Gap Visa Card

luv4LO

So I hate this but I have a very high balance on a Gap Visa credit card, $6600 with an interest rate of 24%. I am paying $250/month and thats hardly touching the balance.  I am unfortunately in a position that I can't afford to put much more towards it.  Anyone have suggestions or advise on what to do with it, other than just keep paying what I can?  I feel like the interest is killing me.  I have cut it up and am never looking back!!!!!! 

simplyelise

Do you have things you could sell to add more to your payment? Is there something you can cut from your current budget to add more to the payment? Could you pick up extra work?

Technically you might be able to qualify to transfer the store card balance to a lower rate credit card: info link. But you need to do some research on that before you jump right in. 

The best thing to do is work hard to cut expenses or increase income to pay it off asap.

luv4LO

I've looked at the balance transfer option a little bit but worry that I wouldn't be approved for a large enough balance on the 0% interest for 18 months card, then I'd be stuck with 2 payments.  

I have $600 cash stashed away from a few gifts. Should I stock that into savings or use it to pay this down?  

simplyelise

I wouldn't touch the $600 because it doesn't make a big enough dent in the balance and if you have some kind of emergency you need to have something to fall back on.

brij2006

Post your entire budget here, and we can take a look to see where you can scrimp and save.  

als1982

brij2006 said:

Post your entire budget here, and we can take a look to see where you can scrimp and save.  

This. Also look for some side gigs and ways to make extra money. Before our wedding, we sold old jewelry, an iPod and a Play Station to a pawn shop and netted around $1,000. I also make extra cash on Swagbucks, and using apps like Field Agent, Gig Walk and Easy Shift. There's no shame in this kind of hustle.

luv4LO

ok. Its sad.  The gap visa is not my only CC but the one I am most worried about. 

luv4LO

I'm not sure how to post that larger.... as a picture...

als1982

You're missing a lot here. What about rent/mortgage, cell phone, TV, Internet, insurance, gym, utilities, entertainment, gifts, miscellaneous, etc.?

CuriousKiddosMama

What pp said. Also, what are the balances on your other cards/debts? One way to pay off your debts in not to focus on the largest (assuming by payment that this may be the largest) but by starting with the smallest. Once you pay off the smallest debt you apply that money monthly to the next smallest, and so on. This is called the debt snowball. By the time you get to your largest debt you are paying a ton every month because you are putting any extra at it you can plus all the money you were putting to your other debts.
You also need to look at getting your income up. If you can babysit from home in the evenings, or take your child with you, or do something like that any extra $ can really start moving the needle in a situation like this.

lbonga1

I'm battling high credit card debt right now too. Others have given me good suggestions about things to cut out, and suggested selling things I don't need. I searched my closet and found enough to pay off my two lowest balance cards. I agree with PP that your budget that you posted seems to be missing a lot. But from what I can see, it seems like your car payment is pretty high compared to your income (almost 15%). Is there any way you can sell it and get a cheaper car?

abrewer5

Can you post your balances/interest rate on your other debts? I think a snowball might be best in your situation even thou the Gap card is eating at you the most.

I am also going to agree with @lbonga1 about getting rid of the car, if possible. That would free up a lot of room for you to pay off your other debts.

luv4LO

als1982 said:

You're missing a lot here. What about rent/mortgage, cell phone, TV, Internet, insurance, gym, utilities, entertainment, gifts, miscellaneous, etc.?

DH pays cell phone, TV, internet, utilities, car insurance.  We live on a family owned farm, so the house is old, but paid for.  

I never have budgeted for entertainment, gifts etc.....I probably should, I bet a blow a lot of money that way and don't even realize it.   What do you suggest on these?  

luv4LO

I have 11 payments left on the vehicle. I am not sure how much equity I have on it now. But never again will buy a new one and finance for 6 years! 

Discover Card is 15% $7700

Capital One is 20% $492

Gap Visa is 24% $6641

Kohls is 22% $700

JCP is 25% $2000

Slumberland is 0% unsure of the balance. I have automatic payments set up to have it paid off before the 0% runs out though. 

als1982

Is the Slumberland for a bed or furniture? Can you have your H pay for that? Also, does he know how deeply in debt you are?

Also, with so few payments left, you might actually be in a good place with enough equity to sell and buy a beater.

Not to sound harsh, but your debt is from stuff, likely things and clothes you've bought to impress others or make yourself feel better temporarily. You have to snap out of that mindset. Stop valuing yourself on what you wear, own or what you think others think. Life will feel so much better when you have financial and emotional freedom from that.

luv4LO

Not harsh at all @als1982 I totally agree. It makes me sick to think about the mess I have gotten myself into for no good reason.    The slumberland is a bed and couch. I am not sure he would be willing to take on that payment, kind of the you wanted it, you pay for it mentality.   And he doesn't know the extent of it.  We are going to have to either add on to our current home or purchase something different and I am so worried my situation will hold us back.  I have done this before but have always gotten out of it some how, but its never been this deep.   

Erikan73

Can you apply for personal loan that you could use to pay off your credit cards that would be at a lower interest rate? Even if you can't get a loan that would cover all off them. If you can use it to pay of the two highest interest rate that would save you money in the long run.

luv4LO

@Erikan73 I kind of tried that route.  I contact my local bank, a small town bank and they wanted some collateral. Which I don't have at all.  

als1982

luv4LO said:

Not harsh at all @als1982 I totally agree. It makes me sick to think about the mess I have gotten myself into for no good reason.    The slumberland is a bed and couch. I am not sure he would be willing to take on that payment, kind of the you wanted it, you pay for it mentality.   And he doesn't know the extent of it.  We are going to have to either add on to our current home or purchase something different and I am so worried my situation will hold us back.  I have done this before but have always gotten out of it some how, but its never been this deep.   

You have to tell him what's going on and give him to full perspective, including the number of cards and total owed.

I continue to not understand separate finances for married couples. Is it a trust or control issue? Allowing for one or both partners to be dishonest or not completely truthful? Because all of the reasons make for an unhealthy marriage.

hoffse

OK first thing is first - you need to come clean to your H.  It's not going to be a pleasant conversion, but it needs to happen.

Then you two need to sit down as a couple and figure out how to pool your resources to pay these debts off.  I understand that sometimes the saver doesn't want to bail out the spender, but you guys are married and are in this together, for better or for worse.

It might also be smart to make yourself accountable to him in terms of your spending going forward.  Let him have access to your accounts so he can check balances, etc. 

I would keep the Slumberland thing on auto-pay if you are certain it's going to be paid off in time.  Please check that though because you need to know what your balances are on these accounts at all times.  0% interest promos usually bite you in the ass in a serious way if you don't get them paid off before the promo period ends, so I would make sure that one is taken care of at least one month early.

Take the car to a dealer and/or carmax and get an offer for it.  That will help you know what kind of equity you have in it.  Subtract out the remaining balance on your loan, and that is your budget for a different car+taxes/title/insurance that you pay cash for.  Your car payment is way too high for your income.

It's good that you are recognizing that you are in trouble.  But you need to take steps to rectify it.  That means telling your H, asking for his help, finding out the balance on every loan you have (furniture included) and creating a plan to get rid of it.  Your plan needs to include creating an accurate budget that you force yourself to stick with.  Budgets are useless if you don't track what you actually spend.  Go back through your cards and bank accounts starting with January and categorize every purchase.  You need to confront what your actual spending habits are if you are going to fix them.  Once you have done that you will be able to create a more realistic budget going forward.  And then you need to continue to track your purchases and cut yourself off when the money is gone for that category.

abrewer5

luv4LO said:

I have 11 payments left on the vehicle. I am not sure how much equity I have on it now. But never again will buy a new one and finance for 6 years! 

Discover Card is 15% $7700

Capital One is 20% $492

Gap Visa is 24% $6641

Kohls is 22% $700

JCP is 25% $2000

Slumberland is 0% unsure of the balance. I have automatic payments set up to have it paid off before the 0% runs out though. 

Ok with these totals I would tackle the capital one card first. Put the minimum plus any additional money you have left over at the end of the month towards that balance, while still paying the minimum on the others. Then move to the JCP card and put the money you were putting towards the capital one plus the minimum payment you were already paying on it... and keep moving down the list smallest to largest.

I would seriously consider if you have not already (and not necessarily in this order):

1. Discuss this situation with your H. Be completely honest with him and let him know what debt you have. In fact if you haven't already you and your H should come together and list all the debts, interest payments, minimum payments, etc. that you both have. Once you know those numbers you need to come up with a budget that you'll stick to (you can create a joint budget even if you don't combine finances). You might be able to find additional money here that you can throw towards this debt.

2. Check out Dave Ramsey Total Money Makeover. Not everyone on this board agrees on all of his practices, but he is great at helping people get out of a consumer debt and get a handle on their finances

3. Consider selling your vehicle. Although you are only 11 months away from it being paid off, there is some equity there that you can use.

4. Keep the $600 you have, don't put it towards debt. Only use this in an emergency! Do not use it for clothes, entertainment, eating out, gifts, etc.

5. Cut up ALL of your cards!! I am like you, if I have credit cards I will use them so to resist temptation I don't carry them.

I am sure others will have good advice too. Bottom line is it's going to a lot work, communication and discipline to get rid of this debt, but you can do it! Stick around this board and you'll get a lot of good tips and motivation. Check in on the weekly accountability posts too. When I first came on here I had $4000 in CC debt, $5000 on my car, and $11,000 on student loans. Since coming here I've paid off $11,000 in debt along with having a wedding and doing a light DIY remodel on my house.

 

ETA: 6. You need to find out the balance on the 0% interest card. Even though it's set up for auto-payment it's a good idea to keep track of the payments and making sure they're being applied to the account and to ensure that it is paid off before the promo period ends. You do not want to pay back interest on it. Create an online account that you check in monthly to make sure.

hoffse

luv4LO said:

@Erikan73 I kind of tried that route.  I contact my local bank, a small town bank and they wanted some collateral. Which I don't have at all.  

You need to try again - most banks don't require collateral for personal loans as long as you can get approved.  The interest rates are higher than secured loans (like mortgages and car loans), but that's because there is no collateral securing them.  Look here:

https://www.sofi.com/personal-loan/

abrewer5

hoffse said:

luv4LO said:

@Erikan73 I kind of tried that route.  I contact my local bank, a small town bank and they wanted some collateral. Which I don't have at all.  

You need to try again - most banks don't require collateral for personal loans as long as you can get approved.  The interest rates are higher than secured loans (like mortgages and car loans), but that's because there is no collateral securing them.  Look here:

https://www.sofi.com/personal-loan/

^ Agree with this also. Go to multiple banks to gather info on what they offer and their terms for personal loans including interest rates. Good luck!

luv4LO

Thank you!  Will going to multiple banks to check into the personal loan hurt my credit?

abrewer5

luv4LO said:

Thank you!  Will going to multiple banks to check into the personal loan hurt my credit?

I would start by just going in and talking to them/explain your situation and go from there. I wouldn't apply at multiple banks. I would just find out if they require collateral on personal loans, their rates, etc. Once you gather the information and talk it over with H then I would apply at one bank to start (preferrably one you think will approve you without collateral and a decent interest rate) and see whether you're approved or not. 

*This is how I would handle it, others might have more experience with this type of stuff than me and might be able to give better advice.  

dragonstarjk

The collateral requirement is highly dependent on your credit score, the amount you are borrowing, etc.  At least that is how it is for my bank (I am a personal banker/consumer lender).  So yes, you can definitely go and ask what some different banks' policies are to at least get an idea, but you should definitely think of a back up plan and take some of the other advice you have been given as well, because you may not qualify for an unsecured loan.  If you don't qualify after a couple of tries, I wouldn't keep having multiple banks check your credit.

Also--it is fine to keep your finances separate but you should still have a joint budget and a joint discussion about money and debt.  H and I have separate accounts but we budget and pay for things together.

hoffse

The above advice is good.

Usually when there are multiple pulls on your credit from a variety of banks, banks know you are shopping rates and it's fine.  You can usually get quite far in the process before your credit has to be pulled though.  Most banks are (or should be) very willing to quote rates for you if you give them your info.  Just make sure the info you are giving them is accurate (or even a bit on the low side), otherwise you might be in for an unpleasant surprise when they do pull your credit and give you the actual offer.

Be prepared to talk with them and ask questions.  If you don't like what they are telling you, don't get frustrated, but be willing to press them a bit to see if there is anything else they can offer you.

Shopping for loans isn't particularly fun, but it's important to check multiple places before you give up or pick one.

dragonstarjk

Like usual, I agree with @hoffse.  To add to that--banks are required by law to NOT discourage any applicant from applying, so just know that they won't be able to give you a for sure answer on whether or not you qualify until you actually apply.  You may need to just be brutally honest with yourself and try to analyze whether what they are telling you is really an indication that you should proceed with that bank or try somewhere else. 

And yes, be honest--I can't tell you how many times I've heard that a person has good or great credit and then I had to turn them down.  It's not fun.  Also, be open-minded.  Debt consolidation loans (which really is what we are talking about here) are some of the most complex loans but also make for some good discussion about how to help you.  Make sure you find a bank that seems invested in the process and truly wants to help your situation, not just make money from you.  Banks in general get a bad rap, but there are some good ones out there.

short+sassy

Something else to try is calling each credit card company and requesting a lower interest rate.  I would probably tell them something like, "I've been considering opening a credit card with a 0% interest rate for 12 months and transferring this balance, because the interest rate is currently so high on this card.  But I would prefer to work with you and not open another account.  What can we lower my interest rate to?  As you can see, I have been a customer for X years and always make a timely payment."

Generally speaking, you'll need to be current on your payments with no late payments within the last 6-12 months.  And it probably won't work with the two store cards you have, though it doesn't hurt to ask.  Store cards are vultures and always have horrible interest rates.