My plan to be debt free

[Radiance]

This is my current debt, in the order I want to pay them off, I am doing it by balance

Amex
Balance: $542
Interest: 27.24%
Available balance: $1600
Monthly interest fees: $15
Annual Fee: None
Monhtly minimum: $15

Visa
Balance: $2800
Interest: 12.99%
Available balance: $4200
Monthly interest fees: $31
Annual Fee: None
Monthly minimum: $50

Personal, non revolving loan
Balance: $5890
Interest: 16.45%
Monthly payment 360, out of which 85 is interest, 275 goes to principal
Monthly interest fees: 85


Car loan
Balance: $9410
Interest: 5.95%
Monthly payment 297, out of which 49 is interest, 248 goes to principal
Monthly interest fees: 49 ---> corrected

Paid for accounts

Care Credit
$5000 available credit @ 23% (only for health services)
Annual Fee: None

Master card
$1000 available credit @ 24%
Annual Fee:19

I think that is the correct sequence for paying them off.
Now, which cards would you keep after all is said and done.

I think I will cancel the Master card since it was an annual fee
What do you think?

[maat55]

I would not use any of them until they are all paid off. If you cannot use one of them without paying in full each month, you should put them in the drawer or even cut them up.

Yes, get rid of the MC. The rest can sit idle or close them as you wish.

I have two idle cards and one I use and PIF. My credit score is fine just doing what I feel comfortable doing.

[Lindahfx]

Originally Posted by Radiance

This is my current debt, in the order I want to pay them off, I am doing it by balance

Amex
Balance: $542
Interest: 27.24%
Available balance: $1600
Monthly interest fees: $15
Annual Fee: None

Visa
Balance: $2800
Interest: 12.99%
Available balance: $4200
Monthly interest fees: $31
Annual Fee: None

Personal, non revolving loan
Balance: $5890
Interest: 16.45%
Monthly payment 360, out of which 85 is interest, 275 goes to principal
Monthly interest fees: 85


Car loan
Balance: $9410
Interest: 5.95%
Monthly payment 297, out of which 49 is interest, 248 goes to principal
Monthly interest fees: 85

Paid for accounts

Care Credit
$5000 available credit @ 23% (only for health services)
Annual Fee: None

Master card
$1000 available credit @ 24%
Annual Fee:19

I think that is the correct sequence for paying them off.
Now, which cards would you keep after all is said and done.

I think I will cancel the Master card since it was an annual fee
What do you think?

How much do you have to pay on your debts every month?

Once you either pay off the AMEX or when you have enough available credit on your Visa, I would think about paying off your personal, non-revolving loan with your Visa at 12.99% so that you reduce your interest payments. It would probably also reduce your overall minimum monthly payments so more could go to principle.

[disneysteve]

Why the Visa before the personal loan? I'd do highest interest first.

Does the MC annual fee get you anything? Any perks? If not, cancel it.

[cptacek]

Originally Posted by Radiance

Car loan
Balance: $9410
Interest: 5.95%
Monthly payment 297, out of which 49 is interest, 248 goes to principal
Monthly interest fees: 85

How do you pay $49 of $297 in interest, yet pay $85 a month on interest?

[Radiance]

Steve,
I think I want to do the Visa first because of the psicological effect of having less accounts sooner. Also milestone wise I will be able to say "I am credit card debt free" sooner. Gosh, I know it sounds silly, but I think it will make the ride more enjoyable. Do you think that is an expensive approach?

MC is going away, no perks and I just recall their customer services sucks.

cptacek, good catch. my mistake, fees for the car loan is 49 and decreasing each month.

[Radiance]

The minimum on the Amex is $15
The minimum on the Visa is $50
Loan payment $360
Car payment $297

Originally Posted by Lindahfx

Once you either pay off the AMEX or when you have enough available credit on your Visa, I would think about paying off your personal, non-revolving loan with your Visa at 12.99% so that you reduce your interest payments. It would probably also reduce your overall minimum monthly payments so more could go to principle.

That is an interesting approach! I wander how much money does it save.
(I did confirm I have no pre pay penalty on any of my debt)

[nmboone]

You've come a long way already! Good luck with your debt-free journey, it seems that with everything laid out you'll be out of debt in no time!

[disneysteve]

Originally Posted by nmboone

it seems that with everything laid out you'll be out of debt in no time!

I agree. Any reasonable plan will get you to your goal. Whether you do highest interest first or largest balance first, the most important thing is that you are making substantial payments, not taking on any new debt and living well below your means.

[Radiance]

An update
Just called Master Card to close up because they have an annual fee.
The rep was in shock that was the reason I was closing... it felt good.

[LuxLiving]

Radiance, it sounds as if you are rocking along on your plan!

[paymydebt]

Originally Posted by Radiance

An update
Just called Master Card to close up because they have an annual fee.
The rep was in shock that was the reason I was closing... it felt good.

They must have been in deep shock, otherwise they should be bending over backwards to convince you not to. That's good you closed it...one less opportunity for getting into debt.

[Radiance]

Another update, Amex is paid off!
Three more to go!

This is my current debt, in the order I want to pay them off, I am doing it by balance

Visa
Balance: $2800
Interest: 12.99%
Available balance: $4200
Monthly interest fees: $31
Annual Fee: None
Monthly minimum: $50

Personal, non revolving loan
Balance: $5336
Interest: 16.45%
Monthly payment 360, out of which 85 is interest, 275 goes to principal
Monthly interest fees: 85

Car loan
Balance: $8915
Interest: 5.95%
Monthly payment 297, out of which 49 is interest, 248 goes to principal
Monthly interest fees: 49

Paid for accounts

Care Credit
$5000 available credit @ 23% (only for health services)
Annual Fee: None

Amex
Available balance: $2000 available credit @ 27.24%
Annual Fee: None

Those interests are ridiculous, keeping for now in case of a world crisis emergency or something.
When my credit recovers I plan to get better ones to replace those.
More recently, my debit card pays rewards, so I am even less motivated to ever use credit cards, even if it is to pay in full monthly. They will become a piece of plastic using space in some drawer. no?

[disneysteve]

Originally Posted by Radiance

Those interests are ridiculous, keeping for now in case of a world crisis emergency or something.
When my credit recovers I plan to get better ones to replace those.

There is no reason to replace them. The interest rate is absolutely irrelevant because you will NEVER AGAIN use a credit card to make a purchase that you can't afford to pay for IN FULL when the bill comes.

I have no idea what the rates are on my credit cards and I use a CC almost daily for something. We charged over $40,000 to our cards last year but every bill was paid in full each month so I couldn't care less what the interest rate is. It could be 300% and it wouldn't bother me a bit.

[creditcardfree]

Originally Posted by Radiance

Another update, Amex is paid off!
Three more to go!

Yipee! Congratulations. Keep up the excellent work.

[Radiance]

I think that until I have a decent EF, life can come with a curve ball and force me to use credit, so it would be nice to have fast access to low or decent interest money. Mainly thinking about medical emergencies, nothing else comes to mind.

Well, you never now, let;s say you need to bail an innocent family member from jail. Or maybe someone sue you and need to pay lawyers.

I'd better stop or I will scare myself.

The point is, until I have a decent EF, I would like to have low interest credit available, makes sense?

[davecc]

I will be debt free by 2011, paying off my car, care debt and other stuff! never missed a payment woohoo!

[Radiance]

2011, that is right around the corner, so exciting! You go!

[connor_zen]

Totally agree:

- Don't use any of the cards anymore
- Whittle down the manageable ones first to get them out of the way

Also, one note: if I remember correctly, canceling a credit card will NEGATIVELY affect your credit score. Once you're down to $0 debt, you might want to just put the cards in a drawer and never use them.

[LMA]

Radiance, I would close the cards in which you owe the balance. I believe they will let you do that and then you would work on paying them off. Then keep the master card as your one and only credit card, no need to have more than one.