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Paying Off CC Debt

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Anonymous
Not applicable

Paying Off CC Debt

So I did it! I ran myself into a hugh credit hole, my fault, I take full responsibility. Now with that out of the way, I am looking for a little (or a lot) of advise on the best and or fastest way to dig myself out.

 

I am going to list the CC debt I have, some cards listed are under my wife's name, a few under my son's name (he is a college student and I pay his bills as long as he stays on the deans list! Only one year left)

 

Amazon (M)                                          $2300/2500

AMEX (W)                                             $2783/3000

AMEX PLATINUM (W)                        $2000/5000  (PIF each month)

AMEX (M)                                             $800/1000

Barclay M/C (W)                                  $1680/1900

Berkshire Bank Visa (M)                    $340/600

Best Buy (M)                                         $4377/5000

Capitol One Venture (W)                    $7473/8000

Capitol One Venture (W)                    $6797/7500

Capitol One Quick Silver (M)             $1535/1800

Capitol One Quick Silver (M)             $3069/3300

Care Credit (W)                                    $1266/2000

Chase Freedom (S)                             $400/4500

Citi Double Cash (M)                           $0/500

Citi Double Cash (S)                            $0/2500

Discover (M)                                          $1835/2000

Discover (W)                                          $5907/6300

Discover (S)                                           $0/2000

Empower FCU M/C (Joint M&W)       $2790/3000

Home Depot (M)                                   $3068/3400

Kohl's (M)                                               $555/700

Lowes (W)                                              $6394/6400

Raymour & Flannigan (W)                  $3128/8000

Target (M)                                               $799/900

 

Total CC Debt :  $59,296/81,800

 

I also have a few loans:

 

2014 Malibu (S)                                      $6544/18894 ($364.00 month)

2015 Silverado (M)                                $34499/42408 ($600.00 month)

Personal Loan                                        $5300/11158 ($280.00 month)

Mortgage                                                 $62997/69600 ($863.00 incl taxes / month)

 

So, I am planning on using the snowball method unless someone has a better/faster way without debt renegotiation. I am not one to run from anything let alone my debt. Just wanted to see if there were any other options that might better suit my situation.

 

Monthly income averages $7k - 10k (self employed)

Message 1 of 27
26 REPLIES 26
medicgrrl
Valued Contributor

Re: Paying Off CC Debt

Before you start the snowball method, I would work towards getting the high utilization cards down below 89%, especially those that are about to go over the CL (Lowe's) Once you get those down, snowball away!


EQ 778 EXP 782 TU 729
Message 2 of 27
Anonymous
Not applicable

Re: Paying Off CC Debt

You have CC debt thats only $10k smaller than your mortgage balance and $160-170k in total debt with a $7-10k monthly income? Thats a big shovel and a medium pile so you could cash flow it easily assuming your lifestyle isnt eatting up your income. Try paying everyrting below 90% before snowballing to make sure an interest fee doesnt break the limit. Another option is an attempt to use any equity you have stored in your house to roll all of the debt into a lower interest rate and one payment, but if you have the ability to get agressive and throw $3-5k a month at the debt then cash flowing it may be simpler.
Message 3 of 27
Anonymous
Not applicable

Re: Paying Off CC Debt

Thank you for the response. Lowes is 0% for 18 months, sorry should have mentioned that. I just built a new house (No Mortgage on this one) and costs got a bit out of control. I can go ahead and get these all below 89% today.

 

One other question for you. If you were in my situation and had the choice, would you payoff the malibu (3.24%) and the personal loan (11%) and use the $644.00 monthly for card payments or dump the $12k directly to the credit cards (8% - 29%)?

 

Thanks again. 

Message 4 of 27
Anonymous
Not applicable

Re: Paying Off CC Debt

I'm not a fan of the snowball method.  I'm a fan of the "save myself as much money as possible" method.

 

Make a spreadsheet including APRs and minimum payments and figure out what saves you the most money in the long run.

 

Be aware that you want to pay down cards BELOW 89% -- including new interest posted.  So pay it to 88.9% PLUS also pay whatever new interest will post next statement so you keep it below 88.9% always.

 

Then attack high APR first and minimums on everything else.  If loans aren't highest APR, don't pay more than the minimum and crush out the highest APRs and keep them at $0 after.

 

More than anything else, you need to also go into poverty mode with new spending.  Put your cable TV subscription into vacation mode and toss any savings there to debt.  Dump any eating out (restaurants, drive thru, etc) until you are no longer paying interest on revolving debt.  Ramen + sardines diet.

Message 5 of 27
Anonymous
Not applicable

Re: Paying Off CC Debt


@Anonymous wrote:

So I did it! I ran myself into a hugh credit hole, my fault, I take full responsibility. Now with that out of the way, I am looking for a little (or a lot) of advise on the best and or fastest way to dig myself out.

 

I am going to list the CC debt I have, some cards listed are under my wife's name, a few under my son's name (he is a college student and I pay his bills as long as he stays on the deans list! Only one year left)

 

Amazon (M)                                          $2300/2500

AMEX (W)                                             $2783/3000

AMEX PLATINUM (W)                        $2000/5000  (PIF each month)

AMEX (M)                                             $800/1000

Barclay M/C (W)                                  $1680/1900

Berkshire Bank Visa (M)                    $340/600

Best Buy (M)                                         $4377/5000

Capitol One Venture (W)                    $7473/8000

Capitol One Venture (W)                    $6797/7500

Capitol One Quick Silver (M)             $1535/1800

Capitol One Quick Silver (M)             $3069/3300

Care Credit (W)                                    $1266/2000

Chase Freedom (S)                             $400/4500

Citi Double Cash (M)                           $0/500

Citi Double Cash (S)                            $0/2500

Discover (M)                                          $1835/2000

Discover (W)                                          $5907/6300

Discover (S)                                           $0/2000

Empower FCU M/C (Joint M&W)       $2790/3000

Home Depot (M)                                   $3068/3400

Kohl's (M)                                               $555/700

Lowes (W)                                              $6394/6400

Raymour & Flannigan (W)                  $3128/8000

Target (M)                                               $799/900

 

Total CC Debt :  $59,296/81,800

 

I also have a few loans:

 

2014 Malibu (S)                                      $6544/18894 ($364.00 month)

2015 Silverado (M)                                $34499/42408 ($600.00 month)

Personal Loan                                        $5300/11158 ($280.00 month)

Mortgage                                                 $62997/69600 ($863.00 incl taxes / month)

 

So, I am planning on using the snowball method unless someone has a better/faster way without debt renegotiation. I am not one to run from anything let alone my debt. Just wanted to see if there were any other options that might better suit my situation.

 

Monthly income averages $7k - 10k (self employed)


 

 

I'm with the others as far as paying at least 11-21% first across the board and getting them below 89% UTI, but also stop spending on them! then the next step take another 10% across the board paydown and keep doing that each month. Once you get to 49% UTI, then start snowball payments (high interest or low bal..your choice), but once you get the UTI down call your creditors and see if they will lower interest.

 

I have been doing this method the last 12 weeks or so and have had wonderful results..lower interest and serious CLIs

 

Good Luck ! Smiley Happy

Message 6 of 27
fliphusker
Contributor

Re: Paying Off CC Debt

I will agree with 

Message 7 of 27
Anonymous
Not applicable

Re: Paying Off CC Debt

I know that in the long run, the debt snowball would leave you paying more interest; however, you have way too many cards with balances and therefore too many minimum payments. I'd be scared that you'll forget to pay one or something. Personally, I would knock out those under $1000 balances (regardless of APR) as quickly as possible, then debt avalanche the rest. With your income, you should have those small balances gone in a month if you're eating beans and rice.

If you NEED those quick wins and motivation to keep going, snowball.
Message 8 of 27
Anonymous
Not applicable

Re: Paying Off CC Debt

Rein in the wife. Pat son on the back and I'd say tackle the debt with highest APR to lowest since you have a good income...Definitely paint yourself blue and pretend you are chase and AA wifes cards though imo..that's what I would do to mine in similar situation anyway Smiley Tongue. It will be a fun game of dress up

Message 9 of 27
medicgrrl
Valued Contributor

Re: Paying Off CC Debt

If you built the house and used the cc's to help with costs of build, have you considered taking out a HELOC to pay the cards off at a lower rate?


EQ 778 EXP 782 TU 729
Message 10 of 27
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