budget/cc debt

572 Views 4 Replies 5 Participants Last post by annethcz, Feb 19, 2010

merryns.mom

Discussion Starter · Feb 18, 2010

i just added up all of my cc and

i'm 12,000 in debt. good news is i haven't used one in 6 months, so it's a start

okay, (hypothetically), i make 1500 month and i pay 1350 in bills (recurring household and cc min pmts. if my dh agreed to pay for any incidentals (gas, food, clothes, etc), then i have 150/month to put toward one of my cc's. i have several (each with a balance of around 1000+/- and high interest rates).

if i put that whole 150 toward one, i'll only pay off 1 cc this year, and it will take me years to pay them all off, right. am i missing something?

i think my car loan is a serious issue-3 yrs into a 6 yr loan with high int rate and of course it's upside down. even if i could sell it, i would owe $

any advice on where to start

thanks, all of you ladies are such an inspiration to me, i just hope that one day i can be financially responsible and out of debt

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iowaorganic

· #2 · Feb 18, 2010

yes it will take you years to pay them off. Continue to make payments on all and choose either the smallest (ala DR?) or the highest interest rate (what I would do) and pay any extra on that one. That and cut them up.

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MCsMom

· #3 · Feb 18, 2010

Great to hear you have not used them in 6 months!!!! That is such an important first step. It might take a long time, but you can do it!

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nd_deadhead

· #4 · Feb 18, 2010

It must have taken a lot of courage to add everything up - good for you! Taking that big step is a huge start. The fact that you have not used a card in 6 months is fantastic!!

When you think about it - if you were paying NO interest, you would have to make payments of $1000/month to pay everything off in 1 year, so of course it will take years.

The secret - and the challenge - is to pay as much as you possibly can toward the credit cards. Even an extra $5/month will help. Have you tried calling any of the companies to see if they will reduce your interest rate? If you have been making steady payments, and threaten to cancel the card, they might be willing to work with you.

As iowaorganic said, make minimum payments to all the cards except one - and make the biggest payment you possibly can on that card. As soon as the first card is paid off, apply that payment to the next card, and so on - this is called snowballing, and once the first one is gone, the rest go faster and faster.

If you start with the card with the smallest balance, you see the snowball effect sooner; if you start with the card with the highest interset rate, you pay less in total interest. Either way, the faster you can pay off that first balance, the better!

Good luck!

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annethcz

· #5 · Feb 19, 2010

Yes, it probably will take years to pay off. But if you pay as much as you can, the amounts will start going down. The more you pay now, the faster it will be paid off.

I'd probably put the extra $150 towards the card with the highest interest rate, but that's just me.

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