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Lwhit1231

I need advice about drowning in credit card debt and tight budgeting!

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Hello all!!

 

I will try to make this as short and sweet as possible. I used to make much more money than what I am currently making. Never paid late on my cards until recently and I’m still never more than a few days late. My cards are all maxed out and it’s costing so much to keep up with everything. I thought about going on the hardship program with my cards but I think that might have a negative affect on my credit. My utilization is at 99%.  I just don’t even know where to start. I would love to just work on getting the balances down because I feel like the hard work will stop me from charging the cards up again. I have 9 cards. And I have no lates reported as I’m never more than a few days late.  

GAP-200

JCP-500

CapOne-600

Citi-900

Walmart-1780

Macys-2700

Chase-3000

BCU-5000

Amex-5000

 

Any advice would be appreciated!!

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Posted (edited)

Have you sat down and done a budget? Either on paper or in a spreadsheet on the computer. You need to put down what you bring home per month in income. Then list every bill, every expense, even entertainment. Don’t forget to add in what your CC debt is costing per month. You can then see where every penny is going and decide where you can cut costs. Most people don’t realize how much they spend on trivial expenses that can be cut until they actually see it in writing. 

Then you’ll need a separate spreadsheet for your cards. You need to sort by interest rate. 

Once you figure out how much you can put towards your debt, make the minimum payments on every card. Then put any leftover money towards the highest interest rate card. Once that card is paid off, put any extra towards the next card. Repeat for the remaining cards until everything is paid off. 

Make sure you set something aside for emergencies too. With high utilization, you won’t have access to quick credit in an emergency. So you need to make sure you have a reserve fund. Although, this is something that should be done by everyone anyway. 

This method isn’t the fastest way to improve your FICO scores, but it is the fastest way to pay off your debt (which should be your goal). Your scores are already negatively impacted by high utilization. But they will improve as you pay down the balances. And since you haven’t paid 30 days late, once everything is paid off your reports will be prestine. 

I don’t know much about hardship programs. But if they don’t report negative info, that may be a good idea without long term effects. If you can get your interest rates lowered it will make a huge difference. It may be worth a phone call to the different CC issuers, but others will chime in with more info on that. 

 

Also, PM a moderator and ask for this thread to be moved to the main credit forum. You’ll get more views there. 

Edited by DPB

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Posted (edited)

Definitely look at what you're spending and cut back.

 

Cable/Netflix/Hulu/Spotify - cancel

Home internet service - downgrade to slowest speed offered 

Mobile phone - move to an MVNO

Car insurance - are you overinsured? is your deductible too low?  Make advisable adjustments.

Food - eggs, rice, beans, potatoes cost almost nothing.  No restaurant food, ever. 

Other subscriptions - digital newspapers, etc - gone

 

Extra bedroom?  Rent it out.

Drive for Uber or Lyft in your free time

Babysit

 

Use every extra nickel you find against your debt - highest APR first.

 

DO NOT continue putting charges on credit cards when you are carrying balances...  you've lost the grace period and interest starts accruing immediately.   PAY CASH for everything.

Edited by cv91915

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9 hours ago, Lwhit1231 said:

GAP-200

JCP-500

Walmart-1780

Once these are paid, close them. 

 

No reason to have store-specific cards when you have general-purpose ones. 

 

An extra 10% off at Gap for a pair of pea green clam-diggers you don't need isn't a benefit. 

 

Ditto 0% for 6 months at Walmart for a shopping cart full of aluminum foil and meat-flavored water.

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I wouldn’t say no restaurant ever. An occasional night out can be beneficial to one’s mental health. But it just has to be infrequent and within budget. 

 

I completely agree with the pay cash for everything part. I meant to put that in my original reply. Same thing for closing the three cards you listed. I suspect that they are the highest APR cards of those listed. 

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Have you looked at the Money Management forum on here? There are a few pinned threads about budgeting in there. There are also things like the ibotta app for coupons when shopping. I'm averaging about $25 per month in cash back and only really buying the things I usually use. It's not a huge amount of money, but it doesn't take that much time or effort, and small things add up.

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Yes I’m looking into a part time job that gets me about 1000 a month. I need the extra income to pay down these cards. This has been some great advice. I’m making my budget and paying down my debt. I thought closing out cards would reflect badly on my credit. 

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1 hour ago, Lwhit1231 said:

 I thought closing out cards would reflect badly on my credit. 

 

There are differing opinions on this.  As you probably know, the second biggest component of your FICO score, after payment history, is utilization ratio.  I hardly ever buy anything at JCPenney but the account has been in good standing (opened it because it was offered in the mail, back in my subprime, pre-CreditBoards days when I knew knothing, and you can use it to pay at Rite-Aid drugstores) for so long that they've upped my credit limit to $6,000.  That's a helpful thing to have in my profile, utilization-wise.

 

The limits on your store cards are way too low to be helping.  I, for one, would recommend keeping them open IF YOU ARE CONFIDENT THAT YOU CAN LEAVE THEM IN YOUR SOCK DRAWER.  You say you have a decent payment history, so over time, as your CC utilization goes down and your score goes correspondingly up, Synchrony is liable to grant you credit increases that may, over the very long term, amount to CL's that will have real benefit to your util ratio & score.

 

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11 hours ago, Sidewinder said:

 

There are differing opinions on this.  As you probably know, the second biggest component of your FICO score, after payment history, is utilization ratio.  I hardly ever buy anything at JCPenney but the account has been in good standing (opened it because it was offered in the mail, back in my subprime, pre-CreditBoards days when I knew knothing, and you can use it to pay at Rite-Aid drugstores) for so long that they've upped my credit limit to $6,000.  That's a helpful thing to have in my profile, utilization-wise.

 

The limits on your store cards are way too low to be helping.  I, for one, would recommend keeping them open IF YOU ARE CONFIDENT THAT YOU CAN LEAVE THEM IN YOUR SOCK DRAWER.  You say you have a decent payment history, so over time, as your CC utilization goes down and your score goes correspondingly up, Synchrony is liable to grant you credit increases that may, over the very long term, amount to CL's that will have real benefit to your util ratio & score.

 

 

Same. I use it once a year online to keep it active. At Black Friday/Cyber Monday, I get $25 or $50 worth of clothes or something else I need, and pay it off immediately. It's the first card I ever had, and the limit is way over what I would even think of spending there. I treat my Kohl's card, with its pitiful limit, the same.

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None of these balances are monumentally large so unless you can't work, I wouldn't even consider bk or debt consolidation at this point. 

 

I would forget about the pay cash for everything at this point...not until you pay off your cards.

 

Based on your budget, Look at every recurring necessity you have on a monthly basis that you can charge on your cards and pay at least the highest interest card in full, then charge it back up every month with the things you would have paid cash for anyway.  Then do the same thing monthly.  This tactic will save you the interest charges since you are  paying in full and won't get you deeper in debt.  Most importantly, it will keep your credit in tact.

 

Get the part time job and chip away at the other cards.  Pay off the highest interest cards first.  Within a year, you will be debt free.  

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Hello, I have been in this same general boat for a very long time and finally appear to be poised to jump out of this boat. The main thing is to increase your income. After that, or at the same time, is to decrease expenses, and yes to burn the candle at both ends.

 

The first example that always, always, comes to mind is, Phone service, unlimited and with generous internet allowance, can be had for $27 a month. Possibly less, but, I have been ridiculed for letting service lapse on a $27 a month no contract bill. By those paying more than $100 a month for a contract. Think about that for a second. I am not the one in error..

 

Next up is bagged lunches. Ultimate: Get a job where there is free food, meaning.. and no, that is not fast food. I am speaking of a job - no, a career where one of the perks is prepared, free food while on break, at no cost to you, as part of the contract negotiation. These are goals, but you can attain them if you stay the course and never get knocked off your path!

 

I have at least $5000 of debt, more like.. ohh $8000 if I add up the ones I am actively attacking and paying down, and they will be paid off by the end of the year. I did this by increasing my income. I have a long commute to work, and it is worth it. Only the best remain at my work, and they are rewarded with raises on a pretty regular basis so there is benefit to quitting what does not work for you. This can take some time to realize, but, similar to getting into a sub-prime quandry, you can also get out of it.

 

You have done good work so far, and Charlotte, if you are speaking of North Carolina, that is in the Mecklenburg County if I recall. Maybe you can see if Insight Staffing has anything, they appear to be off North Tryon St now, maybe or maybe not in an office park. They put me to work at the Snyder's-Lance (now called Tom's Snacks) cracker factory that the Blue line goes straight to at one point. They also have Coca-Cola available, which could be a very good career, if you want it. Nothing but good to say of the owner/manager there, but that's just a small portion of what is out there. There will always be bad experiences, but that is hopefully not the normal. Very nice place and area, still affordable if memory serves me well. I am confident you can pull this off.

 

 

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I had a bunch of CCs with balances on them and making just the minimums was killing me.  I was able to get a loan through upstart that has a lower APR and I consolidated all of my payments into one.  You can have them draft a payment bi monthly which works well if you get paid every 2 weeks.  I have done pretty well with that, and have vitually no CC balances now

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On 8/13/2019 at 8:08 PM, Lwhit1231 said:

Hello all!!

 

I will try to make this as short and sweet as possible. I used to make much more money than what I am currently making. Never paid late on my cards until recently and I’m still never more than a few days late. My cards are all maxed out and it’s costing so much to keep up with everything. I thought about going on the hardship program with my cards but I think that might have a negative affect on my credit. My utilization is at 99%.  I just don’t even know where to start. I would love to just work on getting the balances down because I feel like the hard work will stop me from charging the cards up again. I have 9 cards. And I have no lates reported as I’m never more than a few days late.  

GAP-200

JCP-500

CapOne-600

Citi-900

Walmart-1780

Macys-2700

Chase-3000

BCU-5000

Amex-5000

 

Any advice would be appreciated!!

While he's not a popular source of financial advice on here (and that's being generous), given that you are being hit with late fees etc currently I would do the Dave Ramsey debt-snowball approach - at least on the small accounts up-to and including the Wal-Mart card.  I would pay off the smallest cards first (and cut them up to prevent the temptation of using again, but don't necessarily need to close the accounts - hopefully by the time you have all the debt paid off you can request new cards be sent to keep tradelines open as they are nearing the closure points by the creditors).  

 

As others have suggested I would work on a budget to eliminate any frivolous expenses and look at eliminating any bad/costly habits (eating out, tobacco/alcohol use, driving around aimlessly, entertainment expenses) until you can reward yourself with those "perks" once things are in control - and set goals and treat yourself when milestones are hit and that will help you keep yourself accountable and have things to look forward to during your journey.

 

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You can always call some of these lenders up too and explain what you're trying to do and how you want to work towards paying off these high balances. Sometimes they have plans you can take advantage of and other ways to make it even easier at chipping away at all these cards that you owe.

 

Focus on the primes first like Chase and Amex so you can remain in good standing with them. For the store cards, once your utilization is lower, you might want to consolidate that debt as well given how high those APRs could be. When you're out of debt, never forget about this experience. Use it as an opportunity to use credit responsibly and to PIF as much as possible. 

 

There are debt management programs out there as well where you list all these cards you have and you get them all under one payment, but depending on who you go with, it can still be on the expensive side to have that huge monthly payment upfront. 

Edited by greenpotatochips

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