Am I doing it right

[DarkShade9]

As noted in my signature, I recently consolidated my major credit cards into a secured loan from CitiFinancial, and the leftover money was cut as a check to me to do whatever I wish. I'm just looking for some opinions from those who KNOW what they are doing as opposed to myself I also own a 97 Acura but the title is now at CitiFinancial for collateral.

 

This is what my credit and budget profile looked like previously. I make $1,600 net per month:

$2,800 @ 19.49% 1FBUSA ($70/mo pymnt)
$1,700 @ 16% Providian ($60/mo pymnt)
$850 @ 16% MBNA ($60/mo pymnt)
$450 @ 21.74% TGT Visa ($30/mo pymnt)
$270 @ 0% HHBank ($20/mo pymnt)
$87 @ 0% HHBank Platinum ($20/mo pymnt)
$55/mo. Cell Phone Bill
$300/mo. Tuition
$95/mo. Car Insurance
$100/mo. Rent
$200/mo. for gas, misc. food and other expenses

which leaves me appoximately $600 leftover every month.

 

Now my new budget:

$6,100 @ 12.8% CitiFinancial ($175/mo. min. pymnt)
$450 @ 21.74% TGT Visa ($30/mo pymnt)
$270 @ 0% HHBank ($20/mo pymnt)
$0 @ 0% HHBank Platinum (Done)
$55/mo. Cell Phone Bill
$300/mo. Tuition
$95/mo. Car Insurance
$100/mo. Rent
$200/mo. for gas, misc. food and other expenses

Again, leaving me with slightly more than $600 leftover per month. The difference is that the new loan is a secured line of credit, all of my major credit cards are now at $0 balance, and my CR will go up. With that leftover $600 I plan on putting ALL of that into the loan, making $775 payments every month for the life of the loan (approximately 8 months till $0 balance).

 

Or should I first knock out the other two CC's since their balances are small, even if their monthly payments are weak as well, and THEN work on the loan? I plan on making a large purchase this summer and I want the best CR and $0 balances on my major items by that time, so I can attain a better % rate when I do.

 

What do you think? Thanks.

Edited October 13, 2006 by DarkShade9

[hegemony]

why is the citi financial APR? remember the effect of amortization.

[DarkShade9]

Oh right, guess that would be a contributing factor

 

It's at 12.8%, I'll edit the first post to reflect this

 

Edit: I've noticed some threads about FICO vs. Utilization %, and I am wrong that if I apply for a credit card or two now that 6+ months down the road it will be seen as a positive as long as I keep it at 0 balance?

Edited October 13, 2006 by DarkShade9

[DarkShade9]

Another thing to mention is that my two big CC's that are being paid off this week are *closed* accounts and have been for years. This was due to my own ineptitude. Should I apply for more credit now, or do they help my credit age even if they are closed? I want to have a nice balance between credit age and utilization %.

 

After I get these all paid, I definitely plan on never having a rolling over balace on any credit card, ever!

[Keishala]

Pay off Target as soon as you can. The interest rate is ridiculous.

 

IMO, you shouldn't apply for more credit until you learn to use the credit you have without paying any interest or fees...i.e. pay in full every month.

 

Good Luck

[DarkShade9]

Yes that is exactly what I am going to do from now on, paying balances in full. I'll never have an outstanding balance on a card, EVER!

[angeleyeskkhr]

As noted in my signature, I recently consolidated my major credit cards into a secured loan from CitiFinancial, and the leftover money was cut as a check to me to do whatever I wish. I'm just looking for some opinions from those who KNOW what they are doing as opposed to myself I also own a 97 Acura but the title is now at CitiFinancial for collateral.

 

This is what my credit and budget profile looked like previously. I make $1,600 net per month:

$2,800 @ 19.49% 1FBUSA ($70/mo pymnt)
$1,700 @ 16% Providian ($60/mo pymnt)
$850 @ 16% MBNA ($60/mo pymnt)
$450 @ 21.74% TGT Visa ($30/mo pymnt)
$270 @ 0% HHBank ($20/mo pymnt)
$87 @ 0% HHBank Platinum ($20/mo pymnt)
$55/mo. Cell Phone Bill
$300/mo. Tuition
$95/mo. Car Insurance
$100/mo. Rent
$200/mo. for gas, misc. food and other expenses

which leaves me appoximately $600 leftover every month.

 

Now my new budget:

$6,100 @ 12.8% CitiFinancial ($175/mo. min. pymnt)
$450 @ 21.74% TGT Visa ($30/mo pymnt)
$270 @ 0% HHBank ($20/mo pymnt)
$0 @ 0% HHBank Platinum (Done)
$55/mo. Cell Phone Bill
$300/mo. Tuition
$95/mo. Car Insurance
$100/mo. Rent
$200/mo. for gas, misc. food and other expenses

Again, leaving me with slightly more than $600 leftover per month. The difference is that the new loan is a secured line of credit, all of my major credit cards are now at $0 balance, and my CR will go up. With that leftover $600 I plan on putting ALL of that into the loan, making $775 payments every month for the life of the loan (approximately 8 months till $0 balance).

 

Or should I first knock out the other two CC's since their balances are small, even if their monthly payments are weak as well, and THEN work on the loan? I plan on making a large purchase this summer and I want the best CR and $0 balances on my major items by that time, so I can attain a better % rate when I do.

 

What do you think? Thanks.

 

I'd switch and pay the $175/mo to Target until that's paid off, and pay minimum on Citi.

 

THEN throw the $175+minimum on Citi until paid off

Then follow through with the one at 0% (or throw it in savings to pay off when the 0% is up).

 

I'm not sure I see which is the loan?

 

ETA: I see the $175 is the min...sorry, basically start with Target to snowball.

Edited October 15, 2006 by angeleyeskkhr

[LauraC]

Looks like you have a plan

 

 

Did you say you have some leftover that they are putting in a check to you? Why not apply that to the other credit cards and stick to your plan?

[DarkShade9]

Looks like you have a plan

 

 

Did you say you have some leftover that they are putting in a check to you? Why not apply that to the other credit cards and stick to your plan?

 

Yup, that's exactly what I did. My MBNA was swallowed up immediately when I deposited that check.

 

I did a quick budget today while at school in my notebook, the Target card will be paid off next month, the HH Bank card in January (I gotta spend a LITTLE for Christmas ) and the CitiFinancial loan will be gone around July.

 

I had a question for the gurus here: What does the acronym TL mean? And at what point would it be a good idea to have 8+ zero balance credit cards like I see in everyone's signature? I know I should bring my utilization % down but once these cards are paid off since they are closed accounts, I will only have 3 revolving accounts, 1 of which is zero balance $300 limit and the other two are the HHBank and Target Visa. Also, do I have the option to delete closed accounts from my profile or do I have to wait for those to fall off on their own, regardless of their age, and do even closed accounts help your score at all, or are they negative in any way? Options?

Edited October 17, 2006 by DarkShade9

[squirrelgirl]

Since you'll have an extra $600 a month - PIF on the Target the very first month.

 

Then, snowball at least double the payments to Citifinancial - the rest of the money, IMO, set aside in an emergency fund. At least 1K. That way if you run into trouble, you would have at least 5 months worth of payments for Citifinancial - remember they hold the title to your car, you don't want to jeopardize that.

[squirrelgirl]

Looks like you have a plan

 

 

Did you say you have some leftover that they are putting in a check to you? Why not apply that to the other credit cards and stick to your plan?

 

Yup, that's exactly what I did. My MBNA was swallowed up immediately when I deposited that check.

 

I did a quick budget today while at school in my notebook, the Target card will be paid off next month, the HH Bank card in January (I gotta spend a LITTLE for Christmas ) and the CitiFinancial loan will be gone around July.

 

I had a question for the gurus here: What does the acronym TL mean? And at what point would it be a good idea to have 8+ zero balance credit cards like I see in everyone's signature? I know I should bring my utilization % down but once these cards are paid off since they are closed accounts, I will only have 3 revolving accounts, 1 of which is zero balance $300 limit and the other two are the HHBank and Target Visa. Also, do I have the option to delete closed accounts from my profile or do I have to wait for those to fall off on their own, regardless of their age, and do even closed accounts help your score at all, or are they negative in any way? Options?

 

 

IMO - don't close the cards just because you are paying them to zero... let them sit in your sockdrawer, use for a small purchase once every 4-6 months and PIF.

 

TL=Tradeline

[DarkShade9]

IMO - don't close the cards just because you are paying them to zero... let them sit in your sockdrawer, use for a small purchase once every 4-6 months and PIF.

 

TL=Tradeline

 

Yeah I plan on applying for a gas rewards card to use ONLY for gas, and also only at the local Kroger where I get 10c off each gallon using my PlusCard, and then PIF every statemen, unless I should just keep my hands off new card applications and use the cards I currently have for gas/groceries and PIF on those. (Although I did recently ask for a CLI on my 0 balance HHBank account to see what would happen)

 

What I really meant about removing the closed accounts is that I just paid off 3 accounts that have been reporting as closed for 2+ years, if I (could) get them removed from the profile, should I?

 

My main goal is to get out of CC debt and pay off the loan by summer of 07, put my util % at 0 or near 0 and to purchase a new car. Is my plan feasible?

 

myFICO reports that the best thing I could do is pay off 90%-100% of my revolving debts, which I did this month with my loan. The best action simulator said my FICO score would move from a 652 (TU) to a range between 732 and 772, which would be nice!

Edited October 18, 2006 by DarkShade9

[LBCS]

Outstanding balances are not necessarily bad. 0% cards are awesome for BT's :-)

 

Yes that is exactly what I am going to do from now on, paying balances in full. I'll never have an outstanding balance on a card, EVER!