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Rapture Echo · 06-02-2010, 04:49 PM

So my fiancee has around $20,000-30,000 (I don't know the exact number) in credit card debt spread out over 5 cards. She has very good credit and he always pays them on time. She makes more than enough to cover her payments but isn't making a lot of progress on them. She has changed her spending habits and makes more than the minimum payment.

What do you think would be the best course of action?

chestercheeto48 · 06-03-2010, 10:50 AM

Is she making the minimum payments or paying more than the min? Does she have a savings account?

What I did with mine was to make sure I made the minimum payments on all the cards every month. I then picked the one with the smallest balance (card a) and made the larget payment I could every month. Lets say at the end of every pay period I had 100.00 left over after all bills including card a were paid.

I would put 50.00 of the left over into savings and put the other 50.00 into paying off that card a. Once the card a was paid off I then rolled that entire payment amount for card a into paying off card b. Once card b is paid off then roll a and b into card c and so on and so forth. It takes a little while to get going but it sounds like she is handling her bills and not being late on them. This is how I paid off my car loan -> then credit card -> now I am working on student loan. In the mean time I have also saved up roughly 5 grand in savings as well. once those payments are done I am going to work on making an extra payment or two a year on my mortgage.

There are a million solutions to the question this is just mine.

-chester

briansol · 06-03-2010, 07:30 PM

The best thing to do is to pay as much as you can every month and at the lowest interest rate.
Transfer cards to 0% intro cards and when those 6-12 months are over, transfer it again. The hardest thing to pay down is the interest. If you factor that out of the eqation, you can make some serious progress on the principal.

The long term goal here is to keep her out of the shoe/purse store

Rapture Echo · 06-06-2010, 09:48 PM

Thanks for your input guys

Right now she makes a little more than minimum on all her cards. But the saving idea sounds like a good idea. To where she could save a bit and pay one of the cards in one fell swoop and at the same time have extra fall back money just in case.

And i'll look into transferring the cards into new ones. Now would I keep the same amount of cards or would I want to do some consolidation? And any recommendations of companies I should go with?

And I feel you on that on that one brother. Purses and shoes can do some serious damage. She has been good though she hasn't put anything real on her card for quite some time

chestercheeto48 · 06-07-2010, 12:28 PM

Are you worried abou her credit score? If so then closing some of the cards may adversely effect her score depending on how long she has had them. I would also recommend against get a new card simply to consolidate them for two reasons. 1) the chance that she might max out the new card as well. and 2) you only have a limited time to pay off the balance or you are hit with more finance charges. These companies don't let you just transfer balances for the charity of it. If they aren't making money off it they wouldn't do it. I would recommend that you choose the best method possible for your situation and get them paid off as soon as possible.

briansol · 06-07-2010, 11:09 PM

In the credit crunch we are in, it is not uncommon for folks to have cards closed on them after they are paid off.
In fact, it happened to me a few months ago.
I have (had) a discover card that i never really used. It was my emergency back up card just in case with about a $3000 limit on it. (lost, need a hotel, tow, etc). I had no balance on it for about 2.5 years. The other month I got a letter saying they are closing my account down due to lack of activity and other debts on my credit score (my house, my cars, etc etc). Basically, they got out while they still could due to all the people failing to pay their debts in these tough times.

So, that's something to consider. If she pays it all of, she may end up without any credit cards at all.
The best thing to do is to keep one or 2 with minimal balances... buy gas once a month with it, etc.

The balance transfers usually incur a fee, 3% or $250 max on most cards. Since you're talking 10 grand + here, there interest alone for one month is more than 250, so it's profitable to them right out the door and if you miss a payment, late, etc, they default you to 25%+ like usual. So, it's best to always be on time and have a new 0% card applied for and ready a month ahead of time. Paying 250 again and again still works out to be WAY cheaper than interest over the course of a year.

Rapture Echo · 06-12-2010, 05:21 PM

Well thank you both for your input I'll show my fiancée what both of you have to say and i'll see what she says from there. I'll keep you posted

briansol · 06-12-2010, 08:56 PM

Good luck!

06-02-2010, 04:49 PM	#1
Rapture Echo Greenhorn Join Date: Jun 2010 Posts: 4 Rep Power: 0	Credit card debt So my fiancee has around $20,000-30,000 (I don't know the exact number) in credit card debt spread out over 5 cards. She has very good credit and he always pays them on time. She makes more than enough to cover her payments but isn't making a lot of progress on them. She has changed her spending habits and makes more than the minimum payment. What do you think would be the best course of action?

06-03-2010, 07:30 PM	#3
briansol Savings Advisor Join Date: Aug 2006 Location: Central CT Age: 32 Posts: 761 Rep Power: 7	The best thing to do is to pay as much as you can every month and at the lowest interest rate. Transfer cards to 0% intro cards and when those 6-12 months are over, transfer it again. The hardest thing to pay down is the interest. If you factor that out of the eqation, you can make some serious progress on the principal. The long term goal here is to keep her out of the shoe/purse store __________________ Any thoughts or opinions are that of my own. Research your buys and sales on your own. I am not a stock broker.

06-07-2010, 11:09 PM	#6
briansol Savings Advisor Join Date: Aug 2006 Location: Central CT Age: 32 Posts: 761 Rep Power: 7	In the credit crunch we are in, it is not uncommon for folks to have cards closed on them after they are paid off. In fact, it happened to me a few months ago. I have (had) a discover card that i never really used. It was my emergency back up card just in case with about a $3000 limit on it. (lost, need a hotel, tow, etc). I had no balance on it for about 2.5 years. The other month I got a letter saying they are closing my account down due to lack of activity and other debts on my credit score (my house, my cars, etc etc). Basically, they got out while they still could due to all the people failing to pay their debts in these tough times. So, that's something to consider. If she pays it all of, she may end up without any credit cards at all. The best thing to do is to keep one or 2 with minimal balances... buy gas once a month with it, etc. The balance transfers usually incur a fee, 3% or $250 max on most cards. Since you're talking 10 grand + here, there interest alone for one month is more than 250, so it's profitable to them right out the door and if you miss a payment, late, etc, they default you to 25%+ like usual. So, it's best to always be on time and have a new 0% card applied for and ready a month ahead of time. Paying 250 again and again still works out to be WAY cheaper than interest over the course of a year. __________________ Any thoughts or opinions are that of my own. Research your buys and sales on your own. I am not a stock broker.

06-12-2010, 08:56 PM	#8
briansol Savings Advisor Join Date: Aug 2006 Location: Central CT Age: 32 Posts: 761 Rep Power: 7	Good luck! __________________ Any thoughts or opinions are that of my own. Research your buys and sales on your own. I am not a stock broker.

06-03-2010, 10:50 AM	#2
chestercheeto48 Greenhorn Join Date: Jun 2009 Posts: 7 Rep Power: 0	Is she making the minimum payments or paying more than the min? Does she have a savings account? What I did with mine was to make sure I made the minimum payments on all the cards every month. I then picked the one with the smallest balance (card a) and made the larget payment I could every month. Lets say at the end of every pay period I had 100.00 left over after all bills including card a were paid. I would put 50.00 of the left over into savings and put the other 50.00 into paying off that card a. Once the card a was paid off I then rolled that entire payment amount for card a into paying off card b. Once card b is paid off then roll a and b into card c and so on and so forth. It takes a little while to get going but it sounds like she is handling her bills and not being late on them. This is how I paid off my car loan -> then credit card -> now I am working on student loan. In the mean time I have also saved up roughly 5 grand in savings as well. once those payments are done I am going to work on making an extra payment or two a year on my mortgage. There are a million solutions to the question this is just mine. -chester

06-06-2010, 09:48 PM	#4
Rapture Echo Greenhorn Join Date: Jun 2010 Posts: 4 Rep Power: 0	Thanks for your input guys Right now she makes a little more than minimum on all her cards. But the saving idea sounds like a good idea. To where she could save a bit and pay one of the cards in one fell swoop and at the same time have extra fall back money just in case. And i'll look into transferring the cards into new ones. Now would I keep the same amount of cards or would I want to do some consolidation? And any recommendations of companies I should go with? And I feel you on that on that one brother. Purses and shoes can do some serious damage. She has been good though she hasn't put anything real on her card for quite some time

06-07-2010, 12:28 PM	#5
chestercheeto48 Greenhorn Join Date: Jun 2009 Posts: 7 Rep Power: 0	Are you worried abou her credit score? If so then closing some of the cards may adversely effect her score depending on how long she has had them. I would also recommend against get a new card simply to consolidate them for two reasons. 1) the chance that she might max out the new card as well. and 2) you only have a limited time to pay off the balance or you are hit with more finance charges. These companies don't let you just transfer balances for the charity of it. If they aren't making money off it they wouldn't do it. I would recommend that you choose the best method possible for your situation and get them paid off as soon as possible.

06-12-2010, 05:21 PM	#7
Rapture Echo Greenhorn Join Date: Jun 2010 Posts: 4 Rep Power: 0	Well thank you both for your input I'll show my fiancée what both of you have to say and i'll see what she says from there. I'll keep you posted

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