Getting really scared

[inneedofhelp]

Ok, so I have an account w/ bofa, and they recently reduced a line of credit I had by over $4,000---essentially bringing it down to my remaining balance.

well, I am paying it off and making good on the agreed monthly payments, and low and behold, they just reduced it again by $500....mind you, they sent me a letter over a month ago about if I choose to borrow on the loan, that I must repay what I borrow within 60 days. Ok, but since the initial loan agreement, I have not used any of the available credit.

I am now worried that they are going to try and make my credit limit below my balance, and start fee-ing me like crazy.

I am really afraid----my savings has dwindled, and I am really freaked out, I am trying to find a 2nd job, and I am now wondering if it is better to have decent credit (high 600s), and no emergency savings or excess cash after payday except for food and gas, or if it is better to save over $500+ dollars a month in earnings, and have poor credit....

[canadamom]

I think this a common thing. I notice that with several accounts even Lowes and Home Depot.

[maat55]

All you can do is cut your budget to the bone, see to your initial needs of food, lights etc., find any additional work, sell anything you do not need and pay what you can on the note.

I would forget about your score and worry about getting out of debt. Do what is best for you , not your score.

[inneedofhelp]

I have cut my budget as low as it can go (hence my problems with buying food and overspending even when I am not buying lavish or organic or even restaurant meals!) and I am making the minimum monthly payments, and have no money left over to put towards savings.

[Radiance]

Hello

3 of 4 my credit cards did that to me too, basically lowering the limit as I pay down. They never got my limit under my balance. I doubt it that is legal, it is surely not moral.

The one credit card where I have $5000 limit but they never lowered it I got though my credit union. Credit unions rock and for so many reasons!

If you have good credit on the upper 600s, why not transfer your balance with a better creditor, such a credit union.

if it is better to have decent credit (high 600s), and no emergency savings or excess cash after payday except for food and gas, or if it is better to save over $500+ dollars a month in earnings, and have poor credit....

Ive heard everywhere that a minimum of $300 emergency fund is more important than paying off debt. Once you have that, you might as well pay, pay, pay it off!

What is it better? to be debt free, As soon as I pay them off i don't plan to use those cards/loans, I might actually close 2 of them to avoid annual fees.

I also got a personal loan at lower interest rate with my credit union to pay off and consolidate other debt I had (mainly store credit)

[maat55]

I have cut my budget as low as it can go (hence my problems with buying food and overspending even when I am not buying lavish or organic or even restaurant meals!) and I am making the minimum monthly payments, and have no money left over to put towards savings.

Has your income changed due to company cutbacks or other?

[inneedofhelp]

My budget was always a bit close--I would have maybe 60 bucks left over after all of my bills were paid.

the biggest issue is that my food budget is $100 per month, and I don't think I have ever stuck to that amount. I know, why make it that amount if I can do it....i think I can, but just haven't done it.

then I get into situations were because I dont have much left over every month, i get behind because of car registration, oil changes, baby showers, birthdays, etc. But mainly food.

[Alex_Adviser]

All you can do is cut your budget to the bone, see to your initial needs of food, lights etc., find any additional work, sell anything you do not need and pay what you can on the note.

I would forget about your score and worry about getting out of debt. Do what is best for you , not your score.

Completely agree with maat55.

As per you current situation you must not even worry about your credit score but try to make as much savings as possible. Better if you can find a second job to keep up on savings.

[inneedofhelp]

Well, if I just keep paying what I am paying now, I will be debt free in 2 years and 7 months. Woo hoo!

So, I am in a quandry---I can do debt consolidation to see if I can bring down my minimum payments and free up money for savings, which would result in harming my credit score

or I could keep plodding down my debt and hoping that I don't need to go anymore into my savings.

I am actively looking for a part time job, and thinking of things I could sell.

[Radiance]

So, I am in a quandry---I can do debt consolidation to see if I can bring down my minimum payments and free up money for savings, which would result in harming my credit score

I have said this several times, I 'consolidated' a lot of my debt into a personal loan with a credit union without actually doing a formal debt consolidation, therefore my credit score actually raised.

Example (numbers are ficticious)
CC#1 1200
CC#2 500
CC#3 800
Total = 2500

I applied for a personal loan at my credit union and stated the purpose was to pay off that debt. They did not approve me for the 2500, only for 2000 at 12%

So, I pay CC#1 and CC# 2 and I sent the remainder 300 to CC#3

All this increased my available limit/balance ratio thus increasing my credit score by about 20 points.