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

[batgirl]

Thanks everyone for your replies. I am only spending cash right now and I was able to borrow some money from my sister to get my discover balance below the minimum. I just put $500 (min) towards the visa (lowest interest rate), $85 towards slate (so I can pay it all off before the 0% apr expires) and $300 towards the discover (after reducing my spending again and doing a focus group study) for the month of May.

I had a couple interviews for new and second jobs but nothing has gone through yet. Still looking.

[dunnrobert700]

You have my sympathy, you're budget for someone living in NYC is hardly extravagant, but here's the hard news...paying the minimum on a CC is NOT OK.

It is carefully calculated to absolutely milk you for all of the interest they can possibly get. It will take you forever to pay it down. Even if you make extreme personal sacrifices in the next couple of years you will be vastly better off (have more money for what you want) in the long run if you make this your top financial priority. Get a roommate. Live on noodles. Whatever it takes...temporarily. You need to be free.

[batgirl]

You have my sympathy, you're budget for someone living in NYC is hardly extravagant, but here's the hard news...paying the minimum on a CC is NOT OK.

It is carefully calculated to absolutely milk you for all of the interest they can possibly get. It will take you forever to pay it down. Even if you make extreme personal sacrifices in the next couple of years you will be vastly better off (have more money for what you want) in the long run if you make this your top financial priority. Get a roommate. Live on noodles. Whatever it takes...temporarily. You need to be free.

I feel trapped. I've been living this 'new' lifestyle for the past several months and it isn't looking up at all. I already live with roommates. I know it is only 'temporary' but I seriously don't know if I could do this for 2-3 years (approximate time it would take to pay off my debt at the rate I'm going). My health has already been negatively affected (hair started falling out, lost a ton of weight, skin is going nuts, can't sleep anymore).

[LivingAlmostLarge]

You say your health is suffering and you have 2-3 years of possible struggle to pay off your debt. But earlier in the thread you said you were giving it to october to not move out of NYC.

Repeat - you cannot afford to live in NYC. You need to move to get out of debt and get ahead. You don't make enough and might never make enough to get ahead. You will be constantly on the hamster wheel trying.

[batgirl]

You say your health is suffering and you have 2-3 years of possible struggle to pay off your debt. But earlier in the thread you said you were giving it to october to not move out of NYC.

Repeat - you cannot afford to live in NYC. You need to move to get out of debt and get ahead. You don't make enough and might never make enough to get ahead. You will be constantly on the hamster wheel trying.

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.

[disneysteve]

I feel trapped. I've been living this 'new' lifestyle for the past several months and it isn't looking up at all. I already live with roommates. I know it is only 'temporary' but I seriously don't know if I could do this for 2-3 years (approximate time it would take to pay off my debt at the rate I'm going).

You posted your budget earlier and there were definitely things that could be trimmed or cut. If you want to get out of debt faster, you need to get to a bare bones budget. It isn't forever. If you can be debt free in 2-3 years at your current rate, you can probably be debt free in 1-2 years if you really cut down to the basics. I'm not suggesting that will be fun or easy but short term pain for long term gain.

Pick up a copy of The Total Money Makeover by Dave Ramsey. Read that and see if it changes your outlook and mindset.

[Gailete]

Pick up a copy of The Total Money Makeover by Dave Ramsey. Read that and see if it changes your outlook and mindset.

And since you can't afford to buy it, check it out at the library or go to his website and learn what you can there. He has a wealth of information and just so you know at one point he was in worse debt than you were.

I know that you feel that your health is suffering due to your bills, but let me tell you, not doing what needs to be done to pay them off will only make you feel worse. Those bills were easy to make and now you are finding them extremely hard to pay off. Going through this will be a life lesson you should never forget every time you are tempted to pull out a credit card. The world won't stop if Discover closes your account like you mentioned in another post. Who cares. You shouldn't be charging anyway so what difference does it make? Same with your credit score. It will heal on its own as your finances improve over time, but in the meantime you won't be taking out a loan so no need to worry about it.

[batgirl]

Hi everyone, thanks for all the support and helpful advice. Here's an update to my situation:

I closed the Visa account with a hardship program for 0% APR and min payments of $200 for 12 months. Anyone know how much of a hit this will have to my credit score? It's 670-680 right now (just checked).

Discover let me have 2 months of 0% APR. They said if I called back again in 2 months and still am in the same situation, they would give me a 3rd month for 0% APR. Same minimum payments. No penalties. Will continue trying to convince them to let me extend it every month.

Chase card is still the same - didn't bother talking to them. 0% APR expires in October.

I also put all my student loans on 'forbearance.' I figured the payments could be going towards credit cards since student loan bills are at 6.8% or less.

My plan is to continue increasing my income/decreasing my spending. I will continue paying the minimum on all the cards until the 0% APR is over, and hoard all the cash in the meantime. When the 0% APR expires, I will put down whatever cash I have as a big payment on the chase card first, then the discover, then the visa.

Hopefully in around 6 months from now, when I have decreased the balances significantly, I will apply for a balance transfer card and transfer the balance on the discover card. I don't think I can with the visa because the account is closed. If this goes through, I will pay the min payment on the new balance transfer card and make the biggest payments I can on the visa.

Thanks again to everyone.

[disneysteve]

I will continue paying the minimum on all the cards until the 0% APR is over, and hoard all the cash in the meantime.

Why?

What's the point of hoarding cash when you have all of that debt? You should be putting every penny you can toward the debt. I don't care if it is 0%. Pay the minimum on every card except the card that has the 0% deal expire first. Put all extra money toward that one. Once that is paid off, move to focusing on the next one where the 0% will expire. Don't wait until the 0% period is ending to get your payment in. Miss it by one day and you're screwed.

[batgirl]

Why?

What's the point of hoarding cash when you have all of that debt? You should be putting every penny you can toward the debt. I don't care if it is 0%. Pay the minimum on every card except the card that has the 0% deal expire first. Put all extra money toward that one. Once that is paid off, move to focusing on the next one where the 0% will expire. Don't wait until the 0% period is ending to get your payment in. Miss it by one day and you're screwed.

I signed up for automatic minimum payments already.

I would rather put the chunk of cash I have now towards the debt because then I could start my credit score repair ASAP, but Discover said I could get a 3rd month of 0% APR if I called again in 2 months. If I put down a huge payment now, they might not grant me the 0% APR for the 3rd month because they gave me the 0% APR as a courtesy since I told them I was struggling financially.

[disneysteve]

I signed up for automatic minimum payments already.

I would rather put the chunk of cash I have now towards the debt because then I could start my credit score repair ASAP, but Discover said I could get a 3rd month of 0% APR if I called again in 2 months. If I put down a huge payment now, they might not grant me the 0% APR for the 3rd month because they gave me the 0% APR as a courtesy since I told them I was struggling financially.

1. Stop worrying about your credit score and start worrying about getting out of debt.
2. Stop playing with rates and special deals and start focusing on getting out of debt.
3. Stop delaying repayments in order to qualify for special deals that let you stay in debt even longer.

You can't borrow your way out of debt. It doesn't matter if the interest rate is 0% or 30%. The only way to get rid of debt is to pay it off. Put every spare penny you can scratch up toward the debt. If that means that 2 months from now, you lose the advantage of 0% interest, big deal. It will be because you don't have as much debt and aren't struggling so much. That's a good thing if that happens. Don't keep the debt just so you can continue to keep the debt.

[Baby_nurse]

Why on earth are you planning on paying only the minimums on your CC while they are at 0%? That makes absolutely ZERO financial sense. This is exactly the time you should be hitting those balances hard to maximize your savings and really get that debt total down.

You really need to rethink your strategy. Your plan is going to keep you in debt longer and increase the total amounts you pay over time.

Take that 5K and pay off the hospital bill, then throw the rest at your CC debt.

Just because you "already signed up for automatic minimum payments" doesn't mean you can't make extra payments in between to bring your balance down. If you aren't careful, that 5K won't be in your account when your zero percent expires and then you will be back in the exact same position; complaining about how other people don't know how to manage their money...

[batgirl]

Update: I put all the cash I have on the discover. They already promised me 2 months of 0% APR, I will try again for the 3rd month when the time comes.

In the meantime, I put my student loans on hold (they are still collecting interest).

I will be paying the minimum payments on the visa (since now the account is closed) and as much as possible on the discover. According to my calculations, my goal is to completely pay off the discover in september.

Thank you everyone for your advice.

[disneysteve]

In the meantime, I put my student loans on hold (they are still collecting interest).

You might want to rethink this. As you point out, going into forbearance doesn't stop interest from accruing. That means that your debt is continuing to climb. So while you are focusing on paying down your credit cards, your student loans will actually be growing which kind of defeats the purpose if your goal is to get out of debt.

Also keep in mind that student loans are not dischargeable in bankruptcy. You are stuck with those loans for life. If it ever came down to a choice of what to pay, you should pick the student loans ahead of the credit cards.

[batgirl]

You might want to rethink this. As you point out, going into forbearance doesn't stop interest from accruing. That means that your debt is continuing to climb. So while you are focusing on paying down your credit cards, your student loans will actually be growing which kind of defeats the purpose if your goal is to get out of debt.

Also keep in mind that student loans are not dischargeable in bankruptcy. You are stuck with those loans for life. If it ever came down to a choice of what to pay, you should pick the student loans ahead of the credit cards.

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