What Would You Do?

[Anonymous]

Here is my scenario:  My bills are:  AAFES CC, $7000CL, $6500 BAL @ 13.2%, BOA LOC Loan, $12900 BAL @ 13.9%, LFCU MasterCard, $10000CL, $0 BAL (7.9% BT rate), Merrill Lynch Visa $6000CL, $0 Bal (1.9% BT for 12 mos), MACYS, $2000CL, $0 BAL, LOWES, $4500CL, $0 BAL, AMEX BLUE, $5300CL, $1400BAL (4.99% BT rate until paid), DISCOVER MOTIVA, $8000CL, $1900BAL (3.9% BT rate until Nov 2011), BofA Visa, $9600CL, $0 BAL (12.9% BT rate).

I want SO BAD to get rid of the BOA LOC Loan @ 13.9%!  What should I do?  What balance transfers would be in my best interest, if any?  I need help deciding what is the BEST AND FASTEST way for me to rid myself of these debts?  I am new to this whole "credit repair" and FICO score increasing "stuff".  :-)  I am open to any and all suggestions.  I have been reading here everyday since joining and everyone on here seem very knowlegeable.  I have a definite $700 per month to put towards this.  Of course, I will have extra money here and there to add, but the $700 is definite.  Please help and THANKS!

[Anonymous]

First thing first is the 700.00 that you said you can use is that including the min payments on all CC and loans? 

[Anonymous]

Yes!  My Min Payments are:  AAFES: $110, BoA LOC Loan: $234, AMEX BLUE: $40 (approx) and DISC:  $60 (approx).  A total of:  $454!

[SmartCookie]

I'd start with BTs for your BOA LOC from your your Merrill Lynch (xfer around 5.8k)and Discover Motiva cards (xfer around  5.9k).  If you have a BoA checking account... have them both just cut the BT as a check and deposit it there directly so that you can pay the BoA LOC directly.  That will leave around 1.2 k left on the BoA LOC that you can either BT to AMEX BLUE or just pay off... depending on any BT fees it may be cheaper for you to leave it.  I would also consider BTing as much of your AAFES as will fit to your AMEX and the remainder to your LFCU.

If you start this way, it would be best to see what CLIs you can get from the cards you are BT to BEFORE you BT.  Does not hurt to call and ask if they can increase you with just a soft INQ.  I would not take a hard INQ.  At that time, also ask if they have any more BT promos which might be better for you.  Tell them you are considering moving a large amount and are trying to see what company has the best offer. 

At a later time I would also suggest you call all of your other cc co's and ask the same regarding a CLI with just a soft INQ or account review.  This will help with your scores and UTI... but that is just secondary.

[Anonymous]

So you will have an extra 246.00 to pay over what your Min is on your accounts now right?

I would either pay that on the BOA  or the AAFES. you may also consider splitting it between the two accounts as well.

[Anonymous]

nikkos,

So you would keep all the accounts "as is" and just add to the min payments of the BOA Loan and/or the AAFES CC?

Cookie,

I have already did the CLI requests (got that from reading on the board) and these are the results.  Would doing these transfers resulting in high utilization hurt me?

Thank you both!  I want to weigh all my options.  Right now, Cookie, yours sounds good.  :-)

[Anonymous]

I have seen people in alot tougher situations than this-

23K of Debt min payments $450
700 To put towards it a month is not enough. Based on a quick calculation you could move some of this around and save a little (700-1000) in interest.

Just imagine if this was at 28% APR? Like my DW's was.
We have paid off almost $50K of debt in the last year.
We currently owe ZERO on CC's.

IMHO- it is not the APR that is killing you it is that not enough is being paid to the principle of the amount owed.

12.9K @ 13.9 APR 5 years is $300 a month. 5069 interest.

Paying $600 a month on this 1 account- it will take 2 years to pay off. 2017 in total interest.

Even @ 7.9 APR paying $600 a month the total interest is 1054 over 24 months.

[Anonymous]

Timothy,

So you would just pay more to the BoA Loan?

[Anonymous]

Even if you take SC's advice and move some of this amount your savings is going to be small overall-

I do disagree to just move debt around vs paying it off-
Saving $ is just as important as having a debt elimination plan.

You did not mention if any of these have BT fees.

What I am saying is more $ need to be going to the principal to have a reasonable chance of getting your head back above water.

I am also saying you are lucky to not have been rate jacked by BofA.

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@kino1161 wrote:

Timothy,

So you would just pay more to the BoA Loan?

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[SmartCookie]

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kino1161 wrote:

nikkos,

So you would keep all the accounts "as is" and just add to the min payments of the BOA Loan and/or the AAFES CC?

Cookie,

I have already did the CLI requests (got that from reading on the board) and these are the results.  Would doing these transfers resulting in high utilization hurt me?

Thank you both!  I want to weigh all my options.  Right now, Cookie, yours sounds good.  :-)

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Great on the CLIs.  Transferring will change your individual card UTI but right now that is a non-issue IMHO.  I want to clarify... you have a total of $700 a month to pay all of your cc bills... not $700 extra after min payments.  If this is the case and you choose to do some BTs do them slowly as you're probably going to pay the typical max fee of around $75 each.  Taking into consideration the interest savings that month, doing 2 or more at a time might still be rough.  Crunch your numbers as needed.