you didn't include interest, but that is a significant factor in a repayment plan. even if the credit cards each had a moderate 16% interest rate, that is a hemorrhage of $873 monthly in interest alone. if the rates are higher, obviously it is more.
unless you really need the mental wins of the snowball method, it will save you money to use the avalanche method.
the only other senario I would consider:
because all your cards are max utilization, maybe take 7k of the 10k and get each card under the last threshold. then start the avalanche method.
| limit | balance | util | payment | balance | util | |
| Venture | 22500 | 20450 | 91 | -1325 | 19125 | 85 |
| Amex BC Preferred | 19300 | 18900 | 98 | -2495 | 16405 | 85 |
| Barclay Titanium | 11000 | 10950 | 100 | -1600 | 9350 | 85 |
| Discover | 6500 | 5750 | 88 | -225 | 5525 | 85 |
| Savor | 5000 | 4970 | 99 | -720 | 4250 | 85 |
| Amazon Chase | 3000 | 2930 | 98 | -380 | 2550 | 85 |
| Best Buy Citi | 1650 | 1560 | 95 | -158 | 1403 | 85 |
| total | 68950 | 65510 | 95 | -6903 | 58608 | 85 |
the auto loans are likely at a lower rate than the credit cards, so I would leave them for last.
As others have said, the avalanche method is the most cost effective method, as you're tackling the highest APR balances first, and as you pay them off, you free up those payments/interest to apply to the next highest, etc.
The snowball method is similar except you tackle the smallest balances first. This method "feels" good because you're knocking out entire card balances faster especially at the beginning, but it ends up costing more in the end in terms of interest paid.
If you could repost your list with the APR of each card/loan, that will help us decide on a strategy. Also post the minimum payment on each if you have that info handy. You could also use a hybrid of the two methods as well, by paying off some of the smaller balances to get them out of the way (like the Citi Best Buy and Chase Amazon), then avalanche the rest.
If credit scores are a concern, the recommendation to get utilization down on all the cards to 85% or lower will help with that. Bear in mind that some issuers may start balance chasing you as you pay them down, especially if you've been carrying this debt for a while. Don't let this deter you, concentrate on paying down the debt. You can assess the damage and take your next steps after you're out of debt.
Also, don't go running up charges again if you don't have to, since that will just get you back into the situation you're trying to get out of.
I'd save the car loans for last, unless they're high APR loans. Chances are they're lower than your credit cards.
Lastly, see if you can cut some expenses to free up funds toward your debt. For example, canceling or downgrading cable or streaming services, stop eating out, etc.
@Anonymous wrote:Hello all,
Thank you for your responses thus far, sorry I didn't provide the payments and APR's. Here they are, so you guys can update/help with a strategy. I was tempted to do National Eebt relief, and do a down payment of 25 percent, but after reading here it will wreck my credit.
Venture APR / Payment - 22.99% - $584/m
Amex APR / Payment - 22.99% - $548/m
Barclay APR / Payment - 14.99% - $248/m
Discover APR / Payment - 14.99% - $115/m
Savor APR / Payment - 23.49% - $147/m
Amazon Chase - 22.24% - $86/m
Best Buy APR / Payment - 25.29% - $58/m
Auto Loan 1 - 10.02% - $509/m
Auto Loan 2 - 15.24% - $469/m
Thank you again, guys.
I'd pay off Best Buy, Amazon and Savor first. They're high APRs plus they're smaller balances so you can knock those out right off the bat. This will also free up $291/month to use toward the remaining debt. Then start chipping away at the Venture and/or the Amex. Those two will take a while, but it'll go faster and faster as you pay them down and the interest charges go down. Then Barclay and Discover last. Finally, hit the auto loans with some extra, especially the 15.24% one.
Option B would be to knock out Barclay and Discover before Venture/Amex, but that is more snowball than avalanche and will cost more in interest, but you would then have more each month to put toward the two biggies.
Can you cut other expenses or take a 2nd job to bring in some extra? If so, that would give you more each month to pay down the debt faster.
your DTI is really high and paying everything down to the last threshold isn't going to help that situation that much. I wouldn't really worry about score at the moment because seeking ANY is currently impractical.
| credit cards | -1786 |
| auto 1 | -509 |
| auto 2 | -469 |
| rent | -1825 |
| total payments | -4589 |
| GROSS income | 5496 |
| total | 907 |
in your situation, I would take the 10k and pay off the cars given the implied necessity.
then I would avalanche for 12-18 months to improve your DTI and score.
if you're haven't already, join a credit union or two. set up your direct deposit, use their bill pay, etc and anything you can do to build a relationship while you avalanche for those 12-18 months. at that time seek out a personal loan from said credit union or other friendly lender at lower rates because you're still going to be 50k+ in debt at 20% blended apr.
in the undesirable scenario where you were unable to "roll" ~1000 in monthly payments from the cars into paying off the credit cards and kept paying the ~1800 monthly currently paid towards credit cards, you're looking at a 5-6 year avalanche to payoff.
| apr | balance | payment | nper | |
| Venture | 22.99 | 20450 | -584 | 59 |
| Amex BC Preferred | 22.99 | 18900 | -548 | 57 |
| Barclay Titanium | 14.99 | 10950 | -248 | 65 |
| Discover | 14.99 | 5750 | -115 | 79 |
| Savor | 23.49 | 4970 | -147 | 56 |
| Amazon Chase | 22.24 | 2930 | -86 | 54 |
| Best Buy Citi | 25.29 | 1560 | -58 | 40 |
| total | 65510 | -1786 |
*I always honestly answer these questions as if I was in the situation, given everything I have experienced paying off my own 30k+ unsecured debt over the past three years. I am a nobody, non financial expert obviously.