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Credit card debt


Johny Utah

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The Women was out of work for a while and i have a lot of credit card debt now. Whats the best way to get out of it without hurting my good credit? Maybe get a 0% credit card and transfer to that?

 

That would be a good way to do it, if you can pay it off within the time that it is 0%. There are some kind of fees up front on transfers, but I'm not sure how much.

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What kind of debt are we talking about here? It's difficult to make appropriate suggestions without knowing the level which we are asked to address.

 

As a general debt strategy, I like the Dave Ramsey method.

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Do a zero percent card or even two and set up an auto pay to insure you never miss one. Pay as much as you can extra each month to pay that shit off. Each month payment goes in take a turn kicking each other in the privates to remind you of the pain. Lastly, never use cc.'s again. Cash or fail. Good luck.
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You need to make a budget and stick to it. I like to use excell to lay things out, but maybe that's just me.

 

Living expenses = Rent/Mortage, utilities, food (groceries) etc = $a**

Car = Payment, insurance, gas = $b**

Fun money = $c ***

Savings = $d ***

Remain = credit card payments = $e

Take Home = a+b+c+d+e

 

**While these are fixed expenses, you can slowly whittle these down. It can take years to get where you want, so every little bit can help. I've personally paid off a car, student loans, and now we've got a nice cushion, some money for a car, a vacation savings and a very nice chunk for a down payment on a house. But this has taken about the last 4 years to do. So if you can make your rent less next year, then move that part of your budget to something else, it will have a measurable impact on your long term finances. If you can spend $150 less/month in these areas, lets say cutting cable and going to internet only ($50/month) and reduced rent (%100/month), that's an extra $1800/year to go towards something else (credit card debt or savings), or $7.2k over a 5 year term.

 

*** Fun money + Savings should be low FOR NOW since you NEED to pay off credit card debt. You should not completely cut either of these out, unless you are in a really bad place financially. It doesn't sound like it's that bad yet. You can just sit in your house. And having some small (automatic) savings now will get you into the habbit. Then when you can pay of your CC debt, you can just transfer that chunk over to savings to work on other things.

 

The next thing to do after you pay off credit card debt is to save some kind of buffer. The general rule of thumb is 6 months of expenses. This will be in case shit hits the fan again, like it did now, then you won't have to use credit cards again.

 

Then you can start saving for big items you want, vacations, car parts, even cars and houses.

 

Do all of your savings (and an account for paying of CC dept) automatically. If you get paid every Friday, have $x go into those accounts every Friday.

 

It's really nice to put the hard work to get to that point and be able to pay for things in cash and not have a care about paying off credit card dept.

Caveat: This is just what I've figured out works for me, but it's probably the common advice you will get in this situation. Figure out some kind of system that works for you and stick to it. If you just go into it blindly, it will happen much slower than if you sit down and make a plan.

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/\/\

 

Good plan. Lot of it boils down to self discipline as well. Methods and various means to do are all well and good but have to set a game plan and HOLD yourself to it. And it won't happen overnight, it will prob take years. But it can be done.

 

I used a similar method ( including Excel lol ) to dig myself out of heavy debt I got myself into when I was an idiot teenager with too many credit cards and a taste for cars. Took me a few years but now have zero debt minus mortgage. One of the best feelings EVER to pay off all your debt.

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Using a 0% transfer promotion is a good option. Even if you can't pay it off in the promo timeframe, you should still come out ahead in the end. A 3% transfer fee essential becomes a 3% APR, or less if the promo term is longer than 12 months, and 3% APR is less than the current on the card.
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Its one card and its a lot of money on it. I think im going to try the Discover card 0% for 18 months. Hopefully they will aprove it. Maybe i can get lucky and get it paid off in that time frame.

 

If you are not planning on paying it off in that time frame its not worth it. You will get hit with the initial balance transfer charge then at the end if even a dollar is left you will get hit with 18 months of interest at whatever rate they give you on the WHOLE initial transfer amount.

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If you are not planning on paying it off in that time frame its not worth it. You will get hit with the initial balance transfer charge then at the end if even a dollar is left you will get hit with 18 months of interest at whatever rate they give you on the WHOLE initial transfer amount.

 

This.

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If you are not planning on paying it off in that time frame its not worth it. You will get hit with the initial balance transfer charge then at the end if even a dollar is left you will get hit with 18 months of interest at whatever rate they give you on the WHOLE initial transfer amount.

 

I've never let one mature, but if that is the case that would suck.

 

However, doing a partial transfer, an amount that you know can be paid off in the time frame will still be beneficial.

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If you are not planning on paying it off in that time frame its not worth it. You will get hit with the initial balance transfer charge then at the end if even a dollar is left you will get hit with 18 months of interest at whatever rate they give you on the WHOLE initial transfer amount.

 

I did not know that. Well thats worth the risk then.

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However, doing a partial transfer, an amount that you know can be paid off in the time frame will still be beneficial.

 

Agreed.

Of course the cc companies bank on you not paying it off.

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If you are not planning on paying it off in that time frame its not worth it. You will get hit with the initial balance transfer charge then at the end if even a dollar is left you will get hit with 18 months of interest at whatever rate they give you on the WHOLE initial transfer amount.
what are you talking about?

 

 

not sure what credit cards you have but i work for discover. How we andd most cc companies work is if you have a bt fopr x amount of months when that ends If your accounts not payed off after your balance transfer ends the remaining balance will then turn into the purchase rate and from then on that balance and ONLY the un paid balance would start getting charged interest monthly just like any other card.

 

they DO NO back date interest

 

you might want to know what your talking about before you go spewing miss information bud

 

 

Agreed.

Of course the cc companies bank on you not paying it off.

 

hell yea we do :fuckyeah:

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I did not know that. Well thats worth the risk then.

 

Do a balance transfer and once the bt ends go to another company for another 0 % interest. and keep doing this untill payed off. might not the best for credit but hopefully you wouldnt have to transfer it but 2 times or so. most companies wil charge you a 0 3 or 5 % fee( alot of 0% apr and 0% fee transfer) some say its not worth it to transfer as you have to pay a fee. but way the options, how much do you pay a month in interest per month vs paying the fee and not paying interest over x amount of time.

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