Credit Card Debt Options

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Credit Card Debt Options

David White
Edgewood, MD 路 Member since 2014 路 283 posts 路 59 votes

I have credit card debt that I'm desperately trying to pay off. I have a full and part time job but, it still feels like I can't catch up. I was debating about giving a certain credit repair company (I would name it but I'm not sure if this thread will get deleted if I do) a call. They have an option of debt settlement and credit repair. My question is what are the ramifications to my credit if I go this route? Are there any other options I can go with that won't affect my credit negatively? 

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Derek Robertson
Contractor 路 Seattle, WA 路 Member since 2014 路 25 posts 路 13 votes
10y
You need to get your hands on Dave Ramsey's book "total money makeover" and get involved with a local church that is hosting a financial peace university. You got this but you need to believe you can do it. He has countless podcasts and YouTube videos that explain his teachings.
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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent 路 Washington, D.C. 路 Member since 2012 路 17k+ posts 路 30k+ votes
    10y

    I would suggest if you can taking out a low interest personal loan to pay off the credit cards. You will probably be able to more than cut your interest rate in half by doing so.

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    4Reply
  • Mark Holencik
    Investor 路 Coplay, PA 路 Member since 2015 路 404 posts 路 315 votes
    10y

    Your feelings are not facts.  Cut your spending to only necessity's. Then cut your spending again to only necessity's. Each time you do this you will find more to cut. Apply all these cuts to your debt. When you get done with paying off your debt, you will be ready to enjoy life and make good decsions.

    5Reply
  • Derek Robertson
    Contractor 路 Seattle, WA 路 Member since 2014 路 25 posts 路 13 votes
    10y
    You need to get your hands on Dave Ramsey's book "total money makeover" and get involved with a local church that is hosting a financial peace university. You got this but you need to believe you can do it. He has countless podcasts and YouTube videos that explain his teachings.
    6Reply
  • Mark S.Pro Member
    Rental Property Investor 路 KY 路 Member since 2013 路 1k+ posts 路 537 votes
    10y

    Call the card companies directly and negotiate.  Look for introductory balance transfer offers at 0% with low transfer fees.  Pay off the highest interest rate card first while making sure to always make at least the minimum payment on the others.  Good luck. 

    3Reply
  • Frank Jiang
    Investor 路 San Diego, CA 路 Member since 2014 路 592 posts 路 765 votes
    10y

    Post your budget.  Or if you're uncomfortable with that, PM me and we can rip it up together.

    4Reply
  • David White
    OP
    Edgewood, MD 路 Member since 2014 路 283 posts 路 59 votes
    10y
    Originally posted by @Russell Brazil:

    I would suggest if you can taking out a low interest personal loan to pay off the credit cards. You will probably be able to more than cut your interest rate in half by doing so.

     I'm not sure if I can take another loan out due to my debt to income ratio. But I'll give it a try. 

    0Reply
  • David White
    OP
    Edgewood, MD 路 Member since 2014 路 283 posts 路 59 votes
    10y
    Originally posted by @Mark Holencik:

    Your feelings are not facts.  Cut your spending to only necessity's. Then cut your spending again to only necessity's. Each time you do this you will find more to cut. Apply all these cuts to your debt. When you get done with paying off your debt, you will be ready to enjoy life and make good decsions.

    Believe it or not I've cut my spending as much as I can. I guess everything hit the fan when they cut overtime at my job. I only really spend money towards gas in my car to get me back and forth to work. But an opportunity may present itself at my part time job to go full time. By doing that I'll be able to work overtime at that job. They're averaging at least 16 hours overtime a week. I would then quit my other job and devote all my working hours to that. But yes I can't wait for the day my debt is paid off. 

    1Reply
  • David White
    OP
    Edgewood, MD 路 Member since 2014 路 283 posts 路 59 votes
    10y
    Originally posted by @Derek Robertson:

    You need to get your hands on Dave Ramsey's book "total money makeover" and get involved with a local church that is hosting a financial peace university. You got this but you need to believe you can do it. He has countless podcasts and YouTube videos that explain his teachings.

    I'll check his podcasts and YouTube videos out. Also, I'll see if his book is at my library. Thank you for the recommendation. 

    1Reply
  • David White
    OP
    Edgewood, MD 路 Member since 2014 路 283 posts 路 59 votes
    10y
    Originally posted by @Mark S.:

    Call the card companies directly and negotiate.  Look for introductory balance transfer offers at 0% with low transfer fees.  Pay off the highest interest rate card first while making sure to always make at least the minimum payment on the others.  Good luck. 

    Just got off the phone with one credit card company. We set up a payment plan to get caught up on my payments. I always looked at paying the highest balance 1st. Never thought to pay the highest interest rate first. I'll have to find out each interest rate and pay off accordingly. Thank you for your advice. 

    2Reply
  • Mark S.Pro Member
    Rental Property Investor 路 KY 路 Member since 2013 路 1k+ posts 路 537 votes
    10y

    馃憤

    0Reply
  • Account Closed
    Rental Property Investor 路 Vancouver, WA 路 Member since 2014 路 308 posts 路 144 votes
    10y

    I've got a bit of credit card debt as well, and I found a website called Ready for Zero.  It basically is like Mint, but they take all your credit cards, and you tell it what you can pay per month, and it creates a plan for you that will help you get out of debt as fast as possible.  It uses a combination snowball/avalanche approach, and after I read through it's plan for me, it made perfect sense.  Hope that helps!

    0Reply
  • Brian Smith
    Rental Property Investor 路 Shreveport, LA 路 Member since 2015 路 36 posts 路 18 votes
    10y

    I would suggest paying off the lowest debt amount first, then when that one is done you've got debt you can physically check off the list FOREVER. That gives you both rental victory and firepower to tackle the next biggest debt, and so on. Yes, the highest interest rate makes more sense financially, but it's bad habits that got you into this mess and you need good habits to get out of it. Don't try to outsmart your debt or take the easy way out... attack it. 

    1Reply
  • Christina R.
    Investor 路 DMV Maryland 路 Member since 2013 路 867 posts 路 370 votes
    10y

    The fact that you reached out to a company to start working a plan means you're serious.  You can do it.  The flip side is, when you are in the habit of using that money to pay off debt, once the debt it gone.. then that money gets socked away in savings.  By then,  it's like you've never even missed it.

    2Reply
  • Raphaela Todd
    Investor 路 Las Vegas, NV 路 Member since 2016 路 41 posts 路 23 votes
    10y

    You don't need to use a Credit Repair Company at all.   You can easily do what they would (supposedly) do in your behalf.   Just takes a little legwork, but well worth it.

    First, make an organized list of all your credit card debt, balances and the interest rates on each.  List them from highest interest rate to lowest.

    Second, STOP USING THEM.

    Third, get a notebook out and set aside a specified time for you to call each creditor and ASK FOR A SUPERVISOR to discuss your account.   Tell them you are having financial difficulties and need reduce your debt.   You want to "do the right thing" and not start missing payments, so you "need their help."  (People love hearing this).   You can: (1) Ask for a reduction in your interest rate; (2) Ask to waive any built-up interest or fees if you are able to pay in full by a certain date.

    Fourth, another option is to get a low interest rate loan to pay off all your credit cards.  If you are a member of Credit Union they have better rates.  Otherwise, I would suggest that you check out BankRate.com to shop for interest rates and requirements on consolidation loans.    Hope this helps!!

    Above all else ... be firm in sticking to your new budget.   GOOD LUCK!!   :-)

    1Reply
  • Josh Caldwell
    Investor 路 Dallas TX, United States 路 Member since 2014 路 1k+ posts 路 1k+ votes
    10y

    David -  I use credit repair as a big part of my lease option house selling business, It can be a very powerful tool to help you get your life back on track, but you are not ready for credit repair yet.  

    You need to get rid of the debt and work to live below your means before you attempt credit repair.  If not you will be right back where you started and your credit will be crap.  

    If you had already dug yourself out of debt and you had bad credit then credit repair would be a value to you but not yet. 

    To your success

    Josh 

    1Reply
  • Account Closed
    Vendor 路 Brandon, FL 路 Member since 2016 路 71 posts 路 20 votes
    10y

    It sounds like you received the help that you need.  My humble opinion is that you really need to develop budgeting muscles.  I am curious about this and I ask my clients this question all of the time:  Do you look forward to a hefty income tax return every year?  If so, this is an interest free loan that you are providing the government.  I would suggest you sit with a CPA to evaluate this part of your payroll.  It's possible that you can increase your income by opting out of receiving that yearly windfall.  The key is to make sure that you use this additional money for debt and not for fun & games.  Delayed gratification is key, give up the latte ($4 a day x 5 days x 50 weeks = $1000 - ouch, do you really want that latte now?) and finally develop a real relationship with your money.  Become cash focused and use cash instead of swiping your debit or credit card.  The energy of money is far more intense than the energy of plastic.  Trust me, buying a latte with a $100 bill is not something you really want to do.  You'll probably start making your coffee at home. :)  Good luck, you are motivated and that is the key.

    1Reply
  • David White
    OP
    Edgewood, MD 路 Member since 2014 路 283 posts 路 59 votes
    10y

    Hello everyone. Thanks for the all the replies. Sorry I couldn't reply sooner. Yesterday I applied for a $5000 loan to consolidate some bills. Unfortunately I was rejected. I was then directed to a free credit counseling service. I'll look into it next week when I pick up the packet. The lady who handled my loan wanted to know what happened. A couple years ago I applied for a loan and I was considered A+ credit. Now I'm an E (514). I then told her what happened. My girlfriend of 6 years was diagnosed with stage 2 ovarian cancer. On top of that she had no health insurance. So between loans and credit cards she was able to have 3 surgeries, chemo/radiation treatments , and medicine. As of today she is cancer free which is what I care about the most. I don't regret it and I pray no one has to go through it. So it wasn't frivolous reckless spending that got me to this point. I haven't used a credit card since. One particular reason I took the loans out and used the credit cards was due to the unlimited over time at my job. I figured I would be able to pay it off if I worked the hours. Shortly afterwards my job expierenced layoffs and the overtime went from unlimited to manageable/non existent. Anyway, I was able to contact a credit card company. We agreed that I would make 3 consecutive payments to bring my account up to date. I'll continue to contact the other companies. As far as how I'm going to eliminate the debt I have a decision to make. Right now I'm working 64 hours a week between 2 jobs. I'm debating going full time at my part time job and leaving my full time job that I've been employed at for 8 years. There is overtime at my part time job (time and a half and double time) that I can't work because I'm part time. Now I've been doing my research. My friend has been full time and my part time job for 10 years. And due to the industry (food) the over time is always available. My full time job was good because of the over time and benefits. The benefits now suck and the over time is non existent as of now. I could work 2 full time jobs. I just have a feeling that won't last long. I need to make a decision because the opportunity to become full time will be here in June. I'll update if anything else happens. Any feedback is welcomed. 

    0Reply
  • Account Closed
    Entrepreneur 路 Frisco, TX 路 Member since 2015 路 88 posts 路 44 votes
    10y

    It sounds like you already know that you need to make the switch to the job that offers overtime. 

    You are humble in admitting your hardships and asking others for a helping hand. 

    Best of luck to you and your girlfriend. 

    As a side note, consider any kind of jobs where you could increase your income (ex. retail or office work). Then, hopefully you wouldn't need to work more than 40 hours a week. 

    1Reply
  • Alicia R.
    Real Estate Agent 路 Boston, MA 路 Member since 2016 路 13 posts 路 8 votes
    10y

    Hi just came across this thread...you should read Rich Dad Poor Dad..I think owning assets that will make you money without having to "work" for it will help you. there is only so many hours someone can work and taxes are the highest for people who work a normal job, whereas rental income and other passive income is taxed differently (much less). you are in the right place, maybe some real estate venture will help you. i have massive student loans and no amount of overtime will help me..just something to think about. but its good to make a list, just a simple one with all of your debts, the amounts, and work out a payment plan or save up to pay off one in full at time. good luck!

    1Reply
  • David White
    OP
    Edgewood, MD 路 Member since 2014 路 283 posts 路 59 votes
    10y

    I finally had my appointment over the phone with the credit counseling service that was recommended to me by my credit union. After speaking to my counselor, she said I qualified for a DMP (debt management plan). My debt would be paid off in 30 months or sooner. I also found out all my interest rates for my credit cards. The interest is definitely killing me lol. Out of 6 cards only 1 is under 10% and 4 are over 20% with 3 of them practically 30%. I'm going to call and speak to a manager for each credit card and explain my situation. Hopefully we can work something out without me having to do a DMP. I'm still doing my research to see what my best plan of action should be. Does anyone know, have done, or have any information on DMP's? 

    0Reply
  • Alicia R.
    Real Estate Agent 路 Boston, MA 路 Member since 2016 路 13 posts 路 8 votes
    10y

    can u get a 0% balance transfer card and pay one card off in full before the interest rate goes back up?

    2Reply
  • David White
    OP
    Edgewood, MD 路 Member since 2014 路 283 posts 路 59 votes
    10y

    @Alicia R. With all my credit cards being maxed out I highly doubt I'll be able to apply for another 1. But I do plan on doing a balance transfer when I the card with only 9.49% apr is paid off. 

    0Reply
  • Account Closed
    New York City, NY 路 Member since 2015 路 13 posts 路 2 votes
    9y

    I would suggest you sit with a CPA to evaluate this part of your payroll. It's possible that you can increase your income by opting out of receiving that yearly windfall. The key is to make sure that you use this additional money for debt and not for fun & games. Delayed gratification is key, give up the latte ($4 a day x 5 days x 50 weeks = $1000 - ouch, do you really want that latte now?) and finally develop a real relationship with your money.

    Thanks

    VantageAcceptance

    1Reply
  • Nicole A.Pro Member
    Rental Property Investor 路 Baltimore County Maryland and Tampa Florida 路 Member since 2013 路 2k+ posts 路 2k+ votes
    9y

    Hi @David White! How have things been going since your last post? Please update us!

    1Reply
  • David White
    OP
    Edgewood, MD 路 Member since 2014 路 283 posts 路 59 votes
    9y
    Originally posted by @Nicole A.:

    Hi @David White! How have things been going since your last post? Please update us!

    Hello Nicole. Well I must say the majority of my time has been spent either at work, the gym, and my bed lol. But its been well worth the sacrifice. As of today my FICO score is 612. Back on October 25, 2016 my score was 532. I wish I could tell you what my lowest score was but I can only go back 6 months. All my credit cards are up to date with no past due amounts. I continue to not use my cards and I even started contributing money to my savings account. I took the advice on this board and simply called each creditor and told them my situation. All of them gave me an option of getting caught up on my payments. Out of 6 credit cards, 2 of them had closed. The 2 accounts that closed offered me a 0% apr interest rate with 4 and 5 year payment plans. I plan on paying those 2 off earlier then 4 and 5 years though. I also was able to stop a Comcast bill from going to collections by simply paying the past due amount. Most of my credit card payments are automatically withdrawn from my account so I won't miss a payment. That was part of the agreement with my creditors. I have every bill on my calendar on my phone so I know what's due and how much the bill is. I get paid on Friday but, I can view my paycheck on Wednesday. So before I even get paid I simply deduct whatever bill is needed from the money ahead of time so I won't even miss it.

    1Reply
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