Going on Deploment in Debt!

[SargentSailor23]

I'm 23 and REALLY messed up my Financial situation! I'm in the military and deploy next month luckily I will have "extra" money since I wont be paying for any expenses. I have very little financial knowledge and want to fix my problem, build my credit up! Here's my horrible stats:

Credit Card 1 - 3440
Credit Card 2 - 1774
Credit Card 3 - 500
Loan - 6800

Just down know what order to start paying these in. also should i save up the money then pay each card/loan in full? any advice to help me get out the hole and better my credit is greatly appreciated

Thank You!

[disneysteve]

There are two theories.

The mathematically better option which will get you out of debt the fastest and save you the most on interest is to repay the loans from highest interest rate to lowest interest rate.

The more motivational method is to pay from lowest balance to highest balance.

Both ways work. Both ways get you debt-free in the end. Pick one method and stick with it and you'll be out of debt in no time since you have no expenses and can devote most of your income to this.

How much will you be earning? You've got $12,500 in debt. You can probably clear that up in a few months depending on your income.

[SargentSailor23]

Thank you for the advice! I like the first option.
My income for the next 8-9 months will be $3560 a month.

Will doing that method assist in building my credit back up? Right now im at 544 I love! to get at least close to 700 in 9 months

[disneysteve]

Thank you for the advice! I like the first option.
My income for the next 8-9 months will be $3560 a month.

Will doing that method assist in building my credit back up? Right now im at 544 I love! to get at least close to 700 in 9 months

What raises your score is paying your bills on time every month and not maxing out your available credit. So yes, paying on your accounts and reducing your outstanding debt will gradually aid your credit score.

[creditcardfree]

Your income will be tax free while you are in a combat zone. That is savings right there that can be applied to your debts. Both times my husband was deployed made for great improvements in our financial situation, I hope the same for you.

Also look into the SDP (Savings Deposit Program) after your bills are paid off, you can earn 10% interest while you are there.

[kyoko]

I am just wondering... is there any of your credit cards and loans that you created before you became an active duty? If so, what are their interest rates?

You may already know but there is a solders and sailors act (SSCRA) that releases some of the financial burden for service members. You can contact to your lenders and give them your order and enlistment contract so they can reduce your interest at maximum of 6%. We got 0% until my husband got retired... But again, this is only if you already had those debt before you became a service member.

Make sure you set up the auto payment so you won't miss any payments while you are under deployment.
I would suggest you to pay off $500 first...

Thank you for serving our country.