I need some advice on a plan of attack

[Woolfman]

I have almost 5k in savings to put towards these bills and still leave us 1k in savings for an emergency fund.

I have

 bb store card with  290 bl  850CL 0%  $40.00 a month to stay on track to have paid off ahead of offer ending

               ashleys    2500 of 4000cl    0%  $100.00 a month  to stay on track to have paid off ahead of offer ending

WF Card (new a/c and duct work for house ) 5k bl  6,4k limit 9.9%   115 a month min been paying 120.

                Citi card  11.1k BL  12.5k CL 15.99% min payment is now 268 bt ended been paying 500+ a month but have had some set backs and used the card

                 Alliant card 1.3k bl 5k CL  12%

                  BOA AMEX 0 BL 3.5k CL  Has a 12 month 0% BT offer right now .

                 Numerous other cards  Usaa,UMB,hooters, Nationwide, 2 RZMC all  are always PIF if we use one of them .

                Some of it was unavoidable stuff most of it was just reckless spending on our part .

Current Util is 45%

 So there is my mess We expect to get a decent tax return that will go to these bills (a/c has a 1.5k tax credit ) we generally get about 2k to 3k back each year. Also cant completely count on it nor know a set amount. But the wife generally gets 3k to 5k as a 4th quarter bonus (around march). 

But im torn , Do i snowball it? lowest to highest  forgetting the 0% rates. Or follow my mathematical side of the brain and pay down the biggest first. That is costing me more money. 

I was thinking transfer 3350 to the BOA off of the Citi card to kill that interest for a year . put the almost 5k on the citi leaving the balance just under like 3.5k

and should have that paid off in 8 months and then move on to the WF next.

Any Ideas,insight or abuse would be appreciated !

Im amazed with all this my TU is still 675!

[Anonymous]

Woolfman,

From my calculations, you have ~ $20,190 in CC debt, is that right?  And you have ~$5k to put towards this?

Here's what I would suggest:

Pay off the BB (I know it's at 0% but better to just kill it)

Pay off the Ashley's

Pay off the Alliant

Pay $100 on the Citi

Pay $800 (or whatever's left) on the WF

That'll leave you with only 2 cards with balances, which is a much better position since its easier to pay 2 bills than 5!  It will also free up those payments to put towards the CITI.  How much is the BoA BT fee?  If you can pay ~ $5k off before the 12 mo are up, it might be worth transfering that from the Citi but honestly, I think the best thing for you is to just push forward and try to pay off the last two cards as soon as possible...If you do get a tax credit from the a/c, you should apply that to the card for sure!  And I would use at least half of the remaining funds you recieve to build a "house" fund so you don't have to put that stuff on a CC next time.

If you just push ahead, you should be able to pay off the WF within the next 8 months, with the tax return added on and the Citi within the next 18 months, snowballing the payments for the other cards to it.

Finally, as you mentioned, reckless spending needs to be addressed or this will happen again...set a plan up for how to pay for something within 2-3 months of purchase before buying stuff and it will help keep you on track.

Hope that helps

[Woolfman]

Thank you for your thoughts .

The BT  fee on the boa is the standard 3%   So that's why I was thinking about doing that also . atleast it would help cut down some on the interest we are incurring and help us pay stuff off that much faster.

I have been working on the mind set , But its a battle so far to get my wife on the same page. I knew I was in a losing battle when we spoke about the Credit cards and to stop using them and her response was "I just don't get you, You have about 50k in CL's but don't want to use them. . She thinks I'm obsessed with money , When its just more that I'm uncomfortable with our debt. Are we struggling? No we can afford every payment we have and more. Just in my eyes we should be saving more for retirement and other stuff we want in life than throwing it all away in interest and CC payments.

Thank you again for your input.

[haulingthescoreup]

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@Woolfman wrote:

...I have been working on the mind set , But its a battle so far to get my wife on the same page. I knew I was in a losing battle when we spoke about the Credit cards and to stop using them and her response was "I just don't get you, You have about 50k in CL's but don't want to use them. . She thinks I'm obsessed with money , When its just more that I'm uncomfortable with our debt. Are we struggling? No we can afford every payment we have and more. Just in my eyes we should be saving more for retirement and other stuff we want in life than throwing it all away in interest and CC payments...

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There's a big difference between having $50K in available credit and having $50K in the bank!

The way I look at it is that I care a lot more about myself than I do about the banks, and I'd rather give money to me (via savings) than to banks (via interest payments.)

And the other thing that drives me is the knowledge that if I owe anyone money, I am to some extent in their power, because I'm a debtor. And I like to choose who I let have any power in my life. (I can assure you that it's not a financial institution. )

Good luck. There's a good reason that money issues are the #1 cause of marital tension.

[RobertEG]

There are two very different approaches.  One is immediate FICO score improvement, and the other is current financial.

If you dont plan to apply for new credit in the near future, I would put FICO on the back burner, and look at if from a financial basis.

From a financial point of view, your card with the highest balance and highest interest rate is the CITI card. 

With an APR of 15.99%, that is aprox 1 1/3% a month on the current balance.  With a current balance of $11,100, that is a current payment out of pocket of over $140 a month just in interest on that card.  CITI would clearly by my priority for financial purpose.

Using the same analysis, you are paying approx. $41 a month in interest on the WF card.  That would mandate second priority.

From a FICO point of view, your highest % util card is also CITI, now at 89%.  So that is having the most impact on FICO scoring.

WF is second at 78% util.  You will get a lot more FICO improvement in paying down the highest % util cards than in getting a lower % util card down to $0.

Under either analysis, my priority would clearly be first on the CITI card, and then on the WF card.

[RobertEG]

Bottom line is that in your current monthly payments, approx. $200 is going only to interest, which does not lead to any quick improvements in reduced interest or increases in FICO scores.  If you pay CITI $500 a month, over $140 does not go towards principal balance reducttion.  At that rate, CITI would maintain a balance for around two years, assuming that the card had no further purchased during that time.

I doubt that your spouse would, if asked, willingly flush $200 a month down the toilet.

[Anonymous]

How much are you paying for your Alliant card monthly?

What is the minimum due on BB store card and Ashleys?

When does promo APR will end and what is the APR after that on BB store card and Ashleys?

[Woolfman]

That was my way of thinking Robert.  I know some say the whole snowball the payments is the way to go but I just cant seem to get myself into that train of thought. Im not out to just improve my fico score. I honestly want to get out of debt

Bunny the BB store card still has like 8 months. I have been paying the 40 a month so it will be gone before the promo ends . min payment is $10

and the ashley's card i believe (i hate cards that have no website to look at everything) is till Feb 2013.  min payment here is 25 i believe . I firmly believe that they give you the 0% terms and then dont send you statements everyother month just trying to get you to slip up and miss a payment or paylate so they can raise the rate. I dont seem to get a statement every month.

[Anonymous]

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@Woolfman wrote:

That was my way of thinking Robert.  I know some say the whole snowball the payments is the way to go but I just cant seem to get myself into that train of thought. Im not out to just improve my fico score. I honestly want to get out of debt

Bunny the BB store card still has like 8 months. I have been paying the 40 a month so it will be gone before the promo ends . min payment is $10

and the ashley's card i believe (i hate cards that have no website to look at everything) is till Feb 2013.  min payment here is 25 i believe . I firmly believe that they give you the 0% terms and then dont send you statements everyother month just trying to get you to slip up and miss a payment or paylate so they can raise the rate. I dont seem to get a statement every month. 

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BB Store Card      290  bl    Minimum Due    $10    Pays    $40    APR  0%   until  06/2011   

Ashleys               2500 bl    Minimum Due  $ 25    Pays   $100    APR  0%   until  02/2013  (really?  it is over 2 yrs)

I was thinking reduce the payments to the minimum on those two ccs and pay the difference to the Citi to reduce the interest charge as much as possible.  I guess not ...  

Be careful ... Never Ever  miss/Late  the payments!

[Woolfman]

yes the ashleys is a furniture store . We got 36 months 0% interest