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    What to do, oh, what to do...

    Greetings y'all!

    I am thirty years old and about $15,000 in debt ($10K in credit, $5K in student loans). Lately, I've been working on shifting half of my credit card debt to a credit card with a lower APR (ideally 0%). Unfortunately, the two credit cards in my name are close to their maximum credit limit and I have been declined for all of the low APR (two) cards I've applied for in the last month.

    After doing some research, I found that running a balance so close to the credit limit is detrimental to my credit score. Rejection letters from the cards I applied for have indicated this is the primary reason for the denial.

    I'm currently considering the following scenarios:
    • Pay more on the credit card debt, get the balances about 30% lower, reapply for low APR credit cards and transfer the balance
    • Apply for a signature loan at 8% APR with my credit union and use it to absolve the higher APR credit card


    Upon signing up for this website, I submitted information to the NFCC for credit counseling but I'd also like to get some differing opinions on my situation.

    If there's anything further I can include, please advise. Thank you so much for your time, your consideration, and this forum!

    #2
    Will the credit union approve your loan? If you can reduce the interest rate and you can afford the payments on the credit union loan, by all means, proceed. The less interest you pay, the better off you are.

    Comment


      #3
      Welcome to SA. What interest rates do your CCs charge on $ 10K of CC debt? Is DW on-board with your desire to get out of debt? I hope you'll take the next step and investigate the availability, terms and conditions of a lower interest loan from your CU. The corollary is putting those CCs in your fridge freezer to stop running up new balances while you bravely face down and eliminate old debt.

      We're here to help and cheer your every move forward. It takes a bit of determination to get the ball rolling but it can be very satisfying to go on a financial 'diet' and see the debt melt away. What does your budget look like? Where does the money go?

      Comment


        #4
        Originally posted by Petunia 100 View Post
        Will the credit union approve your loan? If you can reduce the interest rate and you can afford the payments on the credit union loan, by all means, proceed. The less interest you pay, the better off you are.
        That's another issue that I see facing me in the future, I'm not 100% sure. I have had signature loans in the past from the CU but, since this recent aquisition of debt, things might be different.

        Comment


          #5
          Originally posted by snafu View Post
          Welcome to SA. What interest rates do your CCs charge on $ 10K of CC debt? Is DW on-board with your desire to get out of debt? I hope you'll take the next step and investigate the availability, terms and conditions of a lower interest loan from your CU. The corollary is putting those CCs in your fridge freezer to stop running up new balances while you bravely face down and eliminate old debt.

          We're here to help and cheer your every move forward. It takes a bit of determination to get the ball rolling but it can be very satisfying to go on a financial 'diet' and see the debt melt away. What does your budget look like? Where does the money go?
          One card is with the CU, it's about $5K @ 7.99%. The other card is with Chase at a higher rate, 16%, with a similar balance. The reason for the Chase card was to fund a vacation with my wife, which she agreed to help pay for and has since reneged on our initial agreement.

          I am currently using Mint to track and maintain my finances and budget, which has been helpful in the last few months. My budget allocations are not quite at their proper levels yet, I'm working on making the values each month more practical than what Mint suggests (it sets them high, though I do understand it's based on past behavior).

          So the budget breakdown is roughly:
          • 30% home (rent, utilities, internet, cell phone)
          • 30% food (groceries, fast food, restaurants)
          • 15% debt obligations
          • 8% auto (gasoline, insurance)
          • 17% remaining for fluctuating expenses


          Further complicating things is the standing of my marriage, things have been flaky for years and are not improving but I think that's mostly a whole other forum for discussion. She says she's 'on board' but, after burning me on the vacation credit card, it's hard to believe her words over her actions.

          In my ideal situation, we would move into my MIL's house and pay substantually less for rent while also saving on not eating out quite as much. This move would allow me to allocate the difference in home expenses to reduce debt obligations.
          Last edited by basic flair; 06-03-2015, 11:30 AM.

          Comment


            #6
            .

            Hello! I joined this forum specifically to answer your post. Take my advice for whatever it's worth.

            First, based on your intro thread, it sounds like you have no kids, so it's an ideal time to pay down your debt. In your intro post, you mention you worked as a waiter. If you're serious abut paying off your debt, I'd consider taking an extra job one or two nights a week to pay down debts. (Of course, if you have no kids, it does raise the question of why you're the primary breadwinner, unless you mean your wife also works f/t but doesn't make as much as you do )

            You divvied up your expenses into broad categories; unless you know exactly where your money is going, it's going to be hard to make cuts. Based on your info, I'd get a crockpot and start using it maybe make double recipes and freeze a portion to use for a future meal. Make and take ALL your lunches including beverages. It's a huge money-saver. Be sure you put all the money you save toward your debt. It can be very easy to just fritter it away. That's why tracking your spending for at least a month to see where every dollar is going is usually the first (admittedly cumbersome) step to really meaningful savings. Even without doing that, though, I think you can save plenty by focusing on your meal planning. Probably could also cut back on cell and Internet, but your wife might start grumbling; what wife is going to grumble about guy who cooks?

            Also, stop applying for credit for at least a few months; each application you submit can drop your score by several points, and a spate of apps makes you look desperate to many lenders.
            Good luck! I look forward to updates!

            Comment


              #7
              Max,

              Thanks for your comment! Allow me to update you on the current situation:

              We decided to begin moving out of our apartment this month and moved in with my MIL as trial run. We found that the MIL's house had a lot of people coming and going, it is also currently undergoing renovation and we decided it was not a good place to settle in. Instead, my wife and I have decided to move in with my mother.

              My wife is now gainfully employed as a campaign manager for a state rep position. She's very excited about the job and is much more on board with the plan to move forward on eliminating our debt. I'm not counting my chickens before they hatch but it's a positive move.

              I've been using the Mint app to track my expenses, I've found it very helpful and living with and within a budget is much easier now.

              Regarding my credit, I have signed up with Credit Karma to track my credit score. I also requested hard copies of my credit report from the three different agencies; the data is accurate, it's just high balances killing me right now.

              As for work, I've been working in O&G for the last few years, I stopped waiting tables long ago. I have considered picking it back up for a weekend job but I don't quite feel like it's necessary at this point, especially with the new income. I've done photography work in the past to bring in extra cash but put it down for a while, maybe it's time to pick back up.

              Will keep in touch!

              Comment


                #8
                Wow, you have made strides! Good for you - some really positive moves in a short period of time. Look forward to hearing your updates!

                Comment


                  #9
                  Brief update:

                  Our move into my mom's house is complete, the last day we had in our apartment was Aug. 31. Making the decision to close out the apartment was a tough one for my wife but she finally came aboard, albeit at the last minute.

                  Another highlight is that I finally closed out a loan account with my credit union, that's going to be an additional $157/mo going toward credit card debt.

                  The current plan is to throw money at the credit card with the highest APR while making minimum payments on the other one. We should be at or below 70% of the credit limit in January 2016, at which time I plan on transfering the balance to another, lower APR credit card.

                  Things are happening and moves are being made, we'll be out of credit card debt in about nine months.

                  Comment


                    #10
                    Good job making some moves to turn things in the right direction !

                    With both of you working and having free rent at a parents, you should be able to knock off that $15,000 credit card debt pretty rapidly if you get serious. I wouldn't be so concerned with "moving money" one place to the next just to pick up a couple interest points. Slam away at that debt and it won't be a problem for long.

                    I see lots of posts in these financial forums about refinancing existing debt to take advantage of lower rates. Although that can save a buck or two, the damage is done and you are just slowing the bleeding. Change behaviors, pay that stuff off and stop the bleeding all together.

                    Comment


                      #11
                      I agree with FishinDude. I'm not against transferring a balance to take advantage 0% interest for up to 12-15 months or getting a loan at a lower interest rate but you have to be committed to changing your spending habits and living on a budget.

                      Also do you have an emergency fund in place yet? If you don't you need to get one funded before you consider attacking this debt. The last thing you would want is to have a financial emergency wipe out all the progress you made attacking your credit card debt and then you are right back to square one.

                      Comment


                        #12
                        Thanks for the update. Delighted that there have been changes. Have you checked with any of the [4] credit agencies for your free report. I wondered if you had called Chase and asked for a lower interest rate as their 16% is so high if your credit/FICO score is reasonable.

                        Totally off topic but Credit Card Free kindly added a pdf link for the SA participant's popular ynab [You Need a Budget]. It's a lengthy read, easily spread out day-by-day with ideas which might easily be of benefit to your circumstances.

                        http://www.youneedabudget.com/downloads/10DayCourse.pdf

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