Credit Card question...?

Question

I currently have four credit cards that I am trying to pay off...I used one credit card that has no interest to pay two cards off. But here is my issue...I just got my taxes done and I owe over $2000 to the Fed and to the State and I feel that I have no choice but to use one of my credit cards to pay it all off. Can someone tell me how I can get ahead on all of my credit card payments? I currently send twice the minimum amount if not more on all of my credit card payments...but I am unable to save money for a rainy day.

I dont want to have any credit cards anymore because I feel that I am behind and stuff and I really want to get ahead and start saving money...

Any advise would help...

Thank you in advance.

Answer 1

You sound like you are on the right track by sending in more than the minimum but you may have to put that tax bill on a card.. Uncle Sam wants his ..no matter what. I think you can contact the IRS about a payment plan with them but pay attention to the interest..maybe the card would be less???? In the mean time, STOP using the cards and concentrate on paying off ONE. either the one with the lowest balance or the one with the highest interest rate.. only you can calculate which is best for you...make the minimum on the others if you must and then when one card is paid off put that money on the next smallest amount and so forth..don't find ways to spend that first payment on anything else. I would suggest you look at your budget and see if you can squeeze out even 5 or 10 dollars a week to put in savings...every week... It would benefit you in the long run to put that on a bill BUT it might be a good psychological boost to see SOMETHING in savings..good luck

Answer 2

I've been in your shoes, and you CAN pay off your bills. First, DON'T USE THEM!!! You can arrange payments to the IRS without penalties. You only have to FILE by 4/15. Second, pick the card with either the lowest balance or highest interest rate (if they're close) and target it to be paid off first. Send the other cards only the min and send the one card extra money every chance you can. It'll be gone before you know it - then cancel the card and close it. Move on to the next card until they are all paid off. I recommend keeping one card for an emergency, but negotiate a low interest rate with the CC people.

There is nothing more important than your credit - protect it by getting rid of debt. Once you've gotten rid of the cards, put all of the money you were paying on CC's into a high-yield account. Also, right now, make sure you are maximizing your 401k match at work; I promise you won't notice the little difference in pay and it's free money for the future.

Answer 3

candid advice isn't for PC sensitive.
take your CreditSLAVE cards put them in a good can with gasoline and burn them. Do it out side the House, please.
get 2nd and 3rd partime jobs work until u can't and then get up and do it some more.
file an extension, no reasons needed on Feds, will give you until August to pay the Feds.
don't know about State just work extra , turn off Cable or any frivolous costs(starbucks) and save.
now let us address the disease not the symptoms. visit daveramsey.com to learn what the bankers pray you never ever learn and apply. then do it learn to own/manage your money.
credit cards are 21st century SLAVERY been there done that. preach against it.
YOU did not pay off two credit cards youMove the Debt- you still owe.

Answer 4

Read the book The Total Money Makeover by Dave Ramsey.

As far as your issue with IRS, see if you can get on some kind of payment plan with them, and try to pay it off early.

Dave discusses the concept of a debt snowball. List all of your debts from smallest amount owed to largest amount owed. Pay the minimum payment on everything except the smallest bill. Then take EVERY scrap of money you can find, and slam it into the smallest bill until it is paid off. Them move on to the next smallest one.

It is amazing what you can do when you focus all of your efforts on one thing. It's working wonders for my husband and my debt. We paid off $4K last month just by being focused.

Your IRS bill should ALWAYS come first. They have the means to get it from you no matter what.

As far as savings goes, before paying on your debt snowball, save back $1000 for emergencies, but then focus on paying off your debt. Once the debt is paid off you can re-focus your efforts on savings.