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    Need Credit Card debt advice

    I have been lurking here for awhile now and finally decided to bring my situation to ya'll! Lots of great advice on this site.

    I have aquired quite a bit of credit card debt and have decided that its time to get rid of it! I have a little bit of money that I can spare from my tax return and also have a 0% APR card that is available to me. What would you do if you had the accounts below?

    CC#1 - $1797.69 - 24.99% APR - Min Pymt $57.40
    CC#2 - $859.86 - 22.99% APR - Min Pymnt $33.00
    CC#3 - $1848.51 - 22.74% APR - Min Pymt $54.17
    CC#4 - $1935.89 - 0% APR until 11/14 - Pymt before interest accrues $193.68
    CC#5 - $692.79 - 0% APR until 2/15 - Pymt before interest accrues $52.19
    CC#6 - $690.00 - 0% APR until 3/15 - Pymt before interest accrues $50.00

    I have $2000 that I can put towards this from my tax return and I also have a 0% APR until April 2015 with a $1500 limit.

    I am just not sure where to start. In order to avoid interest on CC#4, I have to pay $193.68/mth. I thought about paying that one off with the money from my tax return and transfering something to the 0% card.

    What should I do?

    #2
    Since you have zero percent on quite a few I would just make the minimums on those for now and focus on knocking the other ones out first. I'd take out CC #1 first with that $2,000 you have and then use whatever you get from taxes on the others. Attack one at a time and you'll feel like you make more progress as you pay them off one by one.

    Comment


      #3
      Thanks for the quick reply.

      The $2000 I have to spare is coming from my taxes. My thinking was that with the $2000 from taxes I should pay off CC#4 even though it is zero interest. It would free up $193.68 per month to put towards one of the higher interest cards.

      I also have a $1500 limit 0% APR til April 2015. This card has a zero balance on it. Which card should I transfer over to it?

      Thank you for the advice!

      Comment


        #4
        Originally posted by mfwyatt05 View Post

        CC#1 - $1797.69 - 24.99% APR - Min Pymt $57.40
        CC#2 - $859.86 - 22.99% APR - Min Pymnt $33.00
        CC#3 - $1848.51 - 22.74% APR - Min Pymt $54.17
        CC#4 - $1935.89 - 0% APR until 11/14 - Pymt before interest accrues $193.68
        CC#5 - $692.79 - 0% APR until 2/15 - Pymt before interest accrues $52.19
        CC#6 - $690.00 - 0% APR until 3/15 - Pymt before interest accrues $50.00

        I have $2000 that I can put towards this from my tax return and I also have a 0% APR until April 2015 with a $1500 limit.
        I'd definitely knock out CC#1 with your income tax refund, and apply the remainder to CC#2. Then transfer the rest of #2 and as much as you can of #3 to your new 0% card. Completely knocking out #1 and #2 will make your life simpler (fewer accounts to manage).

        What does #4 pop up to in November? If it's 22-24%, concentrate payments on #3. If it's 25+%, concentrate payments on #4.

        Of course, as you get cards paid off, allocate what you were paying on them each month to whatever card you're concentrating on, and make minimum payment on your other cards. That is, pay the same total amount each month (or more) until your CC debt is eliminated. And, don't charge them up as they get paid off.

        I've been where you are. It's a lot less fun paying the debts than it is to accumulate the debt. But, you'll eliminate a lot of it with your tax refund, and if you stick to it, you will be truly free when it's all paid off.

        Consider posting a monthly budget. There are a lot of people around here who will be happy to point out where spending can be cut, so you can get out of debt faster, then begin accumulating some wealth.

        Comment


          #5
          Based on a debt snowball spreadsheet I came across, this is all very do-able. Before I post numbers - how much per month would you be able to throw at whatever balance you transfer to the 0% card?

          Comment


            #6
            Thank you Bob. I will work on posting a monthly budget this afternoon. It sure was a lot of fun accumulating the debt but I'm now realizing it wasn't worth it. I was informed last month that my salary will be clicked down to full commission over the next 12 months so I've got to put a plan together. I'm 26 years old and have lived paycheck to paycheck my entire working life, regardless to what pay I was receiving. I have a little help on the utilities and mortgage from my girlfriend of 5 years. I would like to marry her but with my bad spending habits and current work situation, it isnt feasible at this time. Stay tuned as I'll post my budget later today. Thank you again.

            Comment


              #7
              Originally posted by LizfromtheBronx View Post
              Based on a debt snowball spreadsheet I came across, this is all very do-able. Before I post numbers - how much per month would you be able to throw at whatever balance you transfer to the 0% card?
              Liz,

              At this time I don't have a definite number but I could safely say $200/mth.

              Once I finish my budget completely I should have a better idea.

              Thanks for your help.

              Comment


                #8
                My advice is very similar to Bob's...this is what I would do:

                Pay off CC#1 completely, and pay the reminader of the $2k tax refund ($202.31, leaving you with a balance of $657.55) towards CC#2. Transfer $1500 of CC#3 to the new 0% card. Roll the payment from CC#1 into payment for CC#2, making for a total payment of $90.40.

                Here's your updated picture:

                CC#1, $657.55, 22.99%, monthly pmt 90.40 - paid off 9/14
                CC#2, $348.51, 22.74%, monthly pmt 54.17 - paid off 8/14
                CC#3, $1935.89, 0% until 11/14, monthly pmt 193.68 - paid off 10/14
                CC#4, 692.79, 0% until 2/15, monthly pmt 52.19 - paid off 10/14
                CC#5, $690.00, 0% until 3/15, monthly pmt 50.00 - paid off 11/14
                CC#6, $15.00, 0% until 4/15, monthly pmt 200.00 - paid off 9/14

                As a card gets paid off, the payment that was going to that card is added to the next card in the list and so on. You can definitely shift things around, but in your case, since most of these are 0% interest, as long as you stick to the plan, they'll all be paid off before that expires.

                If you Google "debt snowball spreadsheet", you'll be able to find the one I used (not sure if I can post links or not). I've used it in the past, it's very user friendly and lets you model what kind of snowball you'd like to do.

                The best news is...starting in December of this year, you'll have an extra $640 a month to put towards other goals.

                Comment


                  #9
                  As you can see from the income below, I am in prompt need for a big change. The way my business is now are what the income numbers are based on. They could increase if I were to obtain a new account(s) or decrease if I were to lose an account(s).

                  Monthly Net Income (I am on a click down from Salary to commission. May Jan are estimated.)

                  Current - $3660 This will be my pay until May 1st when the click down starts
                  May - $2956
                  June - $2956
                  July - $2956
                  August - $2252
                  September - $2252
                  October - $2252
                  November - $1900
                  December - $1900
                  Jan 2015 - $1900

                  Credit Card Debt - $7824.74

                  CC#1 - $1797.69 - 24.99% APR - Min Pymt $57.40
                  CC#2 - $859.86 - 22.99% APR - Min Pymnt $33.00
                  CC#3 - $1848.51 - 22.74% APR - Min Pymt $54.17
                  CC#4 - $1935.89 - 0% APR until 11/14 - Pymt before interest accrues $193.68
                  CC#5 - $692.79 - 0% APR until 2/15 - Pymt before interest accrues $52.19
                  CC#6 - $690.00 - 0% APR until 3/15 - Pymt before interest accrues $50.00

                  Auto Loan/Boat Loan

                  Car - $11,430.03 2.5% APR Pymt $298.49
                  Boats - $21,957.84 5.65% APR - Pymt $433.49

                  One of the very few joys in my life is fishing so I am trying to avoid having to do anything with my boat. I am actually selling my car because I have a very reliable car available to me from my late grandmother. That could free up $300/month.

                  Home Mortgage

                  $103,427.07 3.75% Fixed APR 30 Year (Balance is according to 16 pymts made thus far)
                  I pay $358.00/mnth. My significant other pays the rest.

                  Utilities - $267/month

                  Trash Service - $13/month
                  Gas - $19/month
                  Electric - $75/month
                  Water - $30/month
                  Cell Phone - $106/month (I am in the process of switching to StraightTalk. It will save $60)
                  Internet - $24/month

                  Other Monthly Expenses - $625/month

                  Auto Insurance - $152/month
                  Boat Insurance - $62/month
                  Netflix - $9/month
                  Dog Food - $22/month
                  Gasoline - $200/month
                  Groceries - $150/month
                  RX Meds - $30/month

                  Comment


                    #10
                    Originally posted by mfwyatt05 View Post

                    Monthly Net Income (I am on a click down from Salary to commission. May Jan are estimated.)

                    Current - $3660 This will be my pay until May 1st when the click down starts
                    May - $2956
                    June - $2956
                    July - $2956
                    August - $2252
                    September - $2252
                    October - $2252
                    November - $1900
                    December - $1900
                    Jan 2015 - $1900

                    Credit Card Debt - $7824.74

                    CC#1 - $1797.69 - 24.99% APR - Min Pymt $57.40
                    CC#2 - $859.86 - 22.99% APR - Min Pymnt $33.00
                    CC#3 - $1848.51 - 22.74% APR - Min Pymt $54.17
                    CC#4 - $1935.89 - 0% APR until 11/14 - Pymt before interest accrues $193.68
                    CC#5 - $692.79 - 0% APR until 2/15 - Pymt before interest accrues $52.19
                    CC#6 - $690.00 - 0% APR until 3/15 - Pymt before interest accrues $50.00

                    Auto Loan/Boat Loan

                    Car - $11,430.03 2.5% APR Pymt $298.49
                    Boats - $21,957.84 5.65% APR - Pymt $433.49

                    One of the very few joys in my life is fishing so I am trying to avoid having to do anything with my boat. I am actually selling my car because I have a very reliable car available to me from my late grandmother. That could free up $300/month.

                    Home Mortgage

                    $103,427.07 3.75% Fixed APR 30 Year (Balance is according to 16 pymts made thus far)
                    I pay $358.00/mnth. My significant other pays the rest.

                    Utilities - $267/month

                    Trash Service - $13/month
                    Gas - $19/month
                    Electric - $75/month
                    Water - $30/month
                    Cell Phone - $106/month (I am in the process of switching to StraightTalk. It will save $60)
                    Internet - $24/month

                    Other Monthly Expenses - $625/month

                    Auto Insurance - $152/month
                    Boat Insurance - $62/month
                    Netflix - $9/month
                    Dog Food - $22/month
                    Gasoline - $200/month
                    Groceries - $150/month
                    RX Meds - $30/month
                    You listed expenses of $2,400 per month. That would leave you with an additional $1,200 per month to go toward debt. You could have your CC debt eliminated in less than six months. That doesn't count your income tax refund. I know you're on a click down for base salary, but presumably your commission can fill in, and exceed the short fall?

                    I suspect you've left some things out of your budget - entertainment/meals out, auto repairs, clothing, health insurance? Do some of those items plus other things make up the $1,200 difference?

                    Do you contribute to retirement to at least match an employer contribution?

                    I won't even touch the boat.

                    Identify where that other 1.2K/mo. is going.

                    Comment


                      #11
                      I believe you need to get a clearer picture of your finances. To that end I suggest beginning February 1 for an entire month, you write down every single dollar spent whether cash, CC, or on-line either small notebook or electronic. You need to see the leakage. How much are you spending on entertainment? Meals and snacks need to be identified and added to your food category.

                      Am I correct in assuming that as your base salary sinks from $ 3660. to $1,900. it is assumed that your commission will make up the $ 1760. and more difference?

                      I'm hopeful you'll action the plan suggested and focus on clearing all 6 CCs.; 22%, 24% and nearly 25% interest is outrageous when the government bank rate hovers around 0%. Perhaps if you add up the sum you've paid in interest in 2013, you'll see why we enthusiastically support your effort to clear debt. What is the KBB value of your car? When will you photograph and advertise on any of the popular venues in your area? Which debt will you apply the proceeds?

                      Keep us up to date on your progress and we'll be here to cheer your every step towards financial freedom.

                      Comment

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