How do I tackle my credit card debt wisely and more efficiently??

Question

I have 4 credits cards:

(1) - 3300
(2) - 1000
(3) - 500
(4) - 500
(Hospital Bills) - 600

I make 500.00 a week and I do not pay any rent -- only phone (40/mo), car insurance (60/mo), gas (60/mo), ANY ADVICE ON TACKLING MY DEBT ??

Answer 1

Total : 5300, + more than 150$/mo in interest, minimum payment around 260, I guess.

Your earning are 2000 $/ mo.
Spendings are 160 $/mo.

1- Keep 200$/ week to pay for house and go out.
2- Put 200$/week on your debts
3- SAVE 100$/ week. I went with ING, but many other online banks are offering great rates.

You'll be able to use saved money to buy things you need : clothing, new car, travels...

Good luck !

http://index-go.com/finance-savings-account-highest-interest-rates.asp

http://index-go.com/improve-credit-score-get-out-of-debts-fast.asp

Answer 2

1) Pay your medical bills off. They are unlike credit cards which are set up as installment accounts. You only have a certain amount of time before your medical biulls become collection accounts. You DON'T want that.
2) Pay your highest interest rate cards off first (while making your normal payments on the others). In other words, try and make large payments to the cards with the highest interest rates so that you pay them off faster.
3) Here's what I did. I work during the day in an office, but I bartend 2-4 times a month. Lots of tips that I deposit. All that money goes to pay my debt down. Yes, I make several online payments to my cards every month (I also just bought a house and my cards are high now too). Maybe you can get a 2nd part time job to accelerate things...just an idea.

Answer 3

First, you should consider your car insurance a debt IF you are paying interest on the insurance premium still due. You want to get clear whether or not you're paying interest. Look at the car insurance bill, the whole thing, pay stub and extra pages, and if you can't find anything about finance charges, call your insurance broker. Here's a secret if you ARE paying interest: some insurance companies will reduce your monthly interest to zero if you sign up for automatic direct payment through your checking account. Call your insurance agent or broker for the forms.

Next, do NOT close those credit card accounts, even if you pay them down to zero. Myth-busting truth: Closing a cc account can damage/lower your FICO credit score in 3 ways. Moreover, closing a cc account can never help/raise your FICO score. Read more about credit utilization, length of credit history, and credit mix at www.myFICO.com especially "What's in Your Score".

Even if you don't want another loan, why should you care about your FICO credit score? Beware of the dreaded Universal Default clause in the Terms and Conditions pamphlet (i.e., the fine print) for any of the cards. If you do any damage to one creditor's account (call them A) and it lowers your score (getting more maxed out is one way) and creditor B -which has a Universal Default clause- is reading your credit reports, you can trip B's Universal Default clause, and B will raise your interest rates to the Default Rate, even though you've been behaving perfectly with B.

Also, after the cc balance reaches zero, do NOT ignore the following month's bill either: you could be subject to the dreaded two-cycle billing calculation, and might see residual interest the following month.

The hospital bill is top priority if its terms are 'payable in full upon receipt'. If it doesn't show a minimum due, you need to pay it off quickly so that they don't (1) start reporting your delinquency (as little as 30 days) to a Credit Reporting Agency (CRA) and (2) send it to a Collection Agent (CA). You can call the hospital to get the terms clear.

Next, put the credit cards in order by interest rate. Look on each bill for multiple balances at multiple interest rates. This happens typically if you have a low interest rate for your Purchases balance and a high rate for your Cash Advances balance. It's called multi-tiered finance charges. Don't make purchases on a multi-tiered card: it will make the situation worse. Some fine print on the bill will say that they will apply payments to the lower interest balance first, while the high-interest balance continues to rack up interest until you pay off the lower-interest balance first. For purposes of ordering your bills by interest rate, use the highest interest rate that has a balance.

For all bills, pay AT LEAST the minimum due on time, every time. Know the date and time of day the bill is due; read the fine print on the bill for the time or call the cc company. Timely payment is 35% of your FICO score, and a single miss can seriously damage your FICO score (think: Universal Default). Pay extra funds toward the bill that has the highest interest rate (APR). If the interest rate is equal on two different bills, choose to pay down the one having a two-cycle interest calculation instead of single-cycle. If you pay off creditor X and creditor Y has the next highest interest rate, next month, take the amount of money you had been paying X and add it to the usual payment to Y.

Pay cash for new purchases, and only if you need them.

Save your paid bills and bank statements for 7 years, then shred them (identity theft). They're handy if a Collection Agency comes out of nowhere to bother you.

Please vote: Did this help?

Answer 4

stay current on all. Pay off the medical first. Then the 500 bill.on up the ladder. In doing so start a debt snowball. It works like this -- pay as much as you can on the medical until gone then add that to what you are paying on the 500. When it is gone add all that you were paying to the next 500 and so on and so on. It will take you a couple of years to get this done but after it is the put away 1000 in an emergency fund. Pay cash for every thing

Answer 5

Unless you are leaving out information, this should be a piece of cake. You make $2000/month and your expenses only total $160/month. That means you can put roughly $1840/month towards your debt. You will be out in 3 months so it doesn't really matter that much how you do it (as long as you pay the medical first because they will take you to collections QUICK).

Answer 6

Pick the smallest credit card bill, and try to make extra payments on it. When it's paid off, roll those payments to the next, and keep paying the same payment, plus what you were paying on the first one, like a snowball effect. If you get rid of the smaller ones first, you'll feel accomplished. If you could pay $125.00/month (+ interest) on a $500.00 balance, it would be paid off in 4 months.

Answer 7

set up a set amount to pay - my suggestion is $800/mo, b/c after taxes and food, that is a reasonable amount

call up the med people and try to work out a plan with them ($100/month)

pay off the highest rate cards while paying the minimums on the others

It will take you a year, but you'll be out

Answer 8

I suggest you to join a debt settlement company. They will negotiate with your creditors and bring down your principal debt by around 30% to 70% depending on your credit cards.

Your debt of $5,900 will be reduced to $3,540 and you can be out of debt within 12 months by making a monthly payment of $350.00

I think that will be affordable for you. There are no hidden costs,penalties, and upfront costs associated with this monthly payment.

Check out this debt settlement company.

http://www.debtfreeafterall.com

Good Luck

Answer 9

starytwith the one with the highest interest rate...pay as much as you can on that one each month, and minimum on the others. When the first one is paid off, take all that payment and apply it to the second highest int. rate, etc. It worked for me...also, psychologically, it felt good to pay one off, even if it wasn't the biggest one. THE MOST IMPORTAN THING:
STOP using them! Cancel all if you can, keep one for emergencies if you must, but nowadays a debit card will do for online transactions, etc.

Answer 10

Make sure to pay the ones with the highest interest off first! And if at all possible, consolidating may be the best option, especially if you have high interest rates.