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Posted (edited)

Hey guys. Looking for some advice. Have about $40k in credit card debt, a $12k personal loan, and a car loan wrapping up with around $1600 left. Credit is right around 660 with the only problem being my current utilization of around 75%. My wife is a nurse and over the last 4 months has busted her hump working extra shifts. That, along with incentives, bonuses, and hazard pay have allowed us to put aside about $15k. We'd like to use this to fast track our debt payoff plan. In order to do anything like get a new low or 0 interest BT card, or possibly a large installment/consolidation loan we would need to boost the credit score a little higher. What's the best bang for the buck in this situation? Our goal is to pay it all down ASAP. The more money we can free up on a monthly basis, the more money we can put towards these debts. Also, most of these cards are close to 20% interest rate (if not more) so again, the less that we can spend on interest the more we can spend on principle. I know if my score were 40 points higher we'd have a ton of options. Just not sure the quickest way to get there. Appreciate any help.

Edited by Druknmonkey

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Here's an example...

 

To get a strategy for your personal situation, list your CC info (card, balance, limit, APR) and we can fine tune it for you.

 

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CC info is as follows:

current cards with a $0 balance:

Card Limit
care credit 500
littman 5700
target 1200
capital 1 500
v. secret 550
Home Depot 622

 

Remaining Balance Cards:

Card Balance limit APR
Kohls 958 2200 ???
Barclay 1694 1900 24.99%
Sears 4358 5200 25.24%
Walmart 6759 7900 22.90%
Lowe's 5914 6200 26.99%
Chase 6489 7000 22.99%
Discover 12991 13200 20.99%

 

Personal Loan is at $12,600 remaining @ 14.94% and payments of about $388. Car loan is in the last few months and only has about $1600 remaining. Almost all principle now. We do have a home and mortgage also. Looking at possible refi options to lower our payment, not to cash out but to free up monthly income to pay down debt faster. Util is around 75%, DTI is about 25%, scores are around 660, no collections, perfect payment history. Any other info? We are open to all suggestions. I know there are good ways to get this paid off faster while minimizing the interest paid but not sure where to start or what is best.

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I would pay the highest APR debt first and as fast as possible and let FICO scores be damned until you have everything paid off.

 

Have you read the stickies in the Money Management subforum? There are some good threads on how to reduce expenses.

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I agree with Hege, but if it were me, based on the cards you have listed and the $15k you have for pay down, this is what I would do... Yes, this may sound cray-cray and a gamble.

 

PIF the Discover and pay down the other cards to where each card reports below 90% utilization (don't forget to include interest). You have several that are above 90% which is considered maxed out. After everything reports, request a CLI from Discover. There's a very good chance Discover will give you a decent BT offer, though it may take several months to see one. If I did the math correctly, you're minimum payments on the Discover card are ~$600? That would also free up that monies to be applied elsewhere.

 

This is one option :)

 

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Adding some more info:

Card Balance Limit APR Pmt Util
Kohls $958.00 $2,200.00   $34 44%
Barclay $1,694.00 $1,900.00 24.99% $57 89%
Sears $4,358.00 $5,200.00 25.24% $143 84%
Walmart $6,759.00 $7,900.00 22.90% $207 86%
Lowe's $5,914.00 $6,200.00 26.99% $191 95%
Chase $6,489.00 $7,000.00 22.99% $189 93%
Discover $12,991.00 $13,200.00 20.99% $260 98%

 

Paying almost $1100 per month just in minimums plus the $377 on the personal loan. Wouldn't it be better to boost the score enough to either get a personal loan at a good rate and then consolidate it all, or open a new large card and balance transfer some funds to a 0 rate? My DTI is low enough that i have room for more credit if my score would just come up a little. I'd hate to have a low credit score the whole time we're working on this. Never know when something comes up and i'll need it.

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Kohl's is going to have a high rate like the other store cards.  

 

With $15k you can wipe out Kohl's ($1k), Barclays ($2k), Sears ($4k) and Lowe's ($6k), plus the remaining car balance.

 

You can then toss the money you're no longer spending on a car payment, along with whatever else you can pay each month, to saw down the balances on the remaining cards to < 70% utilization, then < 50%, etc.

 

 

 

 

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2 hours ago, cv91915 said:

Kohl's is going to have a high rate like the other store cards.  

 

With $15k you can wipe out Kohl's ($1k), Barclays ($2k), Sears ($4k) and Lowe's ($6k), plus the remaining car balance.

 

You can then toss the money you're no longer spending on a car payment, along with whatever else you can pay each month, to saw down the balances on the remaining cards to < 70% utilization, then < 50%, etc.

 

 

 

 

So as far as bringing up the score as I saw away at the others, is it more beneficial to bring down the utilization of each individual card, or just the overall utilization?

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Posted (edited)
45 minutes ago, Druknmonkey said:

So as far as bringing up the score as I saw away at the others, is it more beneficial to bring down the utilization of each individual card, or just the overall utilization?

I'm not sure it will make a lot of difference.  

 

On the other hand, if my goal was to qualify along the way for a BT card or a consolidation loan, I would fear being judged by my ugliest trade line.  Credit score is by far not the only factor that goes into a credit decision.

 

 

Edited by cv91915

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