Need advice about paying off debt - UPDATE

UPDATE (10/4)

Thanks for all of the suggestions. DH and I decided to go for the snowball method and we transferred some high APR balances to 0% cards.

So far, in approximately 7 months we have eliminated 2 creditors and are on our way to living debt free. It feels GREAT to have extra cash when we need it now ((although, it feels even better throwing it down on high interest cards!!))

We have a plan to get fully out of CC debt in 3 years, and that is overestimating, it could even be sooner! We are even talking long term goals of paying off the car and our mortgage! I wish we had started this years ago!!

Thanks again for the suggestions!!

Message edited 10/4/2012 4:41:10 PM.

Re: Need advice about paying off debt

you could also try to snowball the debt.

Pay the minimum on all cards except one, be it lowest balance or highest interest rate, whatever. Pay the minimum due plus any extra you can to that card. When that is paid off, take that payment apply to the next card, until it's all paid down.

If you're using the cards, stop. Especially the high interest ones. Move to paying to cash whenever you can.

I like to hit the higher interest cards with the higher balances first, DH prefers getting smaller balances out of the way regardless of interest rates.

For me, the interest method makes more sense: two cards may have similar minimum payments, or a difference of only a few dollars, but the interest on a 29% Target card with a 1k balance is going to add up faster than another card with a $400 bal at 29%. I have a spreadsheet which we log all of the cards, the balance, the APR, the minimum due and it totals them all. We use this to figure out what to pay.

Re: Need advice about paying off debt

What's the lowest IR you're getting for a personal loan?

Can you get a 0% card?

If you can get anything at 0% I would transfer as much as you can onto that. I know tfcu has a "teacher's advantage" line of credit at a low rate, 7.5% that you can use as a personal loan. It's a variable rate, but it rarely changes. I would check into credit unions and see what they're offering.

7 cards is a lot. You could probably have that paid off quickly by just consolidating into 1 payment.

Message edited 3/24/2012 3:01:29 PM.

Re: Need advice about paying off debt

Always pay off highest interest rate balances first regardless of balance! That is financial rules 101.

Look for a 0% balance transfer card. Check your mail as the best offers typically get sent via snail mail.

Re: Need advice about paying off debt

I would try and get everything onto 1 card that is 0%, you can get plenty of deals in the mail. I would not take out a loan for only 10K worth of debt.

Re: Need advice about paying off debt

No one needs 7 credit cards. Your credit is good so you should be able to consolidate your current debt into one or two low interest cards. Get rid of the other cards. Decide on a monthly payment amount and stick to this amount as your minimum payment. You should try to pay more than your minimum each month.

Are you continuing to add debt? If you are you need to figure out why and put a stop to it. The goal is get out debt and be in a place where you can use a credit card and pay off the balance in full each month.

Put your remaining low interest cards on ice for a few months. Record your spending and sit down and really look at where your money is going. You will probably be surprised at your spending habits. If you see places you can save do so. Designate this amount as your monthly "Savings".

Take half of your monthly "Savings" and put that towards your current debt payment. Use the other half as Cash for new purchases if you must.

After your debt is paid off try to take at least half 3/4 would be better of what you were paying towards your debt and put that into a real savings vehicle. If you dont have emergency savings set a savings goal and fill that bucket. If you have 401(k), 403(b) plans at work increase your contributions. If you dont have retirement plans at work fund those IRA's.

Good luck if you work at it consistantly you will get that 10,000 paid off quickly.

Re: Need advice about paying off debt

I only have 3500 of debt right now but it was on 3 different cards (all store cards). I did the math and ended up getting a 0% interest card for 18 months. With the balance transfer fee of 3% it was only 100 or so dollars. When I added up the interest each month, it was WAY WAY more after like 2 or 3 months. I did my card through Citibank and they approved me for way more than I need! HTH!

Re: Need advice about paying off debt

I would definitely look for a 0% interest card. See what you get approved for and then transfer the balance. When that runs out, transfer it to another card with 0%

We have about 9k left in cc debt by doing this, a year ago it was 20k so we are on the right track

Re: Need advice about paying off debt

Re: Need advice about paying off debt - UPDATE

bump for update..

Re: Need advice about paying off debt - UPDATE