Want to make a bigger dent in CC debt, already pay minimum every month

[disneysteve]

What do you suggest instead? I am putting them on hold until I pay off my discover (September).

I suggest you pick up a copy of The Total Money Makeover by Dave Ramsey and try to start working on a plan that addresses the whole picture - the budget, the income, the debt, etc. I'm just afraid that focusing on this piece or that piece isn't going to get you where you need to be.

You said earlier that you think you could be debt-free in 2-3 years, which really isn't so bad, but I think that with some belt-tightening, you could probably do it even faster. You just need a good plan and this is a place where I think Dave Ramsey's plan would be of great assistance to you.

[Gailete]

I would rather put the chunk of cash I have now towards the debt because then I could start my credit score repair ASAP

Agree with Steve. Quit worrying about your credit score!!!! It is neither here nor there and since you have no reason to be trying to get a loan in the next while it doesn't matter what it is. And yes I know that credit scores are used for some things that have nothing to do with loans, but at this point you need to pay off your bills. Quit trying magic plans. I don't know if you are paid weekly or monthly, but if weekly pay some towards those credit cards each week via on line. Discover card I suspect will be much more willing to give you another zero% month if the see your determination to pay the bill off. Paying on a bill weekly, means that each bit that is paid off has had less of a chance to collect or have interest charged against it. It may not seem like much but can add up over time.

I am concerned about the 'fine print' of these zero interest cards. What happens if you miss a payment or they withdraw an automatic payment and the money isn't in your account? Will all the months interest that deferred be dumped back on your card immediately? In other words, you miss a payment somehow and suddenly you are responsible for a 30% interest charge and they have slammed the fee onto your card already which could be hundreds of dollars. Those zero interest things are tricky. A co-worker bought a couch on a zero interest for a year. Apparently she either didn't pay on it or didn't pay enough to pay it off and found that a year after buying it (and the newness of the couch itself had worn off) she stilled owed exactly what she had bought it for! Everything she had paid prior to the end of the grace year just ended up being interest since it wasn't paid off on time. I advise great caution here and as the others have said, pay as much as you can during this time period. Will your interest rate go back to normal when the zero rate is over? If so pay as much as possible to take advantage of it.

Keep making payments on those school loans as well. I haven't had to deal with school loans in a very long time, so if they can't be discharged in bankruptcy, you certain don't want them outstanding either and growing by the month while in 'forbearance'. You could find out that after all is said and done you then owe more on your student loans than what your whole bill mess has been. Even if you can't pay the whole payment, pay some. As I mentioned before about your hospital bill. Those you owe money to will take your efforts more seriously and work with you as they see you trying little by little to shovel yourself out.

In the meantime some nice fairly free or cheap things to pamper yourself.
-a hot soak in the tub (sorry we had snow today )
-check out an interesting book in the library
-go cruise Pinterest and find the frugal boards and see all the great ideas
-go to Pinterest and find the boards on recycling clothes--lots of great ideas with thrift store recycled items. Since you have no money for clothes now, organize a fashion swap with friends where you all contribute clothes and accessories you are tired of and let them go home to a different home.
-you live in a city with all sorts of entertainment. Find the free stuff!

[Tree0164]

I have to agree with the others-don't worry about your credit score right now-just focus on getting out of debt. Get the Dave Ramsey book Total Money Makeoverand start on that plan.

Did you get the tutoring 2nd job? With an engineering degree you can probably tutor in mat h and science

Good luck

[Petunia 100]

Well, I think that putting the student loans in forbearance so she can knock out her credit card debt is a good plan. When I read her OP, I see someone who is drowning in debt. She can barely make ends meet. Yes, it means her student loan balances will increase. Still, I think when you look at the entire picture, it makes sense. The key is that the credit card debt needs to be decreasing at a faster rate than the student loan debt is increasing.

So Batgirl, if you go through with your plan, that should be your focus. The credit card debt needs to be decreasing much more than the student loan debt is increasing. If you spend the extra money instead, you will end up in a worse position than now.

[reedda]

Well, I think that putting the student loans in forbearance so she can knock out her credit card debt is a good plan. When I read her OP, I see someone who is drowning in debt. She can barely make ends meet.

I have to agree here too. If there's not enough income to go around, tough choices need to be made. Batgirl needs to free up some cash, and this is a way to put more money towards the CC debt in the short term. Once those are paid off, all those payments can be put towards the student loans.

I wouldn't save up a large payment though. Just start throwing all you can at the debt while it's 0% interest. Once the interest rate kicks in, it will apply to the remaining balance (right?), so get the balances down as much as possible.

[jcmf339]

I opened the chase with the intention of doing a balance transfer but the limit was $500 so I could only transfer that much.

This budget is for me only. I live in NYC which is why everything is so expensive. I stopped dining out except for special occasions (which maybe happens once a month or once every two months) and I make sure not to get any drinks. I could cut that out but it would only save maybe $50 bucks every month or two. I also stopped going out with my friends which has taken a huge toll on my social life but I needed to save money. Also, the groceries include food/litter for my cat, lol.

I don't think the 20% of your income to rent can apply here unless you make a huge salary. I already live with multiple roommates. T[B]here is no way I'd be able to find a place here for $600-$700/month for rent. The best I could hope for is $1000 but that is only if I am very lucky and find a deal like that. [/B]Most of the good 'deals' are with leasing brokers and they also charge huge upfront fees (typically one months rent) so in the end I may not even save that much over a year lease.

Not sure what I could do for a second job. I work about 50-60 hours per week at my current job. If you have suggestions I'm definitely open to looking into them. Probably would have to be a weekend only job since I work M-F.

I'm not really concerned about my student loans. Just my credit card debt. I am ok with paying the minimum on my student loans for now.

At this point, I am looking for ways I can reduce my actual debt or interest fees on the CCs. I am looking for a new job with higher pay but no guarantees on that.

This is totally wrong. I live in NYC too- I've lived in 2 apartments in Washington Heights for rent under $700 a month. (612 and 634). WIth utilities and cable, less than or around $700. Current one is not super nice, but does the job. The first was nicer, had in building laundry- both have elevators- both clean and safe (and 1 block from one train line, 4 blocks from another- so not out of the way or inaccessible).

It is an absolute joke that you think you "need" to pay $1200 to live in NYC. You can pay less than $1,000 easily, but probably not living by yourself- I think you said you have roommates. So do I, with the prices I listed- but you do not need to pay what you do. Break your lease if you need to. Move. You can't afford it.

[jcmf339]

My lease ends in October. Also, just because I move out of NYC doesn't mean I'll have income in my new location (don't have a new job secured). I do have a secure, stable job here and I would be quitting my job to move.

What if you lived in Jersey City? I know I just posted about getting cheaper housing in the city-- but you do have options.

[alternativegirl]

Debt Settlement

I am going through debt settlement now and it's working for me.

Hello,...At this point, I am looking for ways I can reduce my actual debt or interest fees on the CCs. I am looking for a new job with higher pay but no guarantees on that.

[alternativegirl]

struggling with debt that can be lowered

The 22% is high. Maybe they will reduce the 10.90 and 13.99 if you phone and ask. If you are still struggling in October (or before) I'd look into debt settlement. It's freeing up my life.

Credit card details:
-9000 Visa card with 10.90% APR
-11000 Discover card with 13.99% APR
-500 Chase card with 0% introductory APR but will go to 22% after October 2013

.

[karenjcarlson]

what about credit counseling?

You could try credit counseling. If you qualify for a nonprofit credit counseling debt management program, you could see your interest rates seriously reduced - helping you pay off your debt faster. Go for a company with a perfect BBB rating.

[alternativegirl]

Personally although the credit card counseling debt management offer seemed better than paying off my entire debt monthly that really wasn't enough. it was going to be four years of higher payments than I could afford. So, I went with a debt settlement company and glad I did. Also, I have heard this from more than one person that the credit card companies own the credit counseling organizations.

You could try credit counseling. If you qualify for a nonprofit credit counseling debt management program, you could see your interest rates seriously reduced - helping you pay off your debt faster. Go for a company with a perfect BBB rating.

[TheKayla]

Moving the debt to a personal loan if it's at 5-6% would not necessarily be a bad idea, if you can get qualified with your current situation, and as long as it's when a reputable company. Be sure to do your research if you go that route.

However, the biggest thing you'll be able to do is increase your income. If you're not interested in switching jobs, or are not qualified for any sort of raise, try doing something on the side to increase your income -- first sell any stuff you can, downgrade your housing expenses, save money on groceries, etc. You've already stopped the the habit of spending beyond your means, but now it's time to learn to live more frugally.

Also try to take on some side income -- maybe you can do some freelancing online (do you have any special skill sets? Writing? Designing? Consulting? Blogging?) It will take a lot of extra work, but it's worth it. You can also consider getting a side job, or starting your own side business with something you'd prefer to do -- babysitting, dog walking, lawn care, house cleaning, etc.

Best of luck to you! I currently have the same goals, to make bigger dents in my debt each month, but with student loans instead.