Probability of a Balance Chase?

[longtimelurker]

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@pi-r-squared wrote:
. I really have $1450 available to use as I get charged $250 interest per month for the balance I’m carrying there. So once I pay off 3 cards (it’ll take close to 48 months), then I can pay on Discover. But at least I have a plan!

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$250 a month on Discover?   What is the balance and APR?

[pi-r-squared]

My Discover has a CL of $19K. I can only pay down to $17.3K, run it up close to max, then pay it down to $17.3K. Maybe over time , I can increase payments by $50 or $100 every month but I’m throwing any extra monies toward Barclay.

APR is 16.24%.

[Revelate]

Look at it this way: even just on the Discover alone you are losing 3000 dollars a year.

That amount is relevant even to me, nearly two mortgage payments on my LA condo, and it would be nearly 3 if I weren’t on a 15 year mortgage.

You don’t need to worry about being balance chased, that is honestly irrelevant: take a hard look at your finances (budget) and just start paying everything off.

Credit limit or even open cards doesn’t matter, stopping the financial bleeding does.

If it were me I would make minimum payments everywhere, sort all my revolving debt by highest APR, and attack that one first by throwing all available free cashflow at it, then the next highest, and so on and so forth.

[pi-r-squared]

Yep! That’s what I’m doing. Discover is the only CC I’m using. Paying back what I charge every month. All my other cards I’ve ranked by balance and APR. Barclay is the highest APR with lowest balance. It should be paid off in 4 months. After that, I’ll be rolling payments to the other cards. I have a long way to undue the damage.

[Anonymous]

It sounds like you've got a lot more going on than worrying about being balance chased by one lender. There's not much you can do to prevent it, really. If they've done it before then odds are they'll do it again based on your overal UTI. TBH, I'd pay down more on Discover first. Or whatever you highest balance is. The interest on that alone would likely pay down smaller cards rather quickly. 

I know it feels great to finally pay off a CC, but in the long term those higher balances are going to make it a wash.

[pi-r-squared]

I realize I have a LONG WAY to go in paying down these cards... but I’m thankful that I have enough income to correct my mistakes.... I have so much debt that it got me frustrated and angry at myself but I figured out a plan, built a spreadsheet, and figured out I can pay off Barclay in 2-4 months, then my next one in 16 months (while paying min on the 3rd), then another 22 months to get the largest balance finished. If everything goes right 40+ months from now, then I can tackle Discover. Took me about 3 years to get in this mess and probably 6+ to get out,

[SBR249]

I feel like if it's going to be a 6+ year endeavor, you may need to modify you plan a bit. Instead of taking 16 months for the second card and 22 for the next, consider alternating them by paying one down to something like 60-70% and then the next down to 60-70%, and then back to the first one down to 40-50% and then the same for the second. That way you can concurrently lower your utils (assuming you aren't being balance chased on any of them) without leaving some cards with high utils for a long time while you focus on just one. At some point, I'd say maybe around 30-40%, you can see if you can get a debt consolidation loan to get everything under one payment and interest rate. 

The way you are currently planning, you'll have basically at least one card with high util level until almost the very end which can really hurt your chances of getting a consolidation loan as well as increase the chances you'll be hit with adverse action long before then. 

Long story short, snowball is fine, but the prospect of leaving multiple cards close to maxed out for years on minimum payments is risky and concerning. Might be better to keep things overall on par with each other in a phase-wise fashion. 

[Revelate]

@Anonymous actually highest APR always generates the most interest for the amount of that debt.

Basically 10 bucks at 100% generates an additional 10 bucks of interest a year.

The same ten dollars as part of a total of 100000 dollars in debt now at 10% only generates 1 dollar in interest a year.

If the goal is to pay off debt the fastest always put cash to the highest APR as dollar per dollar that is the biggest interest generating debt.

The fact more interest is accruing on the larger debt is irrelevant, it’s still cheaper money.

[KJinNC]

JMO (and my highest limit on a credit card is $500, so I'm coming at this from a pretty different perspective), getting out of credit card debt is a lot more important than whether or not you get balance-chased or even had a card closed on you. I would put all I can spare on it one card at a time, highest APR first, until they are all zero or close to zero. You can worry about limits later.

[pi-r-squared]

It sounds like any which way I tackle it, this debt will take quite some time! But I’m focused on this task and trying to undo this damage. It’s just very tempting to just pay down this Barclay CC because it has the lowest balance AND the highest APR. As Dave Ramsay would say, paying it completely off will make me feel I’ve accomplished something. Now, with my other 2 cards that I’m not using, the next one I want to work on will again have the lower balance and higher APR. I guess I could fire my guns at this one until 70% util, then aim at the other one until 70%, then 60/60, 50/50, etc..... I’m gonna rework my spreadsheet to see what it’ll look like.