What should I do?

[Anonymous]

Hi everyone!

I am new here and I need some help from somebody who knows a lot more than me. I am 21, I have 9,800 in credit card debt and yes I am one of those people who fell into the trap of bad credit habits. I have 3 balances and in the past month and half I have elminated two balances on my credit union cards that was a total of 1,100 dollars (which I am proud of). I live alone and away from home and I am supporting myself completely on my own, this is how I got this far into debt, when I didnt have the money I used a credit card. 

Here are some details. My score right now is 622, utilization is 50% 

I am paying down my debt at a rate of 1,000 dollars a month with the help of a budget I made and working full time. These are my remaining balances:

1. 5700 (highest interest rate)

2. 1600 (current on all payments and have not been charged interest)

3. 2400 (store card, used to buy furniture

I always make payments on time, I am just having trouble gaining ground on some of these. No cards have gone to collections. 

My questions are, should I look into a balance transfer card? is my credit score a no go for these? Id like to consolidate so I can start paying everything off one balance and get rid of the high interest I am paying. Or should I do something else? I plan on having this debt paid off in 10-12 months. After which I will keep these accounts open and start using them more responsibly. I have recently been offered a higher paying job that starts September 2017 and I would like to have this all paid off by then. 

Thank you all in advance for your help it has taken me a lot to ask for help as I am incredibly embarassed that I let my bad habits get the best of me. I have been making progress though and I just need a little more guidance to finish this debt off. 

[Anonymous]

I think your best bet is to pay the min on the store card and the 0% card. Then put the remainder of the $1000/mo. on the high interest rate card. Pay that one off first. Then snowball that amount into the furniture card. Meaning pay the min on the 0% card and the remaining $1000/mo. on the furniture card. Then when the furniture card is payed off, put the full $1000 on the 0% card. This will save you the most money by paying the least amount of interest. 

Good to hear that you're getting a handle on your debt so early on. It sometimes takes a while for people to learn responsible credit use. Good luck on getting that all payed down!

[IgnatiusReilly]

First off, you are taking responsibility and dealing with this head on. You should be proud of that.

Now then, RMB3 makes a good point and you will get a lot of great advice from the board. Here's mine, greatness not included: Prepare to live like Gandhi until you are out of debt. No non-essential spending. Yeah, it will suck but you will also remember for years the experience and hopefully keep you from getting in this position again.

Good luck. You will get through this!!

[thummel]

What's the interest on that store card? If it's close to the one with highest interest I myself would eliminate that one first depending on the interest rate.

[Anonymous]

26.24%, but it is interest free until December 2016. I have been making payments on time and have not been charged interest to date. 

[IgnatiusReilly]

Sgriess, are you absolutely certain you can pay it off completely before the zero interest rate period ends? If not, there is a distinct possibility of having to pay retroactive interest.

[Anonymous]

I would attempt to get an installment loan from your credit union and combine all balances owed as long as you dont rack up more debt this seems like a good plan. It worked for me AND improved my credit score.

[Anonymous]

You need to make sure that the zero percent 'furniture' card does not have a retroactive interest clause. If it does, you need to throw everything at that card so it is paid off before the interest free periond ends. 

ETA - Normally lurk here, but felt it was important enough to make the above comment to create an account and post. By the time I got that sorted, seems like someone already said it

[Anonymous]

Good advice here. May I add that be vigilant with your outflow of cash. Only buy "needs," not "wants" and you are on your way!

[IgnatiusReilly]

What Musiclover said.

I got my first CC around your age. If you had a pulse and were in college, you could get an Amex Green Card. (This was back in the 80's, a time of easy credit and regrettable hairstyles.)

I found out fast owing money I didn't have was as painful as the hangover induced headaches I got running up the debt. So I stopped doing it.

(Spending money I didn't have. I kept up the drinking.)