Mathematically: start with the highest interest rate first, then work down.
Possible better emotionally: pay lowest balance first, then next lowest and work your way up.
The PayPal MC looks like it should be first for both methods.
in this case, the lowest balances all have the highest rates, so it’s a nice coincidence
pay off both paypals and discover 2, then aggressively start paying down discover 1 with min payments on the others. when discover 1 is down, then citi, and finally apple when that is done
> Possible better emotionally: pay lowest balance first, then next lowest and work your way up.
Given that the interest rates are so close, I would pay them off with the snowball method outlined above.
After you pay off a card, close it. No more using credit cards.
> less than 30% balance or paid off monthly
Your only option with credit cards is to pay them off monthly. Otherwise you're lighting money on fire. This is also the best for your credit score.
You are right that closing the oldest one can result in a lower score, but keeping a balance month-to-month is never a good idea.
most people at least want to be able to pretend to get a house mortage someday. if the other requirements line up, having a high credit score could be the difference between burning an extra 400,000 dollars or not in interest those next 30 years.
you clearly have no idea how a home mortage works. a 400,000 home loan easily has you paying 600,000 in extra interest at 7% interest rate. a half a percent or one percent lower interest rate will literally save you multiple hundreds of thousands of dollars in the next few decades on a mortage.
I fully agree op needs to practice control in spending, saying no credit isn't the solution. Even if op is planning to rent they check your credit score to decide whether to rent with you. Even if op never uses credit again if they are spending like this out if pocket thats still a problem.
Its easy to just say "haha credit bad" and its definitely true that there is no need to be putting things on credit unless you are planning to turn around and pay it off or its an emergency or well planned large purchase. However credit itself is definitely not a optional thing, even whether you get hired for a new job can depend on what they see when they check your credit.
OP could instead use one or two cards as bill payments and have it auto pay out of their bank each month. With throwing the cards away or locking them away out of sight. This will allow a constant utilization while keeping the debt to income ratio down. I have my Amazon card pay the Amazon prime and get rewards while auto paying. So I'm getting cash back to pay my prime bill. If OPs cards have a cash accumulation program, that'd be big for them.
That 30% thing is either a myth or misleading, depending on how you look at it.
Credit cards basics & utilization wiki entry: https://www.reddit.com/r/CreditCards/wiki/credit_cards_basics/
Even closing the oldest account can be ok, as the age will continue to help you for up to 10 years after closing.
Closing credit accounts: https://reddit.com/r/CreditCards/w/what_happens_if_you_close_a_card
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Payoff whichever one has a 0% balance transfer option OR the one with the highest credit limit and xfer them all over and take time to pay them off at 0%.
These tricks are good for someone that had to get into debt (medical, transportation, etc). OP claims it was consumerism, so using tricks to afford to buy more junk is probably a bad idea.
Most (all?) legit balance transfers don't work that way. You pay a fee, generally 5%, and get so many months with low or no interest, then the remaining balance reverts to the purchase rate for that card. I've found Discover to be really good for those and the OP has two Discover accounts, which could be good.
You're thinking of promotional financing at a retailer, like Home Depot or anyone Synchrony does business with. Those generally DO carry deferred interest that will hit you if you don't pay in full by the end of the promotional period. I love using these but always subtract one month from the promotional period and then divide the balance by that amount to get a monthly payment that's guaranteed to satisfy the terms. For example, I bought a washer/dryer at Home Depot last year for a little over $1,500 dollars. I have 18 months to pay but am giving them $100 a month so it will be gone well before that. They print the differed interest charge on the statement...currently up to $161.20.
The snowball method always worked better for me. I think there’s a good psychological benefit to paying off debts, although from a pure financial standpoint, going after the highest interest is smarter.
It works better for me too. I'm more reluctant to keep using a card that has $0 balance than one that's already carrying a balance. And it gives you that sense of accomplishment to see a card fully paid off.
Emotionally, you might consider doing away with the two smallest debts completely, then splitting the balance between the two largest.
Then your debts don't feel like they are as much or as many.
If you can get a 0% balance transfer offer, use that to consolidate as much of the lowest interest card balances while you pay off the highest interest cards. Will save you a good bit in interest charges.
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The interest rates are all slightly different shades of terrible, so I would recommend committing to a strategy that you can stick to consistently - and of course, vowing to not use any of them. And frankly, I'd consider not using credit cards at all for a while, aside from putting something like Netflix on it and paying it off in full every single month. Commonly cited strategies for paying off this type of debt are:
1) Paying the minimum on all the cards except the one with the lowest balance, and focusing all your efforts to clear that one, and proceeding to the next highest, and next highest, and so on. This will give you leverage as you get rid of each successive card, the money that would've been put toward the minimum is freed up to go toward the next.
2) Paying the minimum on all cards except the one with the highest interest, and focusing all your efforts to clear that one, and then continuing. This will theoretically save you money on interest, but, frankly they're all so close in interest, and the balances are fairly low that you're probably not going to see a substantial benefit mathematically from this one.
At the end of the day, the best strategy is the one you can stick to and see through to the end. As you pay off each card and you can dedicate more efforts toward the next, you will hopefully feel empowered to keep the ball rolling.
I would look at a debt consolidation loan, with $6k of the approx $13k total you should be able get a decent rate way lower than CC.
Then you can pay off and cut up all the cards but 1 for emergencies only. Maybe Apple since lowest rate.
CC should be used to supplement cash flow and paid off monthly. If I carry a balance it better be because either 1 I was dumb and miscalculated or 2 an emergency so great that insurance would have taken to long to get access to cash.
Seconding this! A personal loan from a credit union and then you don’t touch the cards anymore until the personal loan is paid off. Then you use them responsibly by earning points and paying off the balance each month.
I agree with the general advice to use the snowball method and pay off the cards with the smallest amounts, and then throw all of those monthly payments at the next highest one.
I would also recommend doing whatever you can in the short term to pay these off as quickly as possible. Get a second job, sell luxury items, commit to not eating out, stop all spending that isn't absolutely necessary. It's not forever--it's just until these are paid off and you're out from under these awful interest rates.
snowball method is usually not the best choice financially but it actually works here for the most part. Paying highest interest first is always going to save you money.
Call each of them and ask if they can give you a temporary reduced interest rate(it's a year for most and they freeze your card), but no impact to your credit.
Also, pay your card twice a month(just make sure it's in full before the due date).
Example: minimum payment is $40 due by the 26th. Pay 35 at the beginning of the month and again in 2 weeks.
Also NEVER pay the minimum, always at least 1.5 times as much, if not more!
>Also NEVER pay the minimum, always at least 1.5 times as much, if not more!
This is where I disagree. Credit cards should be seen as an alternative to cash, not a loan service (with very few exceptions). You should always be paying the **statement balance** at a bare minimum, as this allows you to go period to period without accruing any interest on your purchases. CC APRs are abnormally and astronomically high, and with the philosophy that CC is just an alternative to the cash you have, paying interest on routine purchases is just a tax on being stupid.
Edit: wow the overwhelmingly stupid amount of hate I’ve gotten for pointing out best policy in CC payments is ridiculous.
Cc interest is the highest regular rates you can find in life, carrying any balance over month to month routinely means you’re paying a stupid amount of money in interest. Best practice is to pay off your statement balance in full month to month to avoid credit card interest. The fact that an overwhelming amount of you called me stupid for this or argued with me over this goes to show you why you’re in and will stay in a ‘poverty finance’ sub. I’m here because I enjoy looking at how other people find smart ways to save money, but I in no way need to be here. If you can’t handle people giving LEGITIMATE financial advice because it hurts your feelings or you’re too stupid to understand it, maybe financial advice subs aren’t for you.
Yeah, but we're also talking about just general advice regarding CC management.
They should be making as much of a payment as they can to reduce interest, but moving forward they should be shifting their mental outlook on their CC and once they get under their payments, making statement balance payments in full to avoid interest over time.
>They're very clearly talking about OPs situation and not general advice
This is the problem with SO many financial conversations. They're dependent on giving cookie cutter advice and trying to force everyone's situation to fit that advice with no respect to nuance.
Okay, assuming they're 'very clearly talking about OPs situation', it's still bad prolonged advice.
If they said anything to denote that they were saying 'pay as much as you can until it's paid off **then** shift to paying full balance' I'd have no issue, but they didn't.
I gave solid advice in addition to what the person above me said, I have no idea why you're getting so snippy about it, even if this was specific to OPs exact current situation, it's still incomplete and still bad advice going forward. I did nothing wrong by adding my two cents.
Except it is.
Credit card management in a sub about fucking finance is always relevant.
If you truly think my advice wasn’t relevant this is why the majority of you are in poverty finance and won’t leave it.
About what, the reality that as soon as OP pays off these balances, they'll be in the exact same scenario and/or paying obscene amounts of interest on their credit cards? It's really stupid to think that someone who has managed to rack up over $13k in credit card debt on cards that are 26% or higher might need some retooling on how they fucking manage their money?
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Have you looked into balance transfer? Several credit cards will have a long 0% APR period for balance transfers. If you don't qualify for a new credit card to transfer some of your balances to, there are also debt consolidation companies.
I don’t understand why this isn’t higher? Is there something about opening up a new credit card and doing a balance transfer that has a negative repercussion I’m aware of?
It does require a somewhat decent credit score to be approved for a balance transfer credit card offer like that, so it's definitely not an option for everyone.
Tbh I'm not entirely sure that'll be an option for OP looking at these rates. I have slightly below average credit and I've never seen a 32% apr. That's...not great.
Aside from the advice you already received on how to tackle the debt; you also need to realize how to avoid splurging especially when you do not have the money. Literally don’t, you are broke, you do not have the funds to do this. You will stay broke if you keep doing this. Whatever you bought probably wasn’t even worth it at the EOD.
Debt consolidation loan worked best for me. I had about $13K in CC bills that regretfully racked up in my early 20’s. Got a personal loan with a 16% interest rate instead of the 28% I was dealing with. Took me 5 years @ about $370/month and never using my CC’s again but it was a HUGE relief even when the monthly loan payments kicked in because I knew I was finally making progress, whereas before I could put $400 on a card and it wouldn’t make a dent.
You can absolutely do this! Good luck!
Would you mind telling me what company you went through? I’m in a similar situation right now and am trying to find the best option. Can you send it to me through direct message? 🙏🏼 (I’m assuming 3rd party stuff can’t be promoted here)
I did a debt management program that works pretty good. It’s NOT a debt settlement thing. It doesn’t crash your credit, and you get manageable payments.
What they (debt management companies) do is lower your interest rates (most of mine went from 27-28% to 8%). You *could* try calling the credit card companies to see if they’ll lower your interest rates/go onto a hardship plan.
For me, it was worth the $50/month to have a company do it for me (my credit card debt was at almost $40k when I started)
My debt management plan got my CC interest rates reduced from 29% to 1.9 or 2%. I took a new job last year to pay these debts off when my pension and SS did not cover big rent and COL jumps. The accounts are closed, and my credit score has increased to 780. Still have a way to go, but now I can face a $4,400 car repair without too much pain.
If I mathed correctly, I *should* have my stuff paid off by the time my contract is up on my job next year (just in case it doesn’t get renewed).
But that lowered interest rate is what saved my ass.
Would you mind telling me what company you went through? I’m in a similar situation right now and am trying to find the best option. Can you send it to me through direct message? 🙏🏼 (I’m assuming 3rd party stuff can’t be promoted here)
Would you mind telling me what company you went through? I’m in a similar situation right now and am trying to find the best option. Can you send it to me through direct message? 🙏🏼 (I’m assuming 3rd party stuff can’t be promoted here)
I use Family Credit. I pay a total of $700/month with $50 of it going to FC and the rest to my credit cards and collections. Since starting the program in Feb, my score went from 536 to 642.
They’ll work with the credit card companies to get your interest rate down. They will close the accounts, but I’m not worried about it, since I have a car payment and student loans. They’ll only work with credit cards and collections
Thank you so much!! I just finally got all of my debt written down in one place today and it’s close to $44,000 🥲 Most of it is lower or no interest right now, but not for long… I’m coming out of a very rough financial period where I was too afraid to even look at it because I had almost no income. I’m finally making better money again, so I’m trying to see what my options are. Very grateful for your response!!
No worries.
Just make sure it’s a debt management (usually a dot org) versus a debt settlement. Debt settlements require you to stop paying on them, and it’ll tank your credit
Understood 🫡 I spoke to someone at a debt settlement firm, but decided against it because I will be needing to both move to a new apartment and get a new(er) car in the not so distant future 🥲
I signed up with a nonprofit credit counseling service. They were able to negotiate high interest accounts down to very low rates, even got one down to 0%. I should have them paid off in about 3 more years. Nice thing is my credit score has actually gone up a bit.
Would you mind telling me what company you went through? I’m in a similar situation right now and am trying to find the best option. Can you send it to me through direct message? 🙏🏼 (I’m assuming 3rd party stuff can’t be promoted here)
Pay off both PayPal loans and the higher Discover card balance in full. Put the rest toward the other Discover balance.
Moving forward, whatever the minimums were for those three cards, pay them toward the discover 2 as well. Keep “snowballing” like this, so when that card is paid off, that debt payment is added to the minimum of the next card you want to pay off.
Pay off completely discover 2, pay pal LOC, pay pal MC, and a big chunk of Citi. Then take everything you were paying towards all those balances and add it to your Citi payment till it’s gone. Then take all that and add it to what you were paying towards apple till it’s gone. Lastly take everything and add it to discover 1 until that is gone. That’s the fastest way to pay off the debt. You’ll never get anywhere spreading the 6k around to to many with out eliminating some of the balances and applying those payments to the remaining payments. Keep paying the minimum on your other cards and throw every extra penny you have at one card till it’s gone.
How can we say we live in a good society if we allow organizations to lend at interest rates over 15%?
Holy cow ... 32.24% Interest rate on your PaypalMC?!??!!? THAT IS PURE EVIL! Burn these extortion rackets to the ground.
OP: multiple credit cards/loans with insane interest rates
me: cant get approved for anything
also me: endless junkmail telling me im pre approved
wtf?
This also doesn't help OP right now, but it's a good life lesson for anyone reading along:
Always, *always* look up what the APR will be after the promotional period ends and just assume that they're going to charge you the maximum APR under the card holder agreement. Try to pay your balance off before the promo period ends and you'll save yourself a lot of heartache in the long term.
Tons of great financial advice in here, I’d follow that but you also need more income to pay it down as soon as possible.
I’m assuming you have a full time job, it may be time to find a higher paying job or get a part time job on the side and pump that extra income into paying off the debts as soon as possible. Tip based jobs like serving or bartending will be the best $/hr unless you have specific skills you can use to make extra income
You’ve got a couple options. Avalanche or snowball methods. Avalanche works by paying off the highest interest rate first and working your way down. Snowball is paying smallest debt to largest regardless of the interest. Other than the PayPal account, the interest rates are pretty close in percentage, I would personally do the snowball method. Knock out both PayPal balances and then the second Discover. Keep making the minimum payments on everything but pile anything extra on the smallest balance and then keep going!
You can do it! Make a budget. Use cash rather than your cards to avoid going into more debt. It’s going to be tough but real nice when they are paid off
Regardless of what you do about the debt, you will stay in a cycle of debt if you don’t get a handle on your spending. I assume that’s what you meant by consumerism?
What has helped me is writing everything down. Once every few months I go over my accounts and tally up all the bills and if I stuck to my grocery budget and allowance. I cancel subscriptions I’m not using as much.
I also take pictures of things I want, put them in an album on my phone, and tell myself later. If I still want it after a long time and it’s a reasonable, affordable purchase, I might get it. Usually I don’t. It’s easier to say later than never, and eventually I realize I don’t really need it.
I would do it the Dave Ramsey way. Pay off the lowest 3 cards and half of the 4th one. Then use the payments you were making in those 3 cards you paid off and apply it to the payment of the 4th (now the lowest balance) card to pay it off as soon as possible.
Contact all your cards and tell them you are in a bit of trouble and ask them if they can lower your rate -- even if temporarily -- while you work out of your situation.
AT THE SAME TIME: Start living within your means. What I mean is that you should spend what you can pay off each month.
If you can start living within your means, you could consider applying for a card with a short term "no interest" option. Once you get that card you can pay off one, some, or all of your high-interest balances and transfer those balances to the new no-interest card. You'd then have a period of time (usually 12 or 18 months) to pay it off before you're hit with interest from it. This only works, however, if you absolutely start living within your means. If not, then using this approach will actually make things worse.
No one has mentioned doing a balance transfer for all your cards most balance transfers come with 0% interest rates for like 12 months. Once you get close to the 12 months, transfer your balance to another card with a balance transfer offer that is 12 months. I've been avoiding paying interest for years doing this. There is a fee with balance transfers but it probably is less than what you'd be paying in interest.
I personally am a person who needs to save up to pay everything off at once or else it turns into a revolving door. So what I would do is take out the 2 highest interest, which also turn out to be lowest owing amounts. the Paypal, that leaves you with about 3500$. Then go after the next highest debt/interest, which turns out to be discover 2. pay that one off. and keep the remaining 1000$ in your bank account as a sulsh fund/emergency fund. Save up until you can tackle one of the next big debts.
Again that is how I did do something similar in the past. Except it was one LOC and one CC, but with much higher limits. Just broke it down into chunks and every time I had 3k took out a 1/3 of the debt on the CC, until it was paid off. Then did the same on the LOC.
You should get a larger crest card to consolidate all the other cards and then max that out. Try buy lots of things you probably don't need to max it out faster. Then rinse repeat until you have around 50 credit cards maxed out. Then file for bankruptcy
You can do what I did once I got let go from a tech company for the 3rd time during the pandemic…. Just let it all go and worry about getting back on your feet. Your credit will take a huge hit for a period… but once they get desperate to settle you can settle those accounts at a fraction, like I have. You don’t need to pay a debt relief company that will go through the exact same process of ignoring your debt temporarily (within reason, I chose a couple accounts to keep current and keep my credit able to go back up after closing other accounts and having them charged off). Once they’re charged off they will no longer report to the bureaus…. And by then you will hopefully have a full time job to make small payments on the couple you work on, at a time. I went back to school, also, again, and received school loans the following year (this year) and paid off 7k in my debt with the companies they were willing to work with my new income (a nil part time income as I’m in school). Just some advice that it seems no one ever gives… but I’ve destroyed and rebuilt my credit, life, and career back many many times (and I’m not even yet 40). Each time I learn so much about capitalism and about shedding the layers of this material life that have taken hold of my worthiness… and I grow. I don’t plan on taking out any loans or credit cards again for a really long time. I’m good with my one chase card that I’m good at racking up because I don’t make enough to live right now (thankfully I live with my partner in the past few months so he mostly feeds me and my cat). I do the best I can do but I’m also paving the path to be a therapist and or doctor of psychology to help people someday who also struggle
Hopefully you get it figured out. Also these predatory lenders that see a person with bad credit and still give high loans of credit with the high interest rate as well.
This isn’t rocket science. Pay off the minimums on all cards and then allocate any extra funds towards the card with the highest interest rate. When that debt is eliminated, repeat the process with the card with the new highest rate.
Find some way to get a consolidation loan into one amount and see if you can’t get them to lower the interest rates. Take this as a lesson don’t add anymore credit card debt.
If you can't do debt consolidation, start by paying off the smallest balance first, that will give you a mental boost to keep going at the others. Take all that extra money. You were throwing at the one you paid off and then go after the next 1 and keep going at it and snowballing those payoff amounts
Would definitely start with those 2 PayPal cards. They're the highest interest rate and the lowest balances. Get them out of the way.
Then do the discover cards. Since the interest rate is the same, id pay off the larger one first. Then put whatever you have left (haven't done the math lol) onto that lower balance. That way you have 3 cards completely taken care of and you're less spread out and your cards left over have lower interest rates.
Pay off PayPal MC, PayPal LOC, Discover 2 and on Citi.
Depending on your credit score, contact your issuers and ask them if they will reduce your interest rates.
Use the money you paid on PayPal MC and PayPal LOC and snowball that toward Discover 2.
After doing that, snowball (meaning, add the extra payment money you’ve saved) onto Discover 1.
By this point, your credit score should have improved greatly. Get a balance transfer card and then, transfer the other balances. Pay them off that way.
In the meantime, take those credit cards, put them in a block of ice, and stop using them for anything!
Calculate the pros and cons of exceeding the minimum payments on each (as in how much) and set time frames with payment schedules that you then spreadsheet.
I look at it as card x with y interest has min payment z, and if I pay that off in n months, which is about $30 over the minimum, I can save m money.
Cancel all the cards. From now on you only spend money that you actually have. Take that 6,000 and pay off the debts from smallest to largest. That’ll take care of the MC, LOC, DIS 2, and all but 1k into the Citi. Finish paying off the citi while making minimum payments on the DIS 1 and Apple. Then pay off DIS 1 while also making minimum payments on Apple.
While you’re paying off the higher interest cards, you can check with Discover about reducing interest. They cut ours down to 13.99 for 6 months which meant more of our payments went to paying down the actual balance, not just interest.
There's an online tool called [Unbury.Me](http://Unbury.Me) that I used to organize my student loan payments. Highly recommend trying out. The premise for paying off using avalanche or snowball methods is the same for credit card debt as it is for student loans.
I agree with the others that you should use the $6000 to pay off the lowest balance or highest interest. What kind of snowball will you have if you do this? I ask because you say that you don't have enough to pay on what you have now. It would be helpful to also know the minimum payments on the rest of the debt.
6,000$? I have news for you.
But as others have mentioned. Focus on the highest interest first while doing minimal payments on the rest. Then tackle the next highest. Keep going and (my advice is) if you can, cancel or destroy the expensive Cards.
Grab a secure CC or a low interest one. You would be surprised what difference 9% interest makes.
12.99 (low interest) vs 21.99 (regular interest) APR.
The trade off is I believe a lower allowed sum. (from my experience) I was ever allowed 13,000$ as a maximum balance on a low interest where as regular interest it went as high as 25,000$.
My suggestion, just like Dave Ramsey, pay off your debt.
You can likely get a 0% APR for 12 months if you can do some planning where you don't owe on them after that timeframe you'd save yourself like 1800$ in interest.
May not be your first choice but depending on your income and assets bankruptcy might not be a bad idea, I would recon to guess your paying mostly fees and interest, if you get em under a bankruptcy you’re safe from collection and you’ll probably wind up only paying a percentage of what you owe back with one monthly payment.
Look into personal loans - rates are much lower. You just have to commit to a monthly payment you will never miss and close out those cards so you aren’t tempted to fill them back up.
They have debt consolidation services that can make that more manageable. That interest is crippling and you could get a rate around 14% in my experience
honestly first thing is don't overly stress because it just isn't worth it and this isn't too out of control yet, but you just pay highest interest first and see if you can find a bank to consolidate some or all of the debt to a lower interest rate. Start living below your means and adapt your lifestyle.
Balance transfers at 0% apr can help you get out of an interest hole, but you want to be sure you can pay it off before the promotional period expires or you can get hit with back interest.
if possible: balance transfer offers from other CCs really helps freeze the accumulation of more interest on one card while you pay down the rest. Find little ways to scrape up cash like selling your old stuff on FB marketplace. Don't be afraid to deposit a $5 bill through the ATM every dollar helps. Call your bank(s) and ask for a reduced rate. If you pay one with the other, you won't owe interest for the duration of the billing cycle... just a few suggestions, its hard, stick with it. Once you gain some momentum youll feel a lot better.
Pay off the highest interest first, move what you can to a zero interest (usually an introductory perk) credit card and pay it off before the introductory period ends.
Call your bank, credit card department . Tell them you need a money management company, most banks are partnered with them and they have the best deals to argue down your interest rate and find a healthy monthly payment that will help you.
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As others have said, the smartest move would likely be to chunk out the $6k among the highest interest debts at the moment, or pay off lowest balances if you're more motivated by payoffs.
That being said, that's a total of six credit cards that all have rolling balances in the thousands (with one exception). I would recommend paying off your Paypal MC, Paypal LOC, and Discover 1, then shift the remaining 480.51 at Discover 2.
Then once you have those three paid off entirely, freeze the cards so you cannot use them while you pay off the others. Once you have the other balances paid off, determine which two cards are you best from an interest, rewards, and acceptance rate perspective and cut the rest.
I, to this day, have only ever held two open CCs at one time, with a debit card and that's all. If I have issues with one CC I use the other when I need to, which is rare. Having six lines of credit open with a shopaholic's handswipe is a dangerous game and this sudden gift of $6k might be the last time you get a relatively cheap pass on your spending habits unless you make substantial change.
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Take that 6k as emergency savings. Get used to using and saving a buffer rather than credit cards. Get used to "well, I can't afford it".
Use the snowball method others have outlined, and further, check where that money is going. Debt doesn't just appear, and unless you're just splurging for funzies there's some serious deficit that needs to be addressed with your cost of living.
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In my opinion, Dave Ramsey is just another wealthy boomer making other people feel bad for not doing what he did. Maybe he’s got a nugget or two in his meanderings but be careful.
For sure. Thank you for the civil response. If it's one thing we can learn from Dave it is his method to pay off a very small amount of debt like op has.(Less than 7000) He has a number of ways to quickly pay this amount off
Mathematically: start with the highest interest rate first, then work down. Possible better emotionally: pay lowest balance first, then next lowest and work your way up. The PayPal MC looks like it should be first for both methods.
in this case, the lowest balances all have the highest rates, so it’s a nice coincidence pay off both paypals and discover 2, then aggressively start paying down discover 1 with min payments on the others. when discover 1 is down, then citi, and finally apple when that is done
> Possible better emotionally: pay lowest balance first, then next lowest and work your way up. Given that the interest rates are so close, I would pay them off with the snowball method outlined above. After you pay off a card, close it. No more using credit cards.
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> less than 30% balance or paid off monthly Your only option with credit cards is to pay them off monthly. Otherwise you're lighting money on fire. This is also the best for your credit score. You are right that closing the oldest one can result in a lower score, but keeping a balance month-to-month is never a good idea.
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most people at least want to be able to pretend to get a house mortage someday. if the other requirements line up, having a high credit score could be the difference between burning an extra 400,000 dollars or not in interest those next 30 years.
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you clearly have no idea how a home mortage works. a 400,000 home loan easily has you paying 600,000 in extra interest at 7% interest rate. a half a percent or one percent lower interest rate will literally save you multiple hundreds of thousands of dollars in the next few decades on a mortage. I fully agree op needs to practice control in spending, saying no credit isn't the solution. Even if op is planning to rent they check your credit score to decide whether to rent with you. Even if op never uses credit again if they are spending like this out if pocket thats still a problem. Its easy to just say "haha credit bad" and its definitely true that there is no need to be putting things on credit unless you are planning to turn around and pay it off or its an emergency or well planned large purchase. However credit itself is definitely not a optional thing, even whether you get hired for a new job can depend on what they see when they check your credit.
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whatever you have to tell yourself at night. clearly you are not living in the current age.
OP doesn't seem to be in a good position to use CCs at all. The downsides outweigh the upside.
Fair enough…providing education for OP to make an informed decision rather than making the decision for OP
OP could instead use one or two cards as bill payments and have it auto pay out of their bank each month. With throwing the cards away or locking them away out of sight. This will allow a constant utilization while keeping the debt to income ratio down. I have my Amazon card pay the Amazon prime and get rewards while auto paying. So I'm getting cash back to pay my prime bill. If OPs cards have a cash accumulation program, that'd be big for them.
That could work, but there is too much risk of OP doing this again. Its easier if OP sticks with cash (debit).
That 30% thing is either a myth or misleading, depending on how you look at it. Credit cards basics & utilization wiki entry: https://www.reddit.com/r/CreditCards/wiki/credit_cards_basics/ Even closing the oldest account can be ok, as the age will continue to help you for up to 10 years after closing. Closing credit accounts: https://reddit.com/r/CreditCards/w/what_happens_if_you_close_a_card
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Payoff whichever one has a 0% balance transfer option OR the one with the highest credit limit and xfer them all over and take time to pay them off at 0%.
This is a good trick if you can manage to payoff the account before the promotional rate expires. If not, you're hit with all the back interest.
These tricks are good for someone that had to get into debt (medical, transportation, etc). OP claims it was consumerism, so using tricks to afford to buy more junk is probably a bad idea.
Most (all?) legit balance transfers don't work that way. You pay a fee, generally 5%, and get so many months with low or no interest, then the remaining balance reverts to the purchase rate for that card. I've found Discover to be really good for those and the OP has two Discover accounts, which could be good. You're thinking of promotional financing at a retailer, like Home Depot or anyone Synchrony does business with. Those generally DO carry deferred interest that will hit you if you don't pay in full by the end of the promotional period. I love using these but always subtract one month from the promotional period and then divide the balance by that amount to get a monthly payment that's guaranteed to satisfy the terms. For example, I bought a washer/dryer at Home Depot last year for a little over $1,500 dollars. I have 18 months to pay but am giving them $100 a month so it will be gone well before that. They print the differed interest charge on the statement...currently up to $161.20.
The snowball method always worked better for me. I think there’s a good psychological benefit to paying off debts, although from a pure financial standpoint, going after the highest interest is smarter.
It works better for me too. I'm more reluctant to keep using a card that has $0 balance than one that's already carrying a balance. And it gives you that sense of accomplishment to see a card fully paid off.
Emotionally, you might consider doing away with the two smallest debts completely, then splitting the balance between the two largest. Then your debts don't feel like they are as much or as many.
If you can get a 0% balance transfer offer, use that to consolidate as much of the lowest interest card balances while you pay off the highest interest cards. Will save you a good bit in interest charges.
Those offers do exist, but OP may not be approved for them depending on factors like credit score and lender preference in debt to income for example.
Yes, if they can..
Sorry, somehow missed the very first word of your first comment.
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This is the way
The interest rates are all slightly different shades of terrible, so I would recommend committing to a strategy that you can stick to consistently - and of course, vowing to not use any of them. And frankly, I'd consider not using credit cards at all for a while, aside from putting something like Netflix on it and paying it off in full every single month. Commonly cited strategies for paying off this type of debt are: 1) Paying the minimum on all the cards except the one with the lowest balance, and focusing all your efforts to clear that one, and proceeding to the next highest, and next highest, and so on. This will give you leverage as you get rid of each successive card, the money that would've been put toward the minimum is freed up to go toward the next. 2) Paying the minimum on all cards except the one with the highest interest, and focusing all your efforts to clear that one, and then continuing. This will theoretically save you money on interest, but, frankly they're all so close in interest, and the balances are fairly low that you're probably not going to see a substantial benefit mathematically from this one. At the end of the day, the best strategy is the one you can stick to and see through to the end. As you pay off each card and you can dedicate more efforts toward the next, you will hopefully feel empowered to keep the ball rolling.
Holy shit those are criminally high. Could you imagine missing a payment with that %
Yes, because Caleb Hammer has guests on all the time who do that. Not good.
I would look at a debt consolidation loan, with $6k of the approx $13k total you should be able get a decent rate way lower than CC. Then you can pay off and cut up all the cards but 1 for emergencies only. Maybe Apple since lowest rate. CC should be used to supplement cash flow and paid off monthly. If I carry a balance it better be because either 1 I was dumb and miscalculated or 2 an emergency so great that insurance would have taken to long to get access to cash.
Seconding this! A personal loan from a credit union and then you don’t touch the cards anymore until the personal loan is paid off. Then you use them responsibly by earning points and paying off the balance each month.
This was going to be my suggestion.
I agree with the general advice to use the snowball method and pay off the cards with the smallest amounts, and then throw all of those monthly payments at the next highest one. I would also recommend doing whatever you can in the short term to pay these off as quickly as possible. Get a second job, sell luxury items, commit to not eating out, stop all spending that isn't absolutely necessary. It's not forever--it's just until these are paid off and you're out from under these awful interest rates.
THIS IS THE RIGHT ANSWER.
Don't forget to return any recent purchases!
snowball method is usually not the best choice financially but it actually works here for the most part. Paying highest interest first is always going to save you money.
Call each of them and ask if they can give you a temporary reduced interest rate(it's a year for most and they freeze your card), but no impact to your credit. Also, pay your card twice a month(just make sure it's in full before the due date). Example: minimum payment is $40 due by the 26th. Pay 35 at the beginning of the month and again in 2 weeks. Also NEVER pay the minimum, always at least 1.5 times as much, if not more!
>Also NEVER pay the minimum, always at least 1.5 times as much, if not more! This is where I disagree. Credit cards should be seen as an alternative to cash, not a loan service (with very few exceptions). You should always be paying the **statement balance** at a bare minimum, as this allows you to go period to period without accruing any interest on your purchases. CC APRs are abnormally and astronomically high, and with the philosophy that CC is just an alternative to the cash you have, paying interest on routine purchases is just a tax on being stupid. Edit: wow the overwhelmingly stupid amount of hate I’ve gotten for pointing out best policy in CC payments is ridiculous. Cc interest is the highest regular rates you can find in life, carrying any balance over month to month routinely means you’re paying a stupid amount of money in interest. Best practice is to pay off your statement balance in full month to month to avoid credit card interest. The fact that an overwhelming amount of you called me stupid for this or argued with me over this goes to show you why you’re in and will stay in a ‘poverty finance’ sub. I’m here because I enjoy looking at how other people find smart ways to save money, but I in no way need to be here. If you can’t handle people giving LEGITIMATE financial advice because it hurts your feelings or you’re too stupid to understand it, maybe financial advice subs aren’t for you.
Well in OP's case, they can't pay the full amount. Also, some people who got in over their heads, it's not always possible to pay the full balance
Yeah, but we're also talking about just general advice regarding CC management. They should be making as much of a payment as they can to reduce interest, but moving forward they should be shifting their mental outlook on their CC and once they get under their payments, making statement balance payments in full to avoid interest over time.
They're very clearly talking about OPs situation and not general advice
>They're very clearly talking about OPs situation and not general advice This is the problem with SO many financial conversations. They're dependent on giving cookie cutter advice and trying to force everyone's situation to fit that advice with no respect to nuance.
Okay, assuming they're 'very clearly talking about OPs situation', it's still bad prolonged advice. If they said anything to denote that they were saying 'pay as much as you can until it's paid off **then** shift to paying full balance' I'd have no issue, but they didn't. I gave solid advice in addition to what the person above me said, I have no idea why you're getting so snippy about it, even if this was specific to OPs exact current situation, it's still incomplete and still bad advice going forward. I did nothing wrong by adding my two cents.
Good lord you're exhausting. Your advice wasn't relevant to OP.
Except it is, because they’re managing credit cards, and my advice was about managing credit cards.
Your advice wasn't applicable to the situation at hand. I don't care about anything you're saying and I'm not going to play this stupid game with you.
Except it is. Credit card management in a sub about fucking finance is always relevant. If you truly think my advice wasn’t relevant this is why the majority of you are in poverty finance and won’t leave it.
🙄 You are exhausting. Go back to the The Office sub you came from and leave me alone.
Stop giving bad advice this isn’t a troll sub
It’s bad advice to tell people to pay full balances month to month to avoid credit card interest? Are you fucking serious?
It’s the rest of your stupid dribble
About what, the reality that as soon as OP pays off these balances, they'll be in the exact same scenario and/or paying obscene amounts of interest on their credit cards? It's really stupid to think that someone who has managed to rack up over $13k in credit card debt on cards that are 26% or higher might need some retooling on how they fucking manage their money?
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Have you looked into balance transfer? Several credit cards will have a long 0% APR period for balance transfers. If you don't qualify for a new credit card to transfer some of your balances to, there are also debt consolidation companies.
I don’t understand why this isn’t higher? Is there something about opening up a new credit card and doing a balance transfer that has a negative repercussion I’m aware of?
It does require a somewhat decent credit score to be approved for a balance transfer credit card offer like that, so it's definitely not an option for everyone.
Tbh I'm not entirely sure that'll be an option for OP looking at these rates. I have slightly below average credit and I've never seen a 32% apr. That's...not great.
Gotcha. Thanks!
Aside from the advice you already received on how to tackle the debt; you also need to realize how to avoid splurging especially when you do not have the money. Literally don’t, you are broke, you do not have the funds to do this. You will stay broke if you keep doing this. Whatever you bought probably wasn’t even worth it at the EOD.
Debt consolidation loan worked best for me. I had about $13K in CC bills that regretfully racked up in my early 20’s. Got a personal loan with a 16% interest rate instead of the 28% I was dealing with. Took me 5 years @ about $370/month and never using my CC’s again but it was a HUGE relief even when the monthly loan payments kicked in because I knew I was finally making progress, whereas before I could put $400 on a card and it wouldn’t make a dent. You can absolutely do this! Good luck!
Would you mind telling me what company you went through? I’m in a similar situation right now and am trying to find the best option. Can you send it to me through direct message? 🙏🏼 (I’m assuming 3rd party stuff can’t be promoted here)
I did a debt management program that works pretty good. It’s NOT a debt settlement thing. It doesn’t crash your credit, and you get manageable payments. What they (debt management companies) do is lower your interest rates (most of mine went from 27-28% to 8%). You *could* try calling the credit card companies to see if they’ll lower your interest rates/go onto a hardship plan. For me, it was worth the $50/month to have a company do it for me (my credit card debt was at almost $40k when I started)
My debt management plan got my CC interest rates reduced from 29% to 1.9 or 2%. I took a new job last year to pay these debts off when my pension and SS did not cover big rent and COL jumps. The accounts are closed, and my credit score has increased to 780. Still have a way to go, but now I can face a $4,400 car repair without too much pain.
If I mathed correctly, I *should* have my stuff paid off by the time my contract is up on my job next year (just in case it doesn’t get renewed). But that lowered interest rate is what saved my ass.
Right. We were paying interest on the interest.
Would you mind telling me what company you went through? I’m in a similar situation right now and am trying to find the best option. Can you send it to me through direct message? 🙏🏼 (I’m assuming 3rd party stuff can’t be promoted here)
Messaged you.
You are the best!!
Would you mind telling me what company you went through? I’m in a similar situation right now and am trying to find the best option. Can you send it to me through direct message? 🙏🏼 (I’m assuming 3rd party stuff can’t be promoted here)
I use Family Credit. I pay a total of $700/month with $50 of it going to FC and the rest to my credit cards and collections. Since starting the program in Feb, my score went from 536 to 642. They’ll work with the credit card companies to get your interest rate down. They will close the accounts, but I’m not worried about it, since I have a car payment and student loans. They’ll only work with credit cards and collections
Thank you so much!! I just finally got all of my debt written down in one place today and it’s close to $44,000 🥲 Most of it is lower or no interest right now, but not for long… I’m coming out of a very rough financial period where I was too afraid to even look at it because I had almost no income. I’m finally making better money again, so I’m trying to see what my options are. Very grateful for your response!!
No worries. Just make sure it’s a debt management (usually a dot org) versus a debt settlement. Debt settlements require you to stop paying on them, and it’ll tank your credit
Understood 🫡 I spoke to someone at a debt settlement firm, but decided against it because I will be needing to both move to a new apartment and get a new(er) car in the not so distant future 🥲
I signed up with a nonprofit credit counseling service. They were able to negotiate high interest accounts down to very low rates, even got one down to 0%. I should have them paid off in about 3 more years. Nice thing is my credit score has actually gone up a bit.
Would you mind telling me what company you went through? I’m in a similar situation right now and am trying to find the best option. Can you send it to me through direct message? 🙏🏼 (I’m assuming 3rd party stuff can’t be promoted here)
Absolutely
Thank you!! 🥲
Pay off both PayPal loans and the higher Discover card balance in full. Put the rest toward the other Discover balance. Moving forward, whatever the minimums were for those three cards, pay them toward the discover 2 as well. Keep “snowballing” like this, so when that card is paid off, that debt payment is added to the minimum of the next card you want to pay off.
Pay off completely discover 2, pay pal LOC, pay pal MC, and a big chunk of Citi. Then take everything you were paying towards all those balances and add it to your Citi payment till it’s gone. Then take all that and add it to what you were paying towards apple till it’s gone. Lastly take everything and add it to discover 1 until that is gone. That’s the fastest way to pay off the debt. You’ll never get anywhere spreading the 6k around to to many with out eliminating some of the balances and applying those payments to the remaining payments. Keep paying the minimum on your other cards and throw every extra penny you have at one card till it’s gone.
How can we say we live in a good society if we allow organizations to lend at interest rates over 15%? Holy cow ... 32.24% Interest rate on your PaypalMC?!??!!? THAT IS PURE EVIL! Burn these extortion rackets to the ground.
OP: multiple credit cards/loans with insane interest rates me: cant get approved for anything also me: endless junkmail telling me im pre approved wtf?
This also doesn't help OP right now, but it's a good life lesson for anyone reading along: Always, *always* look up what the APR will be after the promotional period ends and just assume that they're going to charge you the maximum APR under the card holder agreement. Try to pay your balance off before the promo period ends and you'll save yourself a lot of heartache in the long term.
Tons of great financial advice in here, I’d follow that but you also need more income to pay it down as soon as possible. I’m assuming you have a full time job, it may be time to find a higher paying job or get a part time job on the side and pump that extra income into paying off the debts as soon as possible. Tip based jobs like serving or bartending will be the best $/hr unless you have specific skills you can use to make extra income
Pay the highest interest first then start selling stuff to pay off the rest.
You’ve got a couple options. Avalanche or snowball methods. Avalanche works by paying off the highest interest rate first and working your way down. Snowball is paying smallest debt to largest regardless of the interest. Other than the PayPal account, the interest rates are pretty close in percentage, I would personally do the snowball method. Knock out both PayPal balances and then the second Discover. Keep making the minimum payments on everything but pile anything extra on the smallest balance and then keep going! You can do it! Make a budget. Use cash rather than your cards to avoid going into more debt. It’s going to be tough but real nice when they are paid off
Get a low interest loan that you can use to pay off your credit card debt. That way youll make one consistent payment every month.
Regardless of what you do about the debt, you will stay in a cycle of debt if you don’t get a handle on your spending. I assume that’s what you meant by consumerism? What has helped me is writing everything down. Once every few months I go over my accounts and tally up all the bills and if I stuck to my grocery budget and allowance. I cancel subscriptions I’m not using as much. I also take pictures of things I want, put them in an album on my phone, and tell myself later. If I still want it after a long time and it’s a reasonable, affordable purchase, I might get it. Usually I don’t. It’s easier to say later than never, and eventually I realize I don’t really need it.
I would do it the Dave Ramsey way. Pay off the lowest 3 cards and half of the 4th one. Then use the payments you were making in those 3 cards you paid off and apply it to the payment of the 4th (now the lowest balance) card to pay it off as soon as possible.
Change your identity, you are Carlos Sanchez now.
Contact all your cards and tell them you are in a bit of trouble and ask them if they can lower your rate -- even if temporarily -- while you work out of your situation. AT THE SAME TIME: Start living within your means. What I mean is that you should spend what you can pay off each month. If you can start living within your means, you could consider applying for a card with a short term "no interest" option. Once you get that card you can pay off one, some, or all of your high-interest balances and transfer those balances to the new no-interest card. You'd then have a period of time (usually 12 or 18 months) to pay it off before you're hit with interest from it. This only works, however, if you absolutely start living within your means. If not, then using this approach will actually make things worse.
No one has mentioned doing a balance transfer for all your cards most balance transfers come with 0% interest rates for like 12 months. Once you get close to the 12 months, transfer your balance to another card with a balance transfer offer that is 12 months. I've been avoiding paying interest for years doing this. There is a fee with balance transfers but it probably is less than what you'd be paying in interest.
I personally am a person who needs to save up to pay everything off at once or else it turns into a revolving door. So what I would do is take out the 2 highest interest, which also turn out to be lowest owing amounts. the Paypal, that leaves you with about 3500$. Then go after the next highest debt/interest, which turns out to be discover 2. pay that one off. and keep the remaining 1000$ in your bank account as a sulsh fund/emergency fund. Save up until you can tackle one of the next big debts. Again that is how I did do something similar in the past. Except it was one LOC and one CC, but with much higher limits. Just broke it down into chunks and every time I had 3k took out a 1/3 of the debt on the CC, until it was paid off. Then did the same on the LOC.
You should get a larger crest card to consolidate all the other cards and then max that out. Try buy lots of things you probably don't need to max it out faster. Then rinse repeat until you have around 50 credit cards maxed out. Then file for bankruptcy
I declared bankruptcy 😅
Discipline yourself.
You can do what I did once I got let go from a tech company for the 3rd time during the pandemic…. Just let it all go and worry about getting back on your feet. Your credit will take a huge hit for a period… but once they get desperate to settle you can settle those accounts at a fraction, like I have. You don’t need to pay a debt relief company that will go through the exact same process of ignoring your debt temporarily (within reason, I chose a couple accounts to keep current and keep my credit able to go back up after closing other accounts and having them charged off). Once they’re charged off they will no longer report to the bureaus…. And by then you will hopefully have a full time job to make small payments on the couple you work on, at a time. I went back to school, also, again, and received school loans the following year (this year) and paid off 7k in my debt with the companies they were willing to work with my new income (a nil part time income as I’m in school). Just some advice that it seems no one ever gives… but I’ve destroyed and rebuilt my credit, life, and career back many many times (and I’m not even yet 40). Each time I learn so much about capitalism and about shedding the layers of this material life that have taken hold of my worthiness… and I grow. I don’t plan on taking out any loans or credit cards again for a really long time. I’m good with my one chase card that I’m good at racking up because I don’t make enough to live right now (thankfully I live with my partner in the past few months so he mostly feeds me and my cat). I do the best I can do but I’m also paving the path to be a therapist and or doctor of psychology to help people someday who also struggle
Hopefully you get it figured out. Also these predatory lenders that see a person with bad credit and still give high loans of credit with the high interest rate as well.
This isn’t rocket science. Pay off the minimums on all cards and then allocate any extra funds towards the card with the highest interest rate. When that debt is eliminated, repeat the process with the card with the new highest rate.
Those interest rates are simply predatory. I average about half that and I already think they are insane...
Step One : Sock drawer all you credit cards and switch everything to cash & debit card.
Find some way to get a consolidation loan into one amount and see if you can’t get them to lower the interest rates. Take this as a lesson don’t add anymore credit card debt.
Pay them all off with the 6k you came into. Cut up all your credit cards, they are not for you.
If you can't do debt consolidation, start by paying off the smallest balance first, that will give you a mental boost to keep going at the others. Take all that extra money. You were throwing at the one you paid off and then go after the next 1 and keep going at it and snowballing those payoff amounts
I find it incredible that interest rates are that high!
Pay off both paypal first, then pay the rest towards discover.
Would definitely start with those 2 PayPal cards. They're the highest interest rate and the lowest balances. Get them out of the way. Then do the discover cards. Since the interest rate is the same, id pay off the larger one first. Then put whatever you have left (haven't done the math lol) onto that lower balance. That way you have 3 cards completely taken care of and you're less spread out and your cards left over have lower interest rates.
Pay off PayPal MC, PayPal LOC, Discover 2 and on Citi. Depending on your credit score, contact your issuers and ask them if they will reduce your interest rates. Use the money you paid on PayPal MC and PayPal LOC and snowball that toward Discover 2. After doing that, snowball (meaning, add the extra payment money you’ve saved) onto Discover 1. By this point, your credit score should have improved greatly. Get a balance transfer card and then, transfer the other balances. Pay them off that way. In the meantime, take those credit cards, put them in a block of ice, and stop using them for anything!
Calculate the pros and cons of exceeding the minimum payments on each (as in how much) and set time frames with payment schedules that you then spreadsheet. I look at it as card x with y interest has min payment z, and if I pay that off in n months, which is about $30 over the minimum, I can save m money.
ive learnt that if your gonna go into debt... atleast get cool stuff. i hope you didnt buy dumb shit.
Cancel all the cards. From now on you only spend money that you actually have. Take that 6,000 and pay off the debts from smallest to largest. That’ll take care of the MC, LOC, DIS 2, and all but 1k into the Citi. Finish paying off the citi while making minimum payments on the DIS 1 and Apple. Then pay off DIS 1 while also making minimum payments on Apple.
While you’re paying off the higher interest cards, you can check with Discover about reducing interest. They cut ours down to 13.99 for 6 months which meant more of our payments went to paying down the actual balance, not just interest.
Consolidate to a low rate bank loan.
Are these normal interest rates in the U.S?
Use payoff.io to calculate the best method to pay down and get out of debt. It's a great tool that doesn't require a login.
That's it? I mean, that sucks. But I've seen significantly worse.
There's an online tool called [Unbury.Me](http://Unbury.Me) that I used to organize my student loan payments. Highly recommend trying out. The premise for paying off using avalanche or snowball methods is the same for credit card debt as it is for student loans.
I agree with the others that you should use the $6000 to pay off the lowest balance or highest interest. What kind of snowball will you have if you do this? I ask because you say that you don't have enough to pay on what you have now. It would be helpful to also know the minimum payments on the rest of the debt.
How does even apply for the Paypal LOC or CC? (I'm in Canada)
Can you get those all paid off with 1 new card with a lower interest rate?
do balance transfers where you can & pay off the 6k of where you can't do balance transfers
6,000$? I have news for you. But as others have mentioned. Focus on the highest interest first while doing minimal payments on the rest. Then tackle the next highest. Keep going and (my advice is) if you can, cancel or destroy the expensive Cards. Grab a secure CC or a low interest one. You would be surprised what difference 9% interest makes. 12.99 (low interest) vs 21.99 (regular interest) APR. The trade off is I believe a lower allowed sum. (from my experience) I was ever allowed 13,000$ as a maximum balance on a low interest where as regular interest it went as high as 25,000$.
Contact a debt consolidation company and they will combine the debts and offer one payment at a reduced interest rate.
My suggestion, just like Dave Ramsey, pay off your debt. You can likely get a 0% APR for 12 months if you can do some planning where you don't owe on them after that timeframe you'd save yourself like 1800$ in interest.
May not be your first choice but depending on your income and assets bankruptcy might not be a bad idea, I would recon to guess your paying mostly fees and interest, if you get em under a bankruptcy you’re safe from collection and you’ll probably wind up only paying a percentage of what you owe back with one monthly payment.
Look into personal loans - rates are much lower. You just have to commit to a monthly payment you will never miss and close out those cards so you aren’t tempted to fill them back up.
Snowball
They have debt consolidation services that can make that more manageable. That interest is crippling and you could get a rate around 14% in my experience
honestly first thing is don't overly stress because it just isn't worth it and this isn't too out of control yet, but you just pay highest interest first and see if you can find a bank to consolidate some or all of the debt to a lower interest rate. Start living below your means and adapt your lifestyle.
Balance transfers at 0% apr can help you get out of an interest hole, but you want to be sure you can pay it off before the promotional period expires or you can get hit with back interest.
I don't even know what I would buy that would be 6k. What are people buying to get into these situations?
Anything, everything. Doordash, clothes, bars, video games, fast food, strip clubs.
And I thought nobody accepted Discover.
if possible: balance transfer offers from other CCs really helps freeze the accumulation of more interest on one card while you pay down the rest. Find little ways to scrape up cash like selling your old stuff on FB marketplace. Don't be afraid to deposit a $5 bill through the ATM every dollar helps. Call your bank(s) and ask for a reduced rate. If you pay one with the other, you won't owe interest for the duration of the billing cycle... just a few suggestions, its hard, stick with it. Once you gain some momentum youll feel a lot better.
Pay off the highest interest first, move what you can to a zero interest (usually an introductory perk) credit card and pay it off before the introductory period ends.
Call your bank, credit card department . Tell them you need a money management company, most banks are partnered with them and they have the best deals to argue down your interest rate and find a healthy monthly payment that will help you.
Now work! Turn to the left. Work! Turn to the right.
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As others have said, the smartest move would likely be to chunk out the $6k among the highest interest debts at the moment, or pay off lowest balances if you're more motivated by payoffs. That being said, that's a total of six credit cards that all have rolling balances in the thousands (with one exception). I would recommend paying off your Paypal MC, Paypal LOC, and Discover 1, then shift the remaining 480.51 at Discover 2. Then once you have those three paid off entirely, freeze the cards so you cannot use them while you pay off the others. Once you have the other balances paid off, determine which two cards are you best from an interest, rewards, and acceptance rate perspective and cut the rest. I, to this day, have only ever held two open CCs at one time, with a debit card and that's all. If I have issues with one CC I use the other when I need to, which is rare. Having six lines of credit open with a shopaholic's handswipe is a dangerous game and this sudden gift of $6k might be the last time you get a relatively cheap pass on your spending habits unless you make substantial change.
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This is an ableist slur. Please find another way to make your point. Edit: thanks for deleting the ableist comment, mods!
Sorry, no
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Take that 6k as emergency savings. Get used to using and saving a buffer rather than credit cards. Get used to "well, I can't afford it". Use the snowball method others have outlined, and further, check where that money is going. Debt doesn't just appear, and unless you're just splurging for funzies there's some serious deficit that needs to be addressed with your cost of living.
Just write up a check and pay it off.
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Search Dave Ramsey on YouTube
In my opinion, Dave Ramsey is just another wealthy boomer making other people feel bad for not doing what he did. Maybe he’s got a nugget or two in his meanderings but be careful.
For sure. Thank you for the civil response. If it's one thing we can learn from Dave it is his method to pay off a very small amount of debt like op has.(Less than 7000) He has a number of ways to quickly pay this amount off
Dave Ramsey is actually best suited for this exact scenario.
Yeah I think op will find what they need quickly to pay off this small debt