Consolidation Loan

[SacredFaerie]

I'm really really thinking about on. I have about $850 on a Capital One cc and I owe about $200 to my school. My main concern is the high rate that I'm racking up interest on the Capital One cc.


Thoughts?

[disneysteve]

How's your credit? Could you get a new CC with a lower rate, perhaps a 0% deal, and transfer the Capital One balance.

You've posted bits and pieces about your situation but it would help us give better advice if you gave us the big picture. Post your income and expenses and we can give specific advice rather than just general suggestions that may or may not apply to you.

Without knowing any more, for example, my first thought is, "What's the big deal about an $850 CC bill?" because in my world, that's a non-issue. My credit card bills last month were over $4,400 and were paid in full, as they are every month. Clearly, to you, the $850 amount represents a challenge, so we need to see the numbers to know what kind of advice to give and how best to direct you.

[SacredFaerie]

My income tends to fluctuate because my employer is a bit of a jerk (long story) but generally I bring in from 650- 800 a month.

I have the $850 on the Capital One CC. The minimum payment is $24 but the APR is 23.90% and there's an overlimit fee of $29 a month (limit is $500) and a Payment Protection Fee of $7.94. So paying the minimum is NOT an option. Even if I put $50 on it a month the balance comes out $3 higher than it was before.

I have a Navy Federal card with a limit of $1000 but the payment on that is generally 21.00 a month and I tend to put $42 a month on it. It's an emergency card with a good rate and I'm not worried about it.

I have a car loan with Navy Federal that has a payment of $160.36 a month.

I have a monthly school payment of $47.

Gas generally runs me about $160 a month.

My boyfriend handles the cable and the electricity is $98 a month. We split the rent ($1060 a month) about 60/40 right now. So I'm responsible for about $350-$400 of that. (Depending on how my paycheck runs and what I can cover.)

[nitemarecooper]

Line of Credit

I'm really really thinking about on. I have about $850 on a Capital One cc and I owe about $200 to my school. My main concern is the high rate that I'm racking up interest on the Capital One cc.


Thoughts?

Another possibility that is worth considering is a Line of Credit. If you could get approved for another credit card, then perhaps you can get approved for a line of credit at your bank instead. Assuming you get approved, they are normally below 10% so that would lower your costs dramatically and help you pay it off faster. Then after you transfer the balance to the Line of Credit, cancel your credit card. Consider yourself lucky though at only about $1000 credit card debt though. My only credit card is a no annual fee Line of Credit Visa (combination of a Line of Credit and regular visa card) and has a balance of about $14,500 at about 5.4% as the regular rate for the card (that is not a low interest time limited rate or anything). The rest of my debt combined brings the total debt to roughly triple that amount.

Low pay is definitely a big problem for you though so good luck trying to cure that but give some extra thought to boosting your budget (second job or different job). That, naturally, depends on individual situation so if it is possible to do something along those lines, then consider it for now even if is not a job you want in the short run. A higher pay will go a long way to pay off your credit and car. (as any idiot already knows, lol)

Nitemarecooper

[SacredFaerie]

Another possibility that is worth considering is a Line of Credit. If you could get approved for another credit card, then perhaps you can get approved for a line of credit at your bank instead. Assuming you get approved, they are normally below 10% so that would lower your costs dramatically and help you pay it off faster. Then after you transfer the balance to the Line of Credit, cancel your credit card. Consider yourself lucky though at only about $1000 credit card debt though. My only credit card is a no annual fee Line of Credit Visa (combination of a Line of Credit and regular visa card) and has a balance of about $14,500 at about 5.4% as the regular rate for the card (that is not a low interest time limited rate or anything). The rest of my debt combined brings the total debt to roughly triple that amount.

Low pay is definitely a big problem for you though so good luck trying to cure that but give some extra thought to boosting your budget (second job or different job). That, naturally, depends on individual situation so if it is possible to do something along those lines, then consider it for now even if is not a job you want in the short run. A higher pay will go a long way to pay off your credit and car. (as any idiot already knows, lol)

Nitemarecooper

I like taking care of people and that's sort of what I do now. (I'm a Personal Care Attendant.) Some states offer consumer directed care and that's what I do. (Consumers directly hire instead of working with an agency and being assigned an aide that works with the agency.) Unfortunately the consumer I work with isn't the best person. He consistently tries to get over on everyone and anytime I flat out refuse to help him lie or fraud someone or something, he cuts my hours. I remember the very first time, we went to a local store and he screamed at the cashier because he didn't have the correct amount of money. I told his wife about it because it wasn't the first time it'd happen and next thing I know I have 3 days out of my week off. I've been trying to get another job for quite sometime but I wanted to make sure I didn't take a step backwards financially. Currently I have a job with Liberty Tax Services working as a Online Customer Service Representative. Accounting in general isn't something I'm passionate about and the job is up in April but I'm still helping people and it pays really well so I'm hoping to get ahead on some bills and I'm trying to remain optimistic.

I'm in school but I've been caught in a trap a lot of my HS classmates are facing. Our educations and other expenses far outweigh our incomes but we don't have the skills to get jobs that pay higher. 3 of my good friends have had to come home from school and take time off because they simply couldn't afford it.

The interesting thing is that kids who were pushed to do work studies or go to vocational school in the afternoon are the ones that if they went to college are actually staying. A friend of mine that did cosmetology goes to the Art Institute of Philadelphia for fashion. AI costs a VERY pretty penny but she got a loan here and a grant there and she makes good money doing hair. She has no plans of coming home from school anytime soon.

[disneysteve]

I bring in from 650- 800 a month.

I have the $850 on the Capital One CC. The minimum payment is $24 but the APR is 23.90% and there's an overlimit fee of $29 a month (limit is $500) and a Payment Protection Fee of $7.94.

I have a Navy Federal card with a limit of $1000 but the payment on that is generally 21.00 a month and I tend to put $42 a month on it. It's an emergency card with a good rate and I'm not worried about it.

I have a car loan with Navy Federal that has a payment of $160.36 a month.

I have a monthly school payment of $47.

Gas generally runs me about $160 a month.

My boyfriend handles the cable and the electricity is $98 a month. We split the rent ($1060 a month) about 60/40 right now. So I'm responsible for about $350-$400 of that. (Depending on how my paycheck runs and what I can cover.)

Your numbers don't add up.
Gas $160
School $47
Car $160
Navy Fed card $42
Capital One card $55
Rent $400
--------------------------
Total $864

That's at least $64/mo. and as much as $214/mo. more than you earn. You need to drastically slash expenses and/or really boost your income. You're living a lifestyle that you absolutely can not afford.

You can't afford your share of where you are living. $400 is over 61% of your base income of $650. There is simply no way you can continue to survive that way. You need to move to a much cheaper place. Is living with family an option for you?

What you are spending on gas is insane: 25% of income. If all of that mileage is job-related, do you get reimbursed for it or does it all come out of your pocket?

Cancel the payment protection on the CC. It's only $8/month but why throw money away like that.

Suggest to your boyfriend that you cancel cable and he puts that money toward the rent to reduce your share. That will help a little.

There's no easy answer here. Your income is too low and your expenses are way too high. You need to raise income and slash expenses. Raising income is easier said than done, so I'd focus on the expense side. I'd focus on the rent problem first because that's burying you. You need to take some drastic measures fast.

Good luck.

[SacredFaerie]

Your numbers don't add up.
Gas $160
School $47
Car $160
Navy Fed card $42
Capital One card $55
Rent $400
--------------------------
Total $864

That's at least $64/mo. and as much as $214/mo. more than you earn. You need to drastically slash expenses and/or really boost your income. You're living a lifestyle that you absolutely can not afford.

You can't afford your share of where you are living. $400 is over 61% of your base income of $650. There is simply no way you can continue to survive that way. You need to move to a much cheaper place. Is living with family an option for you?

What you are spending on gas is insane: 25% of income. If all of that mileage is job-related, do you get reimbursed for it or does it all come out of your pocket?

Cancel the payment protection on the CC. It's only $8/month but why throw money away like that.

Suggest to your boyfriend that you cancel cable and he puts that money toward the rent to reduce your share. That will help a little.

There's no easy answer here. Your income is too low and your expenses are way too high. You need to raise income and slash expenses. Raising income is easier said than done, so I'd focus on the expense side. I'd focus on the rent problem first because that's burying you. You need to take some drastic measures fast.

Good luck.

No offense but....no sh*t. I know that. And I know how I got here. All I can do it work to eliminate a bill and raise my income. I have a higher paying job closer to home that starts on the 5th.

He pays for the cable because he wants it. I could talk to him and see what he says. Getting rid of the internet isn't an option because I go to school online. (My gas actually used to be higher but I switched schools and now go solely online.) I work 30 minutes (16.75 miles) away from where I live and I work about 5 days a week. (Sometimes more, sometimes less.) Most of the mileage is on the interstate and my car is a 2001 Eclipse. (Uses premium gas....another not wise purchase right out of HS. And before you say it public transportation in my area isn't reliable; selling the car is not an option.)

Living with my family is not an option. I've moved out. My mother is basically of the mind that her house does not have a revolving door on it. (Which makes sense.) Besides everytime I get into trouble (hopefully this is the only time I'll crash and burn so badly) I can't move home.

Capital One made it seem like they were going to charge me several additional fees if I canceled the payment protection. (I asked twice.) I'll call them again tomorrow and see what they say.)

Believe it or not everyone I can add. I put out more than I take in. I'm working on fixing that. Right now every little bit goes to that cc because if I make a $50 payment on it, after finance charges and fees the balance is $3 more than when I started. Which is why I asked about the consolidation loan. I'm looking for a low interest way of paying off that debt so I can get out from under it and so it can quit increasing. If I can improve my credit score even in the slightest, I might be able to (after I sell it and pay off the current loan) get a loan for a more economical car.

Can anyone either explain the line of credit thing that was mentioned (not entirely certain about it) or answer my actual question?

[nitemarecooper]

Can anyone either explain the line of credit thing that was mentioned (not entirely certain about it) or answer my actual question?

I don't know what the interest rate charged by the Capital One card is, but the only answer to high interest rate card is to find something else with a lower rate and then transfer the debt. Perhaps Capital One may have a low interest version of the card that they can convert your card into. Banks here in Canada always do have low interest version that, provided you haven't missed any payments, they are always are willing to convert you to. They just never volunteer that suggestion as a way to lower your interest that you pay. Another idea is just applying for another card with a low interest balance transfer option. Thirdly, banks are also sometimes willing to lower your interest rate if you threaten to cancel the card and not use it anymore. Call them and give them that threat and see if you can get them to lower the rate. It worked for me the only time I ever tried it myself.

They only other idea is the Line of Credit. The Line of Credit is a debt line that the customer is free to cash advance on with no cash advance fees. It is simply an account, no card associated with it and cannot be used to make on the spot purchases anywhere (think similar to a loan, something similar). The most common Line of Credit is a Home Equity Line of Credit or HELOC (people often refer to it simply as a second mortgage), however as you don't own a home, that is no possible. Banks here in Canada always offer unsecured Lines of Credit to customers like you and me that don't own a home. The interest rate is usually higher (probably 7-10% range) as opposed to prime rate for a secured one). Check with not just your bank, but others as well and ask them about applying for an 'Unsecured Line of Credit' and see. Looks like you only need $1000 or so and then if you get approved just transfer the balance to the lower interest rate and cancel your card and then there will be nothing else possible to do after that.

Nitemarecooper

[disneysteve]

OP, no offense intended. I'm sure you can add as well as I can. Sometimes, though, I find that the question being asked isn't really the one that needs to be answered.

As for your question about debt consolidation, though, the first question I asked was, "How's your credit?"

If your FICO is good, you can probably get a lower interest rate either by getting a new CC and transferring the balance or taking out some type of personal loan. You may also want to look into borrowing through Prosper.com. I suspect that being over the limit on the Capital One card hasn't done good things to your credit, so that may pose a problem.

How much more will you earn once you start the new job next week?

[SacredFaerie]

I make 8.60 now and I'd be making 10.50 starting on the 5th of January. My commute will also be cut in half.

I really think if I can get a lower interest on that credit card debt and then get a more economical car (the gas and repair costs on my Eclipse are killing me) that I could turn things around.

Which credit reporting agency would give me my FICO? Do I have to pay?

[disneysteve]

I make 8.60 now and I'd be making 10.50 starting on the 5th of January. My commute will also be cut in half.

Which credit reporting agency would give me my FICO? Do I have to pay?

That raise will definitely help as will cutting the gas costs roughly in half. That will give you some breathing room and allow you to send extra to Capital One each month and actually start knocking that out.

You can order your FICO from myfico.com. You do have to pay for it. If you google "fico code" you should be able to find a discount code to get it a little cheaper.

[kork13]

Which credit reporting agency would give me my FICO? Do I have to pay?

Any of the three national credit bureaus will give you a FICO score. If you do this, however, I would go straight to their official websites--don't get trapped by other websites offering 'free' credit scores. Generally, you're either given a non-FICO score (not calculated by the FICO standards, and mostly unreliable), or you're required to sign up for some sort of contract/program thing that will only cost you more in the end.

You will have to buy your score from the credit bureaus (I think it's like $10-$15), but it's generally worth spending the few bucks for. Also keep in mind that each one of the three (Experian, Equifax, TransUnion) will sometimes be slightly different, because sometimes a company only reports to one or two of the 3 bureaus. However, all three will be generally similar, and reliable estimates of what your creditors are looking at.

[SacredFaerie]

What my boyfriend and I were talking about is sinking both of our tax returns into the Capital One debt.

I feel bad about that though because I know he could use it on his CC or his car loan or do something nice for his kids.

[disneysteve]

What my boyfriend and I were talking about is sinking both of our tax returns into the Capital One debt.

I feel bad about that though because I know he could use it on his CC or his car loan or do something nice for his kids.

SF, it would be really helpful if you could spell out the whole picture for us because just when I think I understand the situation, you mention something else that would alter my advice.

How much do you earn currently?
How much will you earn when the new job starts?
How much does your boyfriend earn?
List all of your expenses (both of you, not just you alone).
List all of your debts (again, both of you, not just you) including outstanding balances and interest rates. Also, how long is left on each of the car loans?

Do either of you have any idea of how much of a tax refund you will be getting? If it is more than a couple hundred dollars, make sure you change your withholding to have less taken out in 2009 so you have that money in your check each week rather than lending it to Uncle Sam all year for zero interest.

[SacredFaerie]

SF, it would be really helpful if you could spell out the whole picture for us because just when I think I understand the situation, you mention something else that would alter my advice.

How much do you earn currently?
How much will you earn when the new job starts?
How much does your boyfriend earn?
List all of your expenses (both of you, not just you alone).
List all of your debts (again, both of you, not just you) including outstanding balances and interest rates. Also, how long is left on each of the car loans?

Do either of you have any idea of how much of a tax refund you will be getting? If it is more than a couple hundred dollars, make sure you change your withholding to have less taken out in 2009 so you have that money in your check each week rather than lending it to Uncle Sam all year for zero interest.

1. 8.60 an hour which ends up 380-450 a month. (He's been cutting my hours lately.)
2. 10.50 an hour and I haven't figured what that equals out to after taxes.
3. He gets about 1,100 every two weeks (I haven't checked his LES lately). Child support is removed before his check is deposited in his account. He also has a portion removed before his check is deposited that goes to his kids' college funds.
4. 160.36/car pymt, 47/school, 1060/rent, 105/cable, 98/electric, 120/gas, his car payment is somewhere around 400 a month and his insurance is about 300. I have no clue what he spends on gas but his car takes premium as well.
5. He has a credit card with a 6,000 limit that's not maxed out but somewhat close. I have $839 on a Capital One card.

I got about 400 dollars last year on my return. I don't know what he got because he was deployed last year during tax season.

I will collect interest rates and edit this post. My bank's website is acting a little wonky right now.