How can I pay my credit card off in 12 months?

Question

Ok, I have a HUGE credit card bill...like, 15k. i have only one credit card, so this is it. i take home about 2,600. i have a home, i have been investing for 3 years in my Roth IRA and 403b.

so far i have put my car up for sale for a less expensive car, that will make my payment about 1/2. i've also cancelled my retirement contributions for this year (i know that's bad but that's my motivation...to get back on track and contributing again ASAP) and i have taken a roomate who will may about 1/3 of my mortgage and 1/2 the bills.

i'll have about 1,100 a month after i've covered all my bills. but obviously i have to buy food and gas. i've already informed friends to NOT ask me out for dinner, etc... and i don't need any clothes for work or anything.

i feel like i've done all that i can as far as freeing up my income to start attacking this bill.....yet it's not enough!!! i'll still be doing this for maybe 2 years...but i need to get it done THIS YEAR.

maybe.....can i get the money out of my roth? i know that goes against everything they tell you...but i was just thinking that's the only other bit of money i have! is that even possible? and there is no reason a debt management agency would help me...i have money to pay, and my interest rate is already like 13%, i don't miss payments...they don't have any reason to cut me a break.

thanks for all the earnest advice...i really appreciate it. the reason for paying it off within the year is that my boyfriend and i would like to get married within the year, and i don't want him responsible for my financial issues. i'd like for us to have the option of moving, without being tied down by debt and monthly obligations.

Answer 1

Maybe you can get a "consolidation" loan from your bank.
A loan from them would SURELY have a lower interest rate than your card's---and they will be more willing to work with you.

I doubt you'll ever pay it all in 12 months, but as determined as you are, you will make a lot of progress.
Take this as a HUGE lesson---credit cards are TERRIBLE!!!
They aren't in business to HELP you, they want to OWN you through minimum payments and huge interest on your debt.

Answer 2

The drawback to IRA withdrawals is the penalty of 10% on top of the taxes that will result .
The net cost will be greater than the % you are paying on the card .

Can you get by on $400 food and gas ?
That leaves $700 for the card , and the % right now is about $225 a month if it is an 18% .

Any chance of doing a transfer to a 0% for 1 year offer ?
That would let you put an extra $2700 towards the principal . . . or $8400 total over the year .
That would leave a $6600 principal to deal with .

The only other suggestion is a 2nd job ( I did that for 10 years ) . And if you get it in a restaurant , you get a free meal each shift too !

Sounds like your plan is solid , just that it will take just under 2 yrs to do instead of 1 .
Why is this year mandatory ?

Best wishes

>

Answer 3

Can you get another job? Your only option now is to increase your income somehow. Work a night shift somewhere or during the weekends. Then spend ALL of that money towards your debt. Assuming you need about $600 for gas and food, You need to get another job where you can net $1000 a month after taxes. Coupled with the $500 extra you have from your current job, you can pay off your credit card in about a year.

Answer 4

I just started a part time job delivering pizza to pay of my credit cards. In 2 days I have worked 5 hours, driven 57 miles, and collected $50 in tips alone.

My interview consisted of the following questions in this order:
1. Can you start today?
2. How is your driving record?
3. Do you have reliable transportation?
4. What size shirt do you need?

Note: They asked when I could start BEFORE asking if I could drive.

Someone suggested putting the credit card in a safe deposit box. That costs to much. Cut the top off a milk carton. Fill it with water. Drop the card inside. Freeze the carton. IF you absolutely need the card, you can get at in in about an hour. Otherwise, it will be a pain to misuse the card.

Answer 5

So you should have about $800 to throw at that credit card and you need about another $500.

Look closer at your budget. You might be able to squeeze some more out of it. Look at your phone bill. Do you really need call waiting, call forwarding, and those other special features? Are you paying a line maintenance fee? Can you cut the cable/internet bill?

How about setting your thermostat a little higher in summer and lower in winter to save on the utility bills.

Increase your car insurance deductible to cut insurance costs.

You could always get a second job. Pizza delivery seems to be flexible hours and you get tips ... not to mention free leftover pizza.

Answer 6

Hey weechi,

First you should put your credit card in a safety box at the bank. (on the weekend if you get kinda helpless you wont have it to add more) As soon as your card realizes that your trying to pay it off they will give you another increase! (to try an lure you in)...Dont listen to the other people on here saying to email them an they can help you I am certain they are going to try and make it worse. If you pay things with cash at the store then save your change too in a jar....In a few months you should have a few hundred saved also...I did... Also adding a roomate may make your expenses even higher as in electric, water, phone and stress. I tried that too. I ended up paying more in bills like 300 a month..

Answer 7

There is no tax penalty to take money from a ROTH, as you paid taxes on the money before putting it in (the penalty applies to regular IRAs). So, if your ROTH is bringing in 6%, tax free, and your credit card is at 13%, you're still in the hole every month. Take the money and pay off the card, then put all the money you would have used to pay the card back into the ROTH every month. You'll feel so much better having that card off your back.

Answer 8

Being someone who got where you are once....You need to first figure out how you got where you are now....You also need to track your spending....Once you have an idea of what you can do, Explore Consure Credit Counseling...It is free and a non profit...The will lower your interest rate, and your $1000 will go a lot farther..

Answer 9

Unless you stop charging and are able to make monthly payments of at least $1,500, it's not possible.

Answer 10

Why do you "NEED" to do it this year? Only other option to accelerate payoff is 2 get a second job