Cancel unused cards?

[Clancaster23]

To start off, this is another post I started where I asked what I should do in my current situation. Debt Relief Program My Only Option? - myFICO® Forums - 6795679

I don't want to do the bankruptcy or the debt relief program but not sure what else to do if it comes down to it.  I want to do whatever I can to avoid doing either of those.

Are you saying I should stop making all payments on all my cards?  What about my loans?

I'll relist what I have going on here to make it clearer.  And just to put it out there, all my cards are very high interest (25%-35%) mainly because I had bad credit in the past (sub 500) and got most of these cards while I was trying to build my credit up.

Cards:

Milestone - No balance, $700 limit (19.25/month fee)

Credit One - No balance, $300 limit (8.25/month fee)

Credit One - No balance , $1,000 limit ($95 AF)

Fortiva - No balance, $1,850 limit ($15/month fee)

(Those are the four I want to cancel now)

Capital One - No balance, $1,000 limit (no af)

Citi - No balance, $1,850 limit  (no af)

Upgrade - $1,800 balance, $2,750 limit, $118 payment
Chase - $1,050 balance, $3,500 limit, Not sure of payment yet

Brightway - $1,560 balance, $2,450 limit, $50 payment

Mercury - $3,020 balance, $7,800 limit, $120 payment

Merrick - $1,940 balance, $2,700 limit, $108 payment

$9,370 balance, $475 est. in payments/month

Loans: (all relatively new loans taken in the last year or so, smaller amounts were taken out to pay off other cards and things to save more per month)

1:  $4,400 remaining, $145 payment

2:  $1,725 remaining, $41 payment

3:  $6,700 remaining, $168 payment

4:  $8,725 remaining, $178 payment

5:  $21,500 remaining, $718 payment (Joint loan with wife but I make the payment so I need to pay this one so as not to effect her credit)

$43,050 total, $1,250 in payments/month

Basically $52,000 total and $1,725 in payments each month.  Also to note, the four cards I will be canceling are 5 years, 11 months (my second oldest card), 5 years, 6 months, 3 years, 9 months and 1 year.  

[Varsity_Lu]

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@Clancaster23 wrote:

To start off, this is another post I started where I asked what I should do in my current situation. Debt Relief Program My Only Option? - myFICO® Forums - 6795679

I don't want to do the bankruptcy or the debt relief program but not sure what else to do if it comes down to it.  I want to do whatever I can to avoid doing either of those.

Are you saying I should stop making all payments on all my cards?  What about my loans?

I'll relist what I have going on here to make it clearer.  And just to put it out there, all my cards are very high interest (25%-35%) mainly because I had bad credit in the past (sub 500) and got most of these cards while I was trying to build my credit up.

Cards:

Milestone - No balance, $700 limit (19.25/month fee)

Credit One - No balance, $300 limit (8.25/month fee)

Credit One - No balance , $1,000 limit ($95 AF)

Fortiva - No balance, $1,850 limit ($15/month fee)

(Those are the four I want to cancel now)

Capital One - No balance, $1,000 limit (no af)

Citi - No balance, $1,850 limit  (no af)

Upgrade - $1,800 balance, $2,750 limit, $118 payment
Chase - $1,050 balance, $3,500 limit, Not sure of payment yet

Brightway - $1,560 balance, $2,450 limit, $50 payment

Mercury - $3,020 balance, $7,800 limit, $120 payment

Merrick - $1,940 balance, $2,700 limit, $108 payment

$9,370 balance, $475 est. in payments/month

Loans: (all relatively new loans taken in the last year or so, smaller amounts were taken out to pay off other cards and things to save more per month)

1:  $4,400 remaining, $145 payment

2:  $1,725 remaining, $41 payment

3:  $6,700 remaining, $168 payment

4:  $8,725 remaining, $178 payment

5:  $21,500 remaining, $718 payment (Joint loan with wife but I make the payment so I need to pay this one so as not to effect her credit)

$43,050 total, $1,250 in payments/month

Basically $52,000 total and $1,725 in payments each month.  

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If you are serious about not filing, you need to cut your cards up, cancel the AF cards, buckle down and get it done. Eat PB and jelly every meal if you have to. Sell anything of value that you don't absolutely need. Put every penny into paying off the loans and cards. Most importantly: stop spending money you don't have. It takes discipline, but you can do it.

[Rogue46]

I'd have to agree 100% with @Varsity_Lu .  You took out most of those cards to build your credit but spent on them which defeated the purpose you need to break the cycle or it's never going to get better.  We are rooting for you!  Make a plan buckle down and stick with it!

[Clancaster23]

I agree with all of what is said.  I tend to be a slow learner when it comes to money.  

The four cards mentioned have been closed.

@Pppoolboy I'd like for you to clarify what you mentioned in your post about stopping payment on the cards I still have.  Is that what you were suggesting as a better route than doing the bankruptcy?

[Clancaster23]

I just happened to look on Credit Karma to see what my scores were on there and they had one of their gauranteed approval things on a personal loan offer.  I decided "why not"?  Applied and got approved for 30k.  Took 25k.  This should set me up pretty good.

[Anonymous]

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@Clancaster23 wrote:

I just happened to look on Credit Karma to see what my scores were on there and they had one of their gauranteed approval things on a personal loan offer.  I decided "why not"?  Applied and got approved for 30k.  Took 25k.  This should set me up pretty good.

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So what are you going to do with the $25K?  

[Clancaster23]

It's enough to pay off the six cards I have a balance on off and all four loans.  I figure I'm going to save roughly $500/month in payments.

[12njoy]

Do you have any employment retirement accounts that you can borrow against?  These may have lower APR's than traditional debt consolidation loans.  A few years back (2021) I took out a loan against my retirement to take care of some outstanding debt and the APR was 1.5% with generous terms.  Now obviously if this is an option, you want to pay that back as soon as possible so that the retirement fund is replenished and you continue to earn interest.  The 25k loan that you were approved for what was the APR/terms on that?  These loans can have steep repayments.  Resist BK and debt relief programs at all costs.  Good luck to you.  

   

[Clancaster23]

Yeah, I actually did do that.  I forget how much I was able to get but it did help q little bit.  Currently still paying it back each paycheck.  As far as the new loan, I believe it's 16.25% or something around that for 5 years.  That's actually the lowest percentage rate I've ever gotten on a personal loan.  The ones I've had were usually mid 20s to 30s so this one was very appealing to me and it is definitely going to keep me from having to do anything like the debt program or bankruptcy so I'm very happy I was able to get it.  Big relief.

[IcyCool7227]

I have never taken out a personal loan but for the credit card balances you have, try going for a 0% introductory like the Citi Simplicity or Citi Diamond Preferred if you don't have a ton of recent inquiries. A good discussion thread with other ones are found here:

https://ficoforums.myfico.com/t5/Credit-Cards/0-interest-Balance-Transfer-cards-with-no-balance-tran...

Of course you already took out the $25k loan but you could pay part of that back and go the balance transfer route to save more money.