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Huge Credit Card Debt

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Valued Contributor

Re: Huge Credit Card Debt 110k Closing Accounts Question

You need to care very much about utilization and scores right now if you want any chance of lowering your interest costs by balance transfer or personal loan.

 

I would calm down and sit tight.

Ch 7 Discharge May 2015
Discover/Target/NFCU CLOC/NFCU Cash Rewards/PenFed Power Cash Rewards/PenFed Pathfinder AMEX - $60k total revolving
EQ/EX/TU: FICO 8's Oct 2018: 700/685/671, 1% utilization/AZEO, INQ's: 6/2/4
Message 51 of 104
New Visitor

Re: Huge Credit Card Debt

My situation was similar.

A business man I had invested with was committing fraud. My life saving went up in smoke. My loans at the time were with a line of credit, not credit cards. But I’ve used CC recently.

For Credit Cards I have been developing real estate the past 3+ years and have used promo rates to do repairs. The plan was that the rehabbed places would allow me to repay the credit cards before the promos expired. Then a few units were trashed and a property manager let a guy stay for over 6 months rent free without eviction. Profits became losses.

The first promo rate comes due next month and it’s going to be close.

 

What worked (or is working) for me:

1.  A Decade Ago - $55,000 line of credit.

I want to give credit where credit is due. So, let’s start with the business collapse. Warning: Below is a God Story.

When it happened I was at least $55000+ in debt. (Plus lawyer bills of $4000 per month.) I sought solace in the Bible. (I’m a Christian and taught Sunday School – if you think this is stupid, hey, there is wisdom in Bible. And some people seek solace in alcohol. God works. Booze doesn’t.)

I read a verse in Proverbs that said, “He who gives to the poor, lends to the Lord.” I could remember a few things I’d done for poor people – not much, but a little. I smirked and then I looked up and said, “God, I never thought I’d do this, but I’m calling the loan.”

(I’m not sure, but I think God smiled.)

That year money fell from all over the place (heaven?). I had done work for somebody 10 years previously and got 10% of a bare lot because they had no cash to pay. They sold the lot and I got $4000. I had purchased shares in Super-8 Motel in CA For $3200. They sold the motel. I got about $13,600. I and my wife lived cheap. In one year (maybe 13 months), God paid all of the $55,000 back. Wow!

My wife (sadly, we’ve now divorced), told me: “God speaks your language.” Yep.

 

2.  For the credit cards (last few years) I did a spreadsheet. I listed all the debts, the interest rates, when promos end, and the utilization percentage (so I see it and watch it go down). I separately list the amount of debt each month, so that I can watch it – $38,000, $36,000, $33,000 . . .

When you’re living cheap, it doesn’t feel like you’re getting anywhere. But a paid off card and lower numbers each month count. If utilization goes from 89% to 73%, or a card is paid off, there is joy in Mudville.

I have now learned here that key utilization rates (each card and overall) are: 88.9%; 68.9%; 48.9%; 28.9%; 8.9%. When I paid one card down below the 68.9% ($550 payment) my hypo score (Credit Karma - lousy but free) went up 18 points. When I paid $2200 the month before (4 times more) on my line of credit, it went up 16 points. Those percentages on individual and overall card utilization matter. A lot. Credit Cards count a lot more than lines of credit.

Every paid off card is a success. Every balance reduced by $500-$1,000 in a month is a success. Every month without borrowing more is a success.

(I try to remember to say, “Thank you, God”. Give credit where credit is due.)

 

3.   I know that as that utilization goes down, the offers for more credit will come. I need to pay down $3300 (to get to 48.9%) and then $8,900 more (to get to 28.9%).

I currently have $33,800 on promo rates averaging 1.5% (yes, that's right: 1.5%). The first ($8,000 – on a commercial card that doesn’t report to FICO) is due in 40 days. Then $11,000 is due in 100 days and then $6,000 30 days later. I’m paying down the card with soon expiring promo rates first. Unfortunately, property taxes are also due when the cards are due in August.

I may carry a balance on the commercial card in order to get the 30-50 points extra on FICO.

 

4. If I can switch a card to get another promo rate, great. But I will still pay down either the card or pay down a line of credit. I have to keep credit card utilization down to qualify for the cheapest credit, long term.

5.  If I can get a fixed 4 year loan I’ll pay down one of the high interest cards pronto. Installment loans are treated diffenently by FICO. So at about 40%-48.9% on the credit cards (it will take more for you), I should qualify for an installment loan. That will allow me to pay down $10,000 of credit card debt. My Credit Score may go up 50+ points (currently around 685). Then I qualify for mortgages or other loans.

US Bank does "stated income" installment loans up to $25,000; $50,000 with proven income (your work). I got one, 4 year, back when I was at 755 FICO, at 6.25%, with a cost of $50 to set up the account. I used it pay for a modest home that I now rent (homes are cheap in parts of Michigan).

 

6. I also want to add that you need to have a $1,000-$5,000 reserve. You could get sick or get a horrible person as a trainee and decide being a trainer is not for you. Miss a payment and the banks may garnishee. Keep paying (maybe call them, too) and they are apt to let things go. You’re getting caught up.

 

7  Since you have 25% and 27% loans, I’d pay them first, although you won't feel as good as when an entire card is paid.

 

8  I will add, because I’ve driven truck, make sure your residence is in a State with 0% income taxes. That’s several thousand a year. If you share your apartment (your likely on the road 25 days a month) that’s another $2000-$5000 you can cut back and save.

Please tell your drivers that Rule #1 is to drive safely - if they get a load late (or with bad weather/traffic), they need to not press it. They should text dispatch that the load will be late, because of safety concerns. No harm, no foul. I had a trailer bender when I was pressing (driving in near panic mode), which resulted in my not being able to drive for one company. I didn’t know I was allowed some percentage of late loads, especially if the customer was late with the load.

 

An Aside: Money can become a God.

You will not necessarily be happier with enough to retire at 45. Invest in what makes you happy – for me, that includes relationships. A person you love and sharing that love can make life a lot better than a large account with your bank on brokerage firm.

 

Message 52 of 104
Established Member

Re: Huge Credit Card Debt 110k Closing Accounts Question

Ok thank you, I wasn't thinking about that. That if I still keep the lines open it still shows lots of credit which hopefully I use in my favor a little later.

 

I am looking at running team for a company, I just went to the terminal and the manager said the teams on this account are making 2k-2500 a week each, I have the driving experience and the endorsements, would be running 2 26ft trailers doubles. Regional off 2 days a week, I have someone interested in teaming with me they just don't have enough driving experience right now, but the company says they can accomadate them if they have the endorsements and complete a 60 day training period.

 

Thanks I am doing ok where I am at now, but definetly want this paid off faster, by increasing my income, I know these are if's but I am already qualified to drive for this company just need a teammate for sure, and yes I have done team before at a subpar company so I already know the factors in sharing a truck with someone else, but I would still be off 2 days a week at this company and home through out the week.

 

And to someone else that message me again these are ifs but realistic if's that I am making happen as I already have cut my spendings, living expenses drastically and increased my income with lots of things. My if's are not winning the mega millions, just things I am currently doing and making happen.

 

Thanks again.

Message 53 of 104
Established Member

Re: Huge Credit Card Debt

Thank you very much for post, Yes safety is always priorty in my career, thats number one, I always drive for conditons, and I hate when cars pass me and cut right in front of my bumper especially with no one behind them in the left lane, if only they knew how stupid this is as I am a 80,000lbs boulder moving if a deer jumped in front of them and they hit their brakes abrubtly I am going to try to stop but at the end of the day they will run over the deer and I would run them over, I can't stop that fast just like a train, but I have ran deer over unentionally as we are taught never to swerve, without a scratch on my truck but I always back off when cars tend to do that, and we always try to move over when disabled cars are on the side of road if other vehicles let us. I wish 4 wheelers knew this as If I am trying or get in the left lane its not to slow you down as I cant go that fast but only because I see something ahead as a possible hazard and switch right back to right lane once pass it. Truckers can see a lot further on the highway/interstate due to sitting up 5 ft higher.

 

I see the point in paying off the high interest ones first, which I would like to do, about 25k total of my debt is in those high interest range, I am using a combo of both right now. paying off smaller cards and have used one of my lower interest credit cards to pay my rent with a $15 fee but put that cash to a higher interest card.

 

I am hoping to just get my utilization down and hopefully use a consolidation loan for any higher interest debt I have at the moment and as with living cheap I don't care as I always lived releatively cheap just never looked at all the expenses I could have and should have been cutting from my intial 40 plus debt , such as me getting off brands, I just reduced my cell phone bill by 15 a month, my rent, utilities, everything, and I am working so much now it really does not affect me much, as I am barley home just a place to lay my head for sleep. I live on an air mattress, but again I seriously do not care. I have no other obligations then to get these creditors payed off.

 

And again if anyone is reading, it might not be for everyone but getting your cdl can be very lucrative, for something that you can get in a day possibly. but it is definetly a good opportunity to make some good money if you enjoy driving, and I can go into further detail with all the knowledge I know if anyone wants to know.

 

Also in my state I still pay state income taxes, If I were to move right now I was looking at jobs in the midwest hauling oil paying 4-5k a week or 45$hr plus overtime, but I need about 2 more years of experience.

 

I am a loner (good for truck driving) and you are right money does not make everyone happy as I don't look for anything materialistic and I don't care, I had over a quarter million dollars in credit and was not living the high life just supporting my already nominal lifestyle while just paying debts and not considering little cost that added up that I should have been cutting at the time or looking for assitance just because I always wanted to make my payments I just have morals and if I ate the steak no matter why or what my circumstances were I have to pay for it, and feel good paying off these obligations. I never screw anyone or any entity over even if it is a bank. I figure out what has to be done and while it took me awhile I have arrived at a good paying career that suits me now. it took me a little over 3 yrs to get into this and I plan on being out in just the same amount of time.

 

Thank you very much for your post and advice and encouragement.

Message 54 of 104
Established Member

Re: Huge Credit Card Debt 110k Closing Accounts Question

@thisJustin21 Thank you very much for encouragment, that was not something I thought of, asking to downgrade, just trying to collect all info that I can.

 

thank you very much for advice and encouragement.

Message 55 of 104
Established Member

Huge Debt 110k update

Got another card payed off!!! another balance while small I don't have to worry about, been working so very very hard driving and working 10 -20 hrs a day in total between driving and other income, I will keep post short but I am making more and more progress, and while jumping around with odd jobs plus my full time and donating plasma, paying most of my expensives I keep putting more to this debt while living very cheap. FEELS GREAT.  Been living off my plasma and side job money, never using credit anymore, all money from my full time been going to pay this off.  Lol I go to dollar tree/general to buy food ramen noodles and frozen dinners for 80cent as well as pb n jelly getting all my proteins and starches and everything is perfect when I donate plasma blood cell wise, they always ask when at dollar stores if I am using ebt card, no I am using my plasma card lol. I pick up change and make every dollar count now.

 

I just enrolled in school summer session as well, finish a degree and make money while doing so (GI Bill).

 

Making progress, Gonna keep working hard, I never give up, but cant wait to be around 90k maybe get a consolidation loan then, I am gonna make it happen for sure, everyday is looking a bit better though.

 

I will keep updating.

Message 56 of 104
Community Leader
Valued Contributor

Re: Huge Debt 110k update


@bdub1234 wrote:

Got another card payed off!!! another balance while small I don't have to worry about, been working so very very hard driving and working 10 -20 hrs a day in total between driving and other income, I will keep post short but I am making more and more progress, and while jumping around with odd jobs plus my full time and donating plasma, paying most of my expensives I keep putting more to this debt while living very cheap. FEELS GREAT.  Been living off my plasma and side job money, never using credit anymore, all money from my full time been going to pay this off.  Lol I go to dollar tree/general to buy food ramen noodles and frozen dinners for 80cent as well as pb n jelly getting all my proteins and starches and everything is perfect when I donate plasma blood cell wise, they always ask when at dollar stores if I am using ebt card, no I am using my plasma card lol. I pick up change and make every dollar count now.

 

I just enrolled in school summer session as well, finish a degree and make money while doing so (GI Bill).

 

Making progress, Gonna keep working hard, I never give up, but cant wait to be around 90k maybe get a consolidation loan then, I am gonna make it happen for sure, everyday is looking a bit better though.

 

I will keep updating.


Thanks for the update, so glad you are working hard on getting your debt down. Keep up the good work:}

CU NFCU PENFED ALLIANT BANK USAA BBVA BB&T PPMC IKEA MARVEL DISCOVER STORE LOWES AMAZON MACYS WALMART WAYFAIR CARECREDIT CARCARE
Message 57 of 104
Established Member

Re: Huge Debt 110k update

@jnbmom, I am working very, very hard and trying, I will get this payed off. just a matter of time, but I am very hard working. And I will dispell any rumors its not possible for the average person. I have already got so much payed off in a short period of time, and I am gonna make it happen, Most people don't like to work and go their life on state and fed aid, but I screwed up at one point getting myself into this debt and then escalating it with no plan and min wage after, but I will still get out of this due to self preservation and I have never received any gov/state benifits. I am sure this is similar as an obese person that is told they will be dead in a yr if they don't change their diet, they didn't realize how big they got till it was almost to late, then change their life around but never saw how big they were getting previoius to that, but everyone wants to live and live their best life. when pushed persons can do extrondinary things if they put their minds/body/work ethic to it.

 

thanks for encourgment and I will update soon.

 

Message 58 of 104
Valued Contributor

Re: Huge Debt 110k update


@bdub1234 wrote:

@jnbmom, I am working very, very hard and trying, I will get this payed off. just a matter of time, but I am very hard working. And I will dispell any rumors its not possible for the average person. I have already got so much payed off in a short period of time, and I am gonna make it happen, Most people don't like to work and go their life on state and fed aid, but I screwed up at one point getting myself into this debt and then escalating it with no plan and min wage after, but I will still get out of this due to self preservation and I have never received any gov/state benifits. I am sure this is similar as an obese person that is told they will be dead in a yr if they don't change their diet, they didn't realize how big they got till it was almost to late, then change their life around but never saw how big they were getting previoius to that, but everyone wants to live and live their best life. when pushed persons can do extrondinary things if they put their minds/body/work ethic to it.

 

thanks for encourgment and I will update soon.

 


Slow down with the sweeping generalizations of people you know nothing about. It's highly offensive.

Ch 7 Discharge May 2015
Discover/Target/NFCU CLOC/NFCU Cash Rewards/PenFed Power Cash Rewards/PenFed Pathfinder AMEX - $60k total revolving
EQ/EX/TU: FICO 8's Oct 2018: 700/685/671, 1% utilization/AZEO, INQ's: 6/2/4
Message 59 of 104
Regular Contributor

Re: Huge Debt 110k update

 


@bdub1234 wrote:

Got another card payed off!!! another balance while small I don't have to worry about, been working so very very hard driving and working 10 -20 hrs a day in total between driving and other income, I will keep post short but I am making more and more progress, and while jumping around with odd jobs plus my full time and donating plasma, paying most of my expensives I keep putting more to this debt while living very cheap. FEELS GREAT.  Been living off my plasma and side job money, never using credit anymore, all money from my full time been going to pay this off.  Lol I go to dollar tree/general to buy food ramen noodles and frozen dinners for 80cent as well as pb n jelly getting all my proteins and starches and everything is perfect when I donate plasma blood cell wise, they always ask when at dollar stores if I am using ebt card, no I am using my plasma card lol. I pick up change and make every dollar count now.

 

I just enrolled in school summer session as well, finish a degree and make money while doing so (GI Bill).

 

Making progress, Gonna keep working hard, I never give up, but cant wait to be around 90k maybe get a consolidation loan then, I am gonna make it happen for sure, everyday is looking a bit better though.

 

 

 

I will keep updating.

 

 Fantastic!!  No one can call you lazy...you’ll be debt free before you know it!

Congratulations!


 

Message 60 of 104