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I am 31 years old and want to buy a house in the next few years. I'll list my accounts below. I'm employed full time, have a side hustle, and currently rent. I read somewhere I shouldn't open new accounts within a year (?) of planning to get a mortage, but I'm about 4.5 years away from being out of CC debt. I would like to open a new account for a balance transfer on at least my smallest balanced card, but don't know if I should. I recently got a Lending Club loan and paid off my highest interest cards.
I have 4 inquiries and my FICO score hovers right around 700. It was 715-720 before I opened my Wells Fargo credit card and Lending Club accounts this summer.
I'm paying $100 extra a month, avalanche method. I get $1,000 bonus each December from work and since I live in AK, I will get an extra $1,600 this October for the Permanent Fund Dividend check. I usually use my PFD and tax returns to pay 6-months in advance for my car insurance and apply what is left to paying off debt.
I screwed up by letting a friend use a card and never got paid back, but that's only a small portion of my problem. The rest was young, dumbness combined with living off credit cards while not working during college and a during a stint of unemployment.
I feel like I'm on mostly track with my payments (even though its slow-going and at times overwhelming), but I'm trying to think long-term because I would like to be a homeowner soon(ish). I spoke with a mortage broker this spring, who said I need to either cut my debt by 1/3 or make a lot more money to afford a decent, single-family home. I'm OK with waiting, I just would like to find some balance transfers to cut down on interest in the meantime without having too many inquiries/accounts. If anyone has any thoughts around this, I would appreciate it!
TIA
Card -- Interest Rate -- Current Balance -- Limit -- % Used -- Age of Account
JC Penney Mastercard -- 26.99% $0 / $2,000.00 -- 0.00% -- 3y1m
Lowes -- 26.99% $0/$7,000.00 -- 0.00% -- 3y2m
Wells Fargo -- 26.74%after 10/2020 -- $1,854.72 / $3,000.00 -- 61.82% -- 4m (opened for BT)
AmEx -- 26.24% after 11/2019 -- $248.08/$3,100.00 (PIF used for phone&internet autopay) -- 8.00% -- 1y10m
Barclaycard -- 19.99% $/$8,000.00 -- 0.00% -- 4y11m
Discover -- 18.49% $0/$20,000.00 -- 0.00% -- 1y11m
Sears Mastercard -- 17.49% $0/$10,000.00 -- 0.00% - 9y2m
Chase 17.24% (but most balance is from 16.24% rate) $14,481.87/$15,500.00 -- 93.43% -- 9y2m
Capital One -- 17.15% -- $0/$5,000.00 -- 0.00% -- 8y10m
Capital One -- 17.15% -- $1,716.74/$2,500.00 -- 68.67% -- 11y4m
Nordstrom -- 14.90% -- $0/$750.00 -- 0.00% -- 6y10m
Bank of America -- 13.49% (1/2 of balance is 0% thru 02/2020) -- $9,861.99/$10,600.00 -- 93.04% -- 11y11m
total credit cards $28,163.40/$87,450.00 -- 32.21%
Lending Club 13.74% -- $14,036.34/$14,400.00 -- 97.47% 3m (60m term)
I use my PFD for that too
ITD, Discover lowered my APR last month (from around 24.99 or something to 18.49). I did have a BT offer, but it is now gone--I presume I'll get another offer after a few bill cycles at the lower rate?
Is it worth the higher APR on a BT to reduce the utilization on the BoA/Chase cards to under the 50% threshold?
Soooooooooooooo here's the rub....I can't afford to pay more right now. But (more below) I just ended a relationship which should free up some money. My single biggest problem is not saying No to others--but I'm getting better!
I make just around $50k/year gross (all sources). I contribute 3% to my 401(k) (that's the max match amount). I have about $17,500 in a State of AK retirement account. I have about $2,000 cash in the bank (like, that I can go into and withdraw right now), and another $6,600 in an online HYS account. The online savings is what's left after I got a chunk from my grandma last fall. I don't know whether to tap this or let it sit there. I mean... I KNOW mathematically it makes more sense to apply it to debt, but I have peace of mind knowing it's there.
I make $1225 bi-weekly after taxes (=$2654.17/month) from my full-time job.
$1095 rent
~$80 electric
~$100 heat
~$80 auto insurance (I usually pay 6-months though with my annual PFD in the fall and tax return in spring)
$160 internet and cell phone
$313.24 Lending Club
$560 credit cards (minimum + $100)
I do not have a car payment.
This leaves me with $245.93 for everything else. Any money I need on top of that comes from hairdressing. I make my own schedule, but only when I have clients. I take clients in evenings and on Saturdays for about a dozen regulars.
My rent is high, but I have a fenced yard for my two dogs, which is super hard to find. I've moved around a LOT since I started college and dread the thought of moving. Not only saving up for a new S/D and first month's rent, but the thought of the moving processes itself--the packing, the cleaning, the hauling, all of it!--makes me want to cry. And I'm not willing to get rid of my dogs.
I recently ended a long-term relationship, in which I was the sole provider. I was paying the rent myself before, so housing costs won't increase with just me (utilities will go down a bit). He didn't work, and I spent more on his gas and groceries than my own, so I should have *some* more money now that we're broken up, which will be nice. I make about $500/month through hairdressing, so usually that money went to us him.
Edit: My boss is drumming up some additional businesses that can lead to me receving commissions ($3-5k deals) in the next year or so... but definitely no guarentees there.... If that comes remotely into fruition I'll sock some away for taxes (it won't be taxed is my understanding in the way it'll be set up) and use the rest for debt.
@annpalmer wrote:I am 31 years old and want to buy a house in the next few years. I'll list my accounts below. I'm employed full time, have a side hustle, and currently rent. I read somewhere I shouldn't open new accounts within a year (?) of planning to get a mortage, but I'm about 4.5 years away from being out of CC debt. I would like to open a new account for a balance transfer on at least my smallest balanced card, but don't know if I should. I recently got a Lending Club loan and paid off my highest interest cards.
I have 4 inquiries and my FICO score hovers right around 700. It was 715-720 before I opened my Wells Fargo credit card and Lending Club accounts this summer.
I'm paying $100 extra a month, avalanche method. I get $1,000 bonus each December from work and since I live in AK, I will get an extra $1,600 this October for the Permanent Fund Dividend check. I usually use my PFD and tax returns to pay 6-months in advance for my car insurance and apply what is left to paying off debt.
I screwed up by letting a friend use a card and never got paid back, but that's only a small portion of my problem. The rest was young, dumbness combined with living off credit cards while not working during college and a during a stint of unemployment.
I feel like I'm on mostly track with my payments (even though its slow-going and at times overwhelming), but I'm trying to think long-term because I would like to be a homeowner soon(ish). I spoke with a mortage broker this spring, who said I need to either cut my debt by 1/3 or make a lot more money to afford a decent, single-family home. I'm OK with waiting, I just would like to find some balance transfers to cut down on interest in the meantime without having too many inquiries/accounts. If anyone has any thoughts around this, I would appreciate it!
TIA
Card -- Interest Rate -- Current Balance -- Limit -- % Used -- Age of Account
JC Penney Mastercard -- 26.99% $0 / $2,000.00 -- 0.00% -- 3y1m
Lowes -- 26.99% $0/$7,000.00 -- 0.00% -- 3y2m
Wells Fargo -- 26.74%after 10/2020 -- $1,854.72 / $3,000.00 -- 61.82% -- 4m (opened for BT)
AmEx -- 26.24% after 11/2019 -- $248.08/$3,100.00 (PIF used for phone&internet autopay) -- 8.00% -- 1y10m
Barclaycard -- 19.99% $/$8,000.00 -- 0.00% -- 4y11m
Discover -- 18.49% $0/$20,000.00 -- 0.00% -- 1y11m
Sears Mastercard -- 17.49% $0/$10,000.00 -- 0.00% - 9y2m
Chase 17.24% (but most balance is from 16.24% rate) $14,481.87/$15,500.00 -- 93.43% -- 9y2m
Capital One -- 17.15% -- $0/$5,000.00 -- 0.00% -- 8y10m
Capital One -- 17.15% -- $1,716.74/$2,500.00 -- 68.67% -- 11y4m
Nordstrom -- 14.90% -- $0/$750.00 -- 0.00% -- 6y10m
Bank of America -- 13.49% (1/2 of balance is 0% thru 02/2020) -- $9,861.99/$10,600.00 -- 93.04% -- 11y11m
total credit cards $28,163.40/$87,450.00 -- 32.21%
Lending Club 13.74% -- $14,036.34/$14,400.00 -- 97.47% 3m (60m term)
IMHO borrowing is not the answer, paying down your revolving debt is the only answer.
I recommend that you use the snowball method.
Any thoughts on using my HYS? As stated above, I like the peace of mind of having it, but I know mathematically it's better to apply it towards debt. I don't have a plan for what that would look like: use it all? pay $500? pay $2500? etc. I have $2000 in the (physical) bank... well, credit union but either way. I'm very secure in my full-time job (it's hairdressing that fluctuates) but not sure how much to keep.
$2500 is my goal for in the bank, as it will be approx. 1 month and I don't have many expenses I can use CCs for if I were to need to (e.g., rent, and current min payments I can't use cards for if I lose my job, but could use cards for internet/cell, gas, electric, and car insurance, along with gas and groceries).
the $6600 online HYS is my hoard lol