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Advice on what to do.

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JetOneTV
New Contributor

Advice on what to do.

RYmo71D

 

It is expected, the photo is understandable, but anyway I've been irritated on where to go from this point. I understand it's wounding to keep holding debt but it's also a pain to suffer to merely yield something that you didn't implement... (family) - but anyway with everything that is going on right now in the world. I thought I would aspire to this community for advising on moves in this position. - I feel terrible because I started this all late (401k Stocks, HSA, RIRA, etc. whatever - Still learning) ... but I do have between 120k - 150k in terms of multiple credit cards and credit scores "Credit Karma: "761/743" - by the way I'm in California area. - stay with parents only by my own options to save money instead of occupying an apartment, even though I'd preferably be on my own.

 

Please send any advise and thank you.

Bank of America Cash Rewards Visa Signature: $28K | U.S. Bank Cash® Visa Signature® Card: $25K | Arrowhead Visa® $15K | My Best Buy® Visa® Card: $15K | Citi® Double Cash Card: $12.75K | PenFed Gold Visa® Card: $12.5K | PenFed Promise Visa® Card: $12.5K | U.S. Bank Cash 365™ American Express® Card: $16.2K | Wells Fargo Active Cash® Card: $12K | BankAmerica® Better Balance Rewards Platinum Plus Mastercard: $12K | Citi Simplicity® Card: $11.1K | Chase Freedom® Card: $10K | PayPal® Credit Digital Credit: $10K | PenFed Platinum Rewards Visa Signature® card: $7.5K | The Bread Cashback™ American Express® Credit Card: $7K | Navy Federal More Rewards American Express® Card: $7K | Apple Card: $6.5K | JCPenney Mastercard®: $6K | Chase Amazon Prime Rewards Visa Signature Card: $5.8K | American Express® Blue Cash Everyday® Card: $5K | Wells Fargo Autograph℠ Card: $4K | Chase Ink Business Unlimited® Card: $3K | Best Egg Card: $3K | PlayStation® Visa® Credit Card: $2.9K | Micro Center Insider® credit card: $2.1K | Hot Topic Guest List Credit Card: $400 |

| 1st CC since 2007 | Last Updated: 09/29/22 | Total: $252.25K |
7 REPLIES 7
Anonymous
Not applicable

Re: Advice on what to do.

I would payoff those high credit card balances even if currently 0%. You have the money and I dont see any huge benefits over a few months. Additionally, it will stop irritating you when you see it. Right now it is a repeated reminder of you lending money. You will feel better once it is gone. I would also accept the fact that you may never get it back and move on. If you do get repaid then it's a bonus. I dont have much else to give on investments other than to encourage you to start contributing to your 401k. Not sure I read all your info correctly. You live at home with your parents (I assume your girlfriend lives elsewhere); and you share credit cards with the girlfriend. You can obviously do what you want, but that sounds like a hot mess waiting to happen.
Message 2 of 8
JetOneTV
New Contributor

Re: Advice on what to do.

1. contributing to your 401k

 

A: I've just started this job in 2019, you see I was working under-table for almost 10yrs after leaving high school. (Did go to college.) - I didn't start 401k because well I can't until after 1 year has passed, and employer match is off due to COVID anyways for the foreseeable future. - plus this was alot more default in the past because of other things that happened in the past.

 

2. You live at home with your parents (I assume your girlfriend lives elsewhere)

 

A: I actually used to come and go when she was living with your grandparents - I've been with her during the passing of both her grandparents passing and funerals. She also has some of her own credit cards where we share them - Target Credit Card she has it but we only use 1 account via app if we ever went to Target (for example) - she used to have bad credit (due to her mother etc) but over the years while I was learning I was able to fix her credit at the same time. (And she actually lives with me and my parents after everything that happened with her grandparents.)

Bank of America Cash Rewards Visa Signature: $28K | U.S. Bank Cash® Visa Signature® Card: $25K | Arrowhead Visa® $15K | My Best Buy® Visa® Card: $15K | Citi® Double Cash Card: $12.75K | PenFed Gold Visa® Card: $12.5K | PenFed Promise Visa® Card: $12.5K | U.S. Bank Cash 365™ American Express® Card: $16.2K | Wells Fargo Active Cash® Card: $12K | BankAmerica® Better Balance Rewards Platinum Plus Mastercard: $12K | Citi Simplicity® Card: $11.1K | Chase Freedom® Card: $10K | PayPal® Credit Digital Credit: $10K | PenFed Platinum Rewards Visa Signature® card: $7.5K | The Bread Cashback™ American Express® Credit Card: $7K | Navy Federal More Rewards American Express® Card: $7K | Apple Card: $6.5K | JCPenney Mastercard®: $6K | Chase Amazon Prime Rewards Visa Signature Card: $5.8K | American Express® Blue Cash Everyday® Card: $5K | Wells Fargo Autograph℠ Card: $4K | Chase Ink Business Unlimited® Card: $3K | Best Egg Card: $3K | PlayStation® Visa® Credit Card: $2.9K | Micro Center Insider® credit card: $2.1K | Hot Topic Guest List Credit Card: $400 |

| 1st CC since 2007 | Last Updated: 09/29/22 | Total: $252.25K |
Message 3 of 8
KLEXH25
Valued Contributor

Re: Advice on what to do.

Well, you have a great nest egg at least! It looks like most of your cards are PIF every month with the exception of the two with the balance at 0% for now. You have the money to pay then off, so that's always an option. Or you can plan out your remaining monthly payments so that you don't pay interest. You might want to do a combination - throw down half at each balance and pay off the rest over several months. Do you have a budget at least? Figure out what your monthly expenses are and then save & invest as much as you can with the rest. 



Message 4 of 8
JetOneTV
New Contributor

Re: Advice on what to do.

1. $10,000ish in INVESTMENTS

2. $20,000ish in SAVINGS (1.00% APY)

3. $3000ish Checking (Mine)

4. $1700ish Checking (Her)

----------------------------------------------------

TOTAL: $34,700ish

----------------------------------------------------

5. Her Car: $6,500ish

6. My Car: $13,500ish

----------------------------------------------------

TOTAL $20,000

----------------------------------------------------

7. BIG DEBT CREDIT CARDS (Besides main Credit Cards)

A. $4900ish

B. $2700ish

------------------------------------------------------

TOTAL: $7600ish

------------------------------------------------------

Lately I've been wondering if it's good to buy a house if you knew you might be able to do so with this cash? (assuming if we could... Smiley Indifferent )

 

1. Buy a House? (IF I EVEN COULD ANYWAY...)

2. Pay of the Cars? = $20,000 - $34,700 = ($14,700)

3. Pay of the Credit Cards? = $7600 - $34,700 = ($27,100)

4. Pay of both Credit Cards and Cars = $27,600 - $34,700 = ($7,100)

 

5. $10,000ish of that would have to be pulled out of the INVESTING that I have done, and I wouldn't have anymore and would have to start over again, if I did have to use it of course.

 

I just don't want to make any mistakes, like i've already done in the past.

 

Bank of America Cash Rewards Visa Signature: $28K | U.S. Bank Cash® Visa Signature® Card: $25K | Arrowhead Visa® $15K | My Best Buy® Visa® Card: $15K | Citi® Double Cash Card: $12.75K | PenFed Gold Visa® Card: $12.5K | PenFed Promise Visa® Card: $12.5K | U.S. Bank Cash 365™ American Express® Card: $16.2K | Wells Fargo Active Cash® Card: $12K | BankAmerica® Better Balance Rewards Platinum Plus Mastercard: $12K | Citi Simplicity® Card: $11.1K | Chase Freedom® Card: $10K | PayPal® Credit Digital Credit: $10K | PenFed Platinum Rewards Visa Signature® card: $7.5K | The Bread Cashback™ American Express® Credit Card: $7K | Navy Federal More Rewards American Express® Card: $7K | Apple Card: $6.5K | JCPenney Mastercard®: $6K | Chase Amazon Prime Rewards Visa Signature Card: $5.8K | American Express® Blue Cash Everyday® Card: $5K | Wells Fargo Autograph℠ Card: $4K | Chase Ink Business Unlimited® Card: $3K | Best Egg Card: $3K | PlayStation® Visa® Credit Card: $2.9K | Micro Center Insider® credit card: $2.1K | Hot Topic Guest List Credit Card: $400 |

| 1st CC since 2007 | Last Updated: 09/29/22 | Total: $252.25K |
Message 5 of 8
Revelate
Moderator Emeritus

Re: Advice on what to do.

Should really post the APR's of your various things.

 

General thoughts

  • Credit card debt is usually smart to get rid of, or bring into grace period and PIF before the due date every month.  Paying 15% or so interest is just bleeding cash.
  • Auto loans, somewhere around 5-6% is probably the statistical breakpoint where they should either be paid off or refinanced down.  Rates are really low right now, that's an option.
  • Speaking of low rates, I don't see how paying cash for a house makes any sense.  Same as above, historically 5-6% returns in the market, vs. 3.25-3.5% prevailing interest rates on a mortgage... finance as much as you can.  My own little situation closing on a 325K house in early May I would be absurdly in the red if I'd paid cash, and now if the current market isn't an utter fluke I may just be moving my retirement up from 2025 to maybe next year... it's been that good just staying invested in the market.

Speaking from a long term investor standpoint:

 

Ultimately the righteous course is just look at the arbitrage play aka opportunity cost of the transaction to use more technical terms.  If the historical return in the market is above the interest rate you are paying, stay invested... if it's not, cash that out and airstrike the debt.  Personally I apply the same to the savings account but I know I break some conventional wisdom by just using my brokerage account as my savings as well... if I have to sell something to pay off a short-term financing issue, oh well.




        
Message 6 of 8
CBartowski
Frequent Contributor

Re: Advice on what to do.


@JetOneTV wrote:

RYmo71D

 

It is expected, the photo is understandable, but anyway I've been irritated on where to go from this point. I understand it's wounding to keep holding debt but it's also a pain to suffer to merely yield something that you didn't implement... (family) - but anyway with everything that is going on right now in the world. I thought I would aspire to this community for advising on moves in this position. - I feel terrible because I started this all late (401k Stocks, HSA, RIRA, etc. whatever - Still learning) ... but I do have between 120k - 150k in terms of multiple credit cards and credit scores "Credit Karma: "761/743" - by the way I'm in California area. - stay with parents only by my own options to save money instead of occupying an apartment, even though I'd preferably be on my own.

 

Please send any advise and thank you.


I agree with others, you're in an okay position. Straight up first, I'd sell the car, free up 300$ to put towards your debt. Given your ~34k$ in cash and investments I imagine you have equity in your car. Cash that sucker out, get a car you own for cash, its amazing what you can get for 10-12k$. Sucks to say, I love cars too but man they light cash on fire!

 

Next up for me would be that 23% interest, that has got to go! Then roll on buring thru the debt.

 

I might even look into consolidating my investments into one account/brokerage for ease of tracking maybe make even make a little extra by consolidating. 

 

I don't know if these thoughts are helpful.

 

Good luck!

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Message 7 of 8
sxa001
Valued Contributor

Re: Advice on what to do.

First off, you are on the right track to have an accounting of your debts and to understand where your money is going.

 

I would suggest paying off the credit card debts as an immediate next step.  I know there are some debates on the topic, and I too have used 0% APR offers when I had the money in the bank to just pay a card.  In a way though it is just artificially inflating your account balances.  If we were talking much bigger balances and you had the money working for you and earning it might make sense to hold onto the 0% debt but since you have the funds I say pay it.  

 

If you don't already have a budget, making one to avoid having the high balances again is a given.  

 

Not sure where in California you are, or what kind of house you are looking for.  You mentioned a desire to perhaps buy a house, I don't think that getting a loan would be possible for you simply based on DTI.  If I were you I would take advantage of living with your parents for awhile longer.  

 

Lime @CBartowski, you should consider selling the car and getting something for cash.  

 

Getting out of debt and taking advantage of living at home should allow you to rebuild your reserves again.  You will be much happier when you have no debt and a savings account that looks like your current account. 

 


Message 8 of 8
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