HELP! - Buried in CC Debt & Don't Know Which Way to Turn

[Anonymous]

Hey everyone, 

I started rebuilding my credit back in 2016 and opened a secured Discover It Card, got hip to the shopping cart trick, went BONKERS and got a bunch of store cards (smh), and now I have a Spark Business, Quicksilver, AMEX everyday cash, NFCU CC & CLOC, and about 7 store cards. I fell completely off the wagon, and now am up to my neck in debt. I'm maintaining paying slightly above the minimums on all of my cards, but with my credit I had last year, I went and financed a car (2014 428i BMW). I'm making 56k a year and I just got a new job that I love and has great benefits (& pension) with a growing salary with a cap at 90k.

I'm just at a point where I want to close all of my cards and start over but I've been hearing that consolidation companies aren't really the best option.

I guess my question is, should I just stay in the garden (been in the garden for about a year) and tough it out or try and consolidate and ruin my score even more. 

I'm at 603 TU 553 EQ and 566 EX currently. 

When I got my car (April 2017) I was 688 TU and high 600s in the others and I have a 6% APR.

Any suggestions are welcome. THANK YOU!

[SouthJamaica]

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@Anonymous wrote:

Hey everyone, 

I started rebuilding my credit back in 2016 and opened a secured Discover It Card, got hip to the shopping cart trick, went BONKERS and got a bunch of store cards (smh), and now I have a Spark Business, Quicksilver, AMEX everyday cash, NFCU CC & CLOC, and about 7 store cards. I fell completely off the wagon, and now am up to my neck in debt. I'm maintaining paying slightly above the minimums on all of my cards, but with my credit I had last year, I went and financed a car (2014 428i BMW). I'm making 56k a year and I just got a new job that I love and has great benefits (& pension) with a growing salary with a cap at 90k.

I'm just at a point where I want to close all of my cards and start over but I've been hearing that consolidation companies aren't really the best option.

I guess my question is, should I just stay in the garden (been in the garden for about a year) and tough it out or try and consolidate and ruin my score even more. 

I'm at 603 TU 553 EQ and 566 EX currently. 

When I got my car (April 2017) I was 688 TU and high 600s in the others and I have a 6% APR.

Any suggestions are welcome. THANK YOU!

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You really don't have a choice, you have to stay in the garden because you won't be able to get any kind of loan that would improve your position.

I would suggest the snowball method: (a) put your cards away & stop making purchases with credit cards, (b) pay off the lowest balance first, then move on to the next lowest, and so on; (c) pay $5 above the minimum on the other cards.

Perhaps you could sell the BMW? That seems like a bit of a luxury.

[Anonymous]

How much credit card debt do you have?

[Anonymous]

Your biggest mistake was the car. The insurance alone will bury you. BMWs lose so much value I can almost guarantee that you are upside down on the loan unless you put some unusually high amount of cash down. $56 a year is not enough to drive a BMW. Even $90K a year is barely enough. Anyway. Stop getting credit cards and put as much as you can't towards the cards. Starting with the highest interest. I'm assuming the store cards have somewhere around 30% interest. Pay them down first.

[Kree]

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@Anonymous wrote:
Your biggest mistake was the car. The insurance alone will bury you. BMWs lose so much value I can almost guarantee that you are upside down on the loan unless you put some unusually high amount of cash down. $56 a year is not enough to drive a BMW. Even $90K a year is barely enough. Anyway. Stop getting credit cards and put as much as you can't towards the cards. Starting with the highest interest. I'm assuming the store cards have somewhere around 30% interest. Pay them down first.

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She bought 3 years old, and a 4 series. It shouldn't have been more than 25k, and that is with low mileage and lots of bells and/or whistles.  Not as bad of a decision as "BMW" suggests, and with it being pre-depreciated, she probably isn't underwater unless she went with 84 months or something.

OP, I think you might need to look into increasing your income,  perhaps get an extra room mate, or rent out your car on days off. Or Uber in the evenings.

EDIT:  Corrected pronouns

[Anonymous]

Thank you! That’s actually what I’ve been doing since I got the new gig. Guess I’ll be sticking it out! And as far a selling my Beamer, although it’s a logical plan, this girl will be in that Beamer til the wheels fall off lol. I do appreciate your advice! Enjoy your weekend!

[Anonymous]

Hi! Thanks for your response. My insurance isn’t high at all, and I’ve never missed a car payment nor have a I missed a credit card payment. Thanks for that advice on paying down the store cars first! I’ve definitely been paying down my cards with the snow ball method like another poster mentioned but I’ve been doing lowest balance first. Just gonna stick it out lol.

Enjoy your weekend!

[Anonymous]

Hi!
Thanks for your response and for sticking up for me a bit lol. My car was 28k Bc it’s an msport coupe (so unfortunately, no uber but I do uber eats sometimes!).
I’m a “she” lol.
And great advice! I actually have a couple of business and I definitely need to start making more income with those. Never thought about renting out my car..in my town though, idk lol. Thanks again! Have a great weekend!

[Anonymous]

Before you are able to make more income, you must first cut your current spending, you're living over your means. Whether that means your car or others only you know but it's simple math that you can't get around. Good luck.

[Anonymous]

It seems that you're heading for another rebuilding season very soon then.