best way to pay off credit card debt

steveo2155 · April 8, 2017

Due to some unexpected circumstances and financial mistakes, have about $15-20k total on about 4 cards. This amount and problem seems to be somewhat commom but i do not like the feeling. Want to get these taken care of as quick as possible. Any advice on doing this? Personal loan? Balance transfer? Debt settlement? I am open to any suggestions.

StillOffshore · April 8, 2017

I'm sure you will get a bunch of good advice, and some not so good...here's mine, take is as you will...call them. Ask if they would be willing to take a cash settlement to close the account. Explain that you cannot afford to pay them otherwise. May or may not have any luck. Otherwise, start with the smallest balance and pay as much as possible towards that until it is paid. Close the account. Move to the next. Continue to make minimum payments on the others.

Whatever you decide, best of luck to you. Debt sucks. I know things in life happen, but try to pay cash for everything and avoid plastic.

muddkatt · April 8, 2017

Many years ago my dad gave me the following advice, "Son, you can't borrow your way out of debt".

With that said, you need to find a way to get cheap interest. It could be something like a Discover Personal loan, or balance transfers to other credit cards. Make a note of balance transfers because in the fine print, many cards charge a certain percentage of the amount. A CC that has 0% interest for 18 months with a 5% transfer fee is not a bad way to go.

It took you a while to get to this position, and unless you hit the lottery, its going to take some time to get out of it. Don't get discouraged, every month you will get closer to paying it off IF you quit charging on your cards.

calgator73 · April 8, 2017

Look up Dave Ramsey.... Sage advice

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Heavy 5.7 · April 8, 2017

Here's the skinny, I did it you can too.

1. Immediately stop using credit and live within your means everything is cash and bank check/debit card out of your checking account from now on.

2. Itemize your material assets, the ones with the least actual need and highest value should be sold.

3. The card with the highest balance or APR is the biggest thorn in your side right now and needs to go first. Make minimum payments + whatever you can on the other cards. Then pay off the next highest and so on. Starting with the smallest one first is just a crutch and will lead you further into debt.

4. Close accounts on any non essential items like dish, cable, gym membership, etc. Get rid of your expensive wireless plan and switch to either a work phone full time (if permitted) or tracfone.

There are a million others:

https://www.daveramsey.com

O_J_Simpson · April 8, 2017

Good advice here. You can't borrow your way out of debt. Follow Dave Ramsey's plan.

Time for a part time job delivering pizzas until it is gone.

Even better, know how you got there and never go there again.

Edited April 8, 2017 by O_J_Simpson

steveo2155 · April 8, 2017

Many years ago my dad gave me the following advice, "Son, you can't borrow your way out of debt".

With that said, you need to find a way to get cheap interest. It could be something like a Discover Personal loan, or balance transfers to other credit cards. Make a note of balance transfers because in the fine print, many cards charge a certain percentage of the amount. A CC that has 0% interest for 18 months with a 5% transfer fee is not a bad way to go.

It took you a while to get to this position, and unless you hit the lottery, its going to take some time to get out of it. Don't get discouraged, every month you will get closer to paying it off IF you quit charging on your cards.

steveo2155 · April 8, 2017

What is a discover personal loan? Also my highest card has $7k on it with high interest like 22 -25 percent. Even if I did a balance transfer on that one with lets say 0 percent 18 mos, even if I wasn't able to pay off the entire $7k in 18 mos but got a good chunk taken care of, wouldnt i still be better off even if the card went to high interest after 18 mos? Also would you recommend transferring all of the $15k to balance transfer or would the minimum payment be outrageous?

j-ten-ner · April 8, 2017

First thing you do is to destroy your credit cards. All of them. And do it now. Don't even think twice. Gasoline works best.

Next, you'll have to budged your money. Income vs. expenses. Real expenses. Like rent, groceries, insurance etc..

A truck payment is not an expense. It's luxury. Same with the latest product in the cell phone industry.

Vacation? Forget about it.

Maybe you have to move to a cheaper place. Maybe you have to find a new grocery store.

Meatloaf instead of steak is the idea behind it.

Pay off your debt. It might take years.

But you'll be debt free and you've learned a lot about how to handle money.

so long

j-ten-ner

Edited April 8, 2017 by j-ten-ner

KARNUT · April 8, 2017

I did the credit card thing in my early 20s when I got my first good paying job. I couldn't wait so upgraded and charged everything. I soon realized the interest I was paying alone I could have save would have paid for everything I bought in few months. I learned to be thrifty consolidated and became debt free. That experience put me on a path to early retirement, rental property and everything I ever dreamed of. All on middle class income.

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66deadhead · April 8, 2017

After being 20-25K in credit card debt due to a very nasty divorce, as she racked all my cards up to the max. I found if your just trying to pay off your credit cards, a consolidation loan would probably be your best bet. Providing your credit is still good enough to get one. ( mine was not due too missed payments per the Ex) If you go this route you will wanna stop using your credit cards immediately.

2 cd option would be that You can try to settle with the credit card companies to lower your balance. If you settle with a credit card company for a lower balance though, it will usually kill any remaining good credit you have, to the point you won't be able to buy a pair of shoestrings on credit, even if you wanted too. If this is not a option, I suggest you you start with your lowest amount card first and pay it off and only paying you minimum payment on the others until the lowest is paid off. Then go to the next lowest and pay as much as you can monthly on that one till it's paid off, continuing to pay minimum payment on the others. If you keep doing this you will eventually get to the last/ highest card and be able to pay as much as you can monthly to pay it off completely.

Keep in mind, this will take a long time, and you will have to focus and be persistent, and continue to make good financial choices in the meantime. (There will be many sacrifices, and you will basically have to live off only the cash you have available). It took me 5-6 years to do this and get completely debt free and start to rebuild my credit. But it was well worth it. And I do not own a credit card to this day. As I don't need to. I bank all my cash in a savings account and draw from that when needed, and replenish it on the next payday when I'm able.

It can be done, and I wish you the very best of luck with your financial troubles.

KARNUT · April 8, 2017

Wow, if it can be proven she made the charges by what was bought she should have had to pay. That's just wrong.

arkenzo · April 8, 2017

The best method that worked for me was to pull a line of credit on one of my properties to pay off $17,000 in CC debt. I then took advantage of the banks interest rate discounts like having a checking account with the bank on auto pay, as well as a direct deposit monthly on that checking account, this allowed me to have an interest rate of 7.13% and really make a difference in lowering my debt. Instead of paying an interest rate of 20%, 23.99%, 18% etc...with the different cards, consolidating the debt into a low interest monthly payment really helped. Plus I can use the LOC in case of an emergency.

Good luck buddy.

edit#1, after debt consolidation, DO NOT USE THOSE CREDIT CARDS UNLESS AN ABSOLUTE EMERGENCY. and as long as they don't have a yearly fee, don't close them. Will help with your FICO score if you ever need it.

Edited April 8, 2017 by arkenzo

66deadhead · April 8, 2017

Wow, if it can be proven she made the charges by what was bought she should have had to pay. That's just wrong.

It was proven, but it was a bit more complicated than that. To finalize the divorce and to be able to get the house sold before it went to a sheriffs sale, (as she basically stopped paying everything ) and umong many other problems to avoid a complete nuclear shitstorm, like lowering the house price to sell quickly, and taking a hit on that too. (= more debt/money owed) I had to agree to each of us paying the credit balances that we had in our own names. I was an inch away from claiming bankruptcy, but my lawyer strongly directed me not to do that.

I couldn't even retain a realtor to sell the house without her signature, due to the fact that we were still married and everything was joint. Even though she was the only one still living in the house and missing her share of the mortgage payment as a regular monthly occurrence.

Like I said, it was really nasty. Not enough money in the world to walk in those shoes again.

KARNUT · April 8, 2017

It was proven, but it was a bit more complicated than that. To finalize the divorce and to be able to get the house sold before it went to a sheriffs sale, (as she basically stopped paying everything ) and umong many other problems to avoid a complete nuclear shitstorm, like lowering the house price to sell quickly, and taking a hit on that too. (= more debt/money owed) I had to agree to each of us paying the credit balances that we had in our own names. I was an inch away from claiming bankruptcy, but my lawyer strongly directed me not to do that.

I couldn't even retain a realtor to sell the house without her signature, due to the fact that we were still married and everything was joint. Even though she was the only one still living in the house and missing her share of the mortgage payment as a regular monthly occurrence.

Like I said, it was really nasty. Not enough money in the world to walk in those shoes again.

Damn, sorry to hear that.

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Edited April 8, 2017 by KARNUT