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My Next Step?

New Contributor

My Next Step?

Hi All,


I don't post much here for help...but its finally time.  I need advice.  I'm working two full time at a factory, and one part time at a retail store.  I'm doing this to pay down my ridiculous college student should have almost 8K in FOOLISH CC debt two years in...  Anyways, enough of that.  I have 7 reported accounts.  One installment thats been PIF...and 6 revolving accounts.  Two of the revolving accounts have been paid off.  (Target and CU "Kwik Cash.)  I am left with:


Discover - $4305  -  Line: $4400   19.99%


Citi  - $1795  -  Line: $2000  0% for next two months, then ?


Chase - $764  -  Line: 900    18.24%


CU Card - $564 - Line: 700   8.00%


The killer here has been the discover....$60+ in interest a month...


I contacted my CU...they do balance transfers, but its a 3% fee (50 max).  My limit though is only 700, I'd have to probably have them pull a hard and see if they will raise my limit.


My goals in all of this are:

-to be debt free by my 21st birthday (nov. 15th)...ambitious, but ive been so frugile...

-purchase a more reliable car

-be "set" to go back to school to focus on my studies, no working to pay this off.


If you have any questions for me, or need additional info, let me know...i'll be here!  Thanks!

Message Edited by kyobakes on 07-09-2009 09:54 PM
Message Edited by kyobakes on 07-09-2009 09:54 PM
Message 1 of 4
Frequent Contributor

Re: My Next Step?

Hi kyobakes,


The problem as I see it is that you're "maxed" on every card.  Not much room for transferring balances, etc.  Unfortunately, I think you'll have a difficult time getting any new cc to transfer balances.


My advice, as many people on this forum concur, is pay the higher interest cards (Discover and Chase) first.


As you pay the balances down, you may be eligible for CLI if accounts are current.  Your UTIL will drop, thereby raising your FICO score.


Hopefully, some forum members will join in with some additional advice.


Good luck

Message Edited by illtakecreditforthat on 07-09-2009 10:02 PM
I want PATIENCE...and I want it NOW
Message 2 of 4
New Contributor

Re: My Next Step?

illtakecreditforthat wrote:


As you pay the balances down, you may be eligible for CLI if accounts are current.  Your UTIL will drop, thereby raising your FICO score.


Yeah, I have no baddies to speak lates.  Im proud of myself for that.  My score is being dragged down primarily by the utilization and limited credit history (2 yrs, 4 months)


I know going with focusing on the discover is a good choice...i just wanted to know if anyone had some "outside-the-box" ideas.  

Message 3 of 4
Moderator Emerita

Re: My Next Step?

One outside-the-box tactic, although it's a pretty popular tactic, is to pay off the cheapest card first, while continuing to make payments on the others, then take that amount and apply it to the next-cheapest, and so forth. This is the "snowball" tactic. Costs you more by delaying payoff on the high-APR cards, but it does help a lot of people feel like they're getting somewhere, which is important, too.

Other outside-the-box tactic: Go to your credit union and get an installment loan that would cover your CC debt, and use it to pay off the cards. Then pay everything off through it. If the installment APR is lower than the CC APR, you're gaining. This also helps your FICO scores too, not that this should be your focus now.

The giant flaming danger with this second tactic, of course, is that people will start running up their newly-paid off CC's again, winding up in a worse spot than ever. So you have to be incredibly honest with yourself, get the cards out of your wallet, keep working that second job, and live skinny for a good while. No one here knows you well enough to be able to tell you if you can handle this or not; that's up to you and some serious self-examination.

Congrats on the second job! It's still the best way I know to get out of debt. You have extra money, but you don't have the time or energy to blow it. Good luck!
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 4 of 4