime cards; therefore, I don't know the answer to this question: if OP is maxed out with high utilization, can OP get approved for a 0% card to transfer balances?

In the garden as of March 17, 2017.

Amex PRG NPSL | Amex Hilton Surpass $6K l Aviator Red $3.5K | Best Buy $6K | Amazon $6K | Chase $5K | BBVA $6K | UFCU $10K | NFCU $15K
Message 15 of 87
tydawg
Valued Contributor

Re: Is there a way out of this debt??

I personally do not believe that OP has a chance of getting approved for any new accounts at the moment with UTIL being so high. I believe the best of course of action would be the debt snowball as previously mentioned. 

Message 16 of 87
MrPTato
Senior Contributor

Re: Is there a way out of this debt??


@soloman wrote:

@K-in-Boston wrote:

Not saying it is the best option, but what has been working for me (and to be honest I would do almost anything to "only" have $31k left to pay)... balance transfers.  You may not get wonderful limits or the best long-term APR at the moment on new card(s), but if you are truly not continuing to use your cards and  can be disciplined enough to not go further into debt, it's probably your best bet.  For me, Citi and Discover ALWAYS have some sort of 0% or (better in our cases since we're probably not going to pay it down in 12 months, the term is much longer and has lower or no transfer fees) low APR balance transfer offers.  Chase and CapOne are hit-and-miss, with Chase usually having no offer and CapOne offering to transfer with no fee to my existing APR of 25.49% (my highest APR non-store card by about 9%).

 

@With that said, even if you had offers you wouldn't be able to use them since you're close to maxed. Have you considered a Bank Americard with 21 mos @ 0%? PenFed? Citi Diamond Preferred? I am sure many others can be suggested with decent intro BT periods. If you can get the cards down to $0 that do/should have good BT offers, then you could start shifting those balances over, saving you a TON and getting the high APR balances paid down faster.  Even if you could just get the CapOne and Freedom balances shifted over to 0%, that would free up another $2000+ in the next 12 months that you could pay down the Citi card you're already paying over $1000 in interest on each year.  Once you get them shifted around to more managable interest rates, certainly choose one of the snowball methods mentioned before - throw everything over your absolute minimums to pay off the smallest balance first if you need visual feedback for your progress, or go after the highest APR card and use the funds there.  Best of luck, and take it from someone with a decade of experience in trying to stay afloat, and just finally beginning to bail out... it CAN be done!


I have no experience with prime cards; therefore, I don't know the answer to this question: if OP is maxed out with high utilization, can OP get approved for a 0% card to transfer balances?


Sometimes CUs have debt consolidation loans where the interest rate is lower. It may or may not require you to close all your cards or maybe they will allow you to keep one or two open. With high utilization, it will be hard to get a BT card. It is easier to get credit when you don't want it than when you need it.

 

Good luck OP!

Message 17 of 87
K-in-Boston
Moderator

Re: Is there a way out of this debt??


@soloman wrote:

I have no experience with prime cards; therefore, I don't know the answer to this question: if OP is maxed out with high utilization, can OP get approved for a 0% card to transfer balances?


It's not impossible.  I was pretty much at 80-95% revolving util (at one point with $150k in revolving debt) from about 2005 - 2015.  I could get approved for cards but they weren't exactly 12.24% with $20k SLs*.  As a short-term solution (paired with the long term of simply reducing the amount of debt), if the OP can be approved it's a viable option to at least stop the bleeding from interest accruing.  A targeted direct mail from NASA FCU with a 7.9% for life BT offer actually landed me on this forum and began my journey.  Had I known about PenFed and Navy FCU years ago (and learned from others here how to properly walk like an Egyptian), I would have saved probably $100k in interest over the years.

 

@*Edit: Actually, the NASA card was $15k SL @ 13.15%, so there's that.

Message 18 of 87
heavyjay
Regular Contributor

Re: Is there a way out of this debt??

If you can find a way to pay an extra $300 a month you can be home free in 2 and half years.

 

avalanche.PNG


FICO 08:Jan 18, 2017: EX 800 EQ 725 TU 799
FICO 08:Feb 10, 2017: EX 788 EQ 772 TU 791 (post New Year's app spree)
In the garden as of 1/4/2017. Will remain for all of 2017.
Message 19 of 87
SG15
New Contributor

Re: Is there a way out of this debt??


@heavyjay wrote:

If you can find a way to pay an extra $300 a month you can be home free in 2 and half years.

 

avalanche.PNG


 WOW! He took the time to create a graph for the OP to get out of debt. Major Kudo!!

 photo yk5n8jsbadvz3swyrqtl_zpsprprw6wj.png photo 1115_L_zpsejkydx2b.jpg photo rewards_visa_card_zpsknnchknf.png  photo cash_back_college_visa_card_zpsa7qpkfem.png   



Message 20 of 87
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