Tell me what to do with my CC debt

lbonga1 · July 2015

Here are the cards that I have:

Card 1: $205 at 19.99%, and $103 at 0% until Sep. 1

Card 2: $3214 at 13.24%, and $485 at 0% until Mar. 2016

Card 3: $785.16 at 14.9%

Card 4: $2325 at 0% until Oct 1. (I don't remember right now what the interest rate is after that, but I think it's about the same as card 3).

Card 5: $286 at 22.09% (ouch!)

Ugh, writing that out hurts. Right now I have about $300 a month on top of the minimums that I can use to tackle this mess. I also have the option of doing a balance transfer to card 2 for 0% interest until Jan. 2017, and would be charged a 3% transfer fee. Right now my plan is to transfer card 3 to card 2, and knock out card 5 then card 1 this month and next month. Then tackle card 4 then card 2. Thoughts on my plan or suggestions for going about it differently?

simplyelise · July 2015

I think your plan makes sense and sounds solid. It would definitely be good for you to be able to get two cards paid in the next two months. Have you cut up the cards and/or stopped using them?

If you'd like, sometimes people post their monthly budgets so that people can help them see where they might be able to squeeze a little extra out to make payments.

Sisugal · July 2015

Can you/have you already cut spending - no eating out, no new clothes, no travel, cut/reduce cable, internet - and take a look at cell phone plans?

Can you increase income? - Overtime, add a PT job, sell items no longer needed or being used?

Do you have a budget? If so - would you be willing to post it for ideas on where you might be able to "find" money to apply to your debt?

lbonga1 · July 2015

We're definitely looking for ways to increase income. I'm working as an independent contractor, so I'm trying to find more work there. FI has been a stay at home parent for the past couple years because childcare would have cost as much as he was earning at the time. But it's become unrealistic due to rising rent costs, so he has been looking for a job for a couple months. He had an interview yesterday that seemed very promising, so we're crossing our fingers.

I don't feel comfortable posting our whole budget right now, but we've cut almost all unnecessary spending. The only extras we have are our Disney passes ($73/month), which is the only non-free thing we do for fun, and $50 for eating out (never eating out is unrealistic for us). Cell bill is pretty low ($45/month), no cable, internet is a necessity for work and school for me ($70/month). Really, increasing our income would be the only option for paying it off faster, which we're working on.

Sisugal · July 2015

Right now is not the time for a monthly Disney pass!
That $73 a month would go a long way to getting rid of your debt. When you have the debt paid off - then reconsider the passes.

AprilZ81 · July 2015

I would get rid of the Disney passes for now. Cutting that expense alone will pay for Card 1 in 3 months.

ETA: The portion of card 1 that is accruing interest anyway... It would be 4.2 months to pay off the entire balance of card 1.

lbonga1 · July 2015

We got the passes before our income was suddenly cut. Unfortunately, once you sign the contract for the year, you can't get out of it.

als1982 · July 2015

I think your plan sounds good. And another vote to get rid of the Disney passes. You have more than $7,500 in credit card debt. It may be a harsh reality, but you simply cannot afford them.

bmo88 · July 2015

Have you tried calling Disney and telling them your situation? They might have sympathy to allow you out of the contract early. That could save you around $500 for the remainder of this year!

Sisugal · July 2015

What was the sudden cut in income? Your DH has been a stay at home dad and you have been an independent contractor. Surely rent increases have not caused all your financial problems.
Unless I have misunderstood your posts, it appears that you need to get real about your financial choices and why you made them. You CANNOT keep spending money you do not have .
You NEED to stop using credit to support your purchases.

lbonga1 · July 2015

Sorry, I should have been more clear. I had been working full time for a different employer for the past four years, but two months ago I was let go (long story, but part of it was due to missing work last year for pregnancy complications, but the outside company that should have handled my intermittent absence claim did not). I was also denied unemployment at first because the person I had a phone interview with misunderstood me and thought I was fired due to misconduct, so I had to wait another month and a half to have an appeal hearing. So I will be getting unemployment soon until I find a new job. We also ran into several unexpected, necessary expenses (such as the tires I posted about previously). So a majority of the debt isn't just willy-nilly "I feel like buying this today" kind of stuff. But I do realize how bad it has gotten, and I am not using the cards anymore. I already scoured my house to find things to sell and came up with enough to pay off card 5 and the portion of card 1 that was being charged interest. Really I was just asking if the plan that I explained was a good way of going about tackling it...

CuriousKiddosMama · July 2015

Yeah, that was very important information you left out. I would absolutely be looking into canceling Disney. That is an expense you do not need right now, and can sign up for again later when things are more stable.
Another thing to look into would be finding a cheaper place to rent. If your rent is getting to high, it may be time to look around.
Get your fiancé to deliver pizzas or whatever he can do on the side around your hours to make some extra cash, until you get all cards paid off and you are back on stable ground with your job. Then save a good 3-6 month emergency fund, so that you have a good cushion if something like this ever happens again.

Xstatic3333 · July 2015

PPs have had great advice! I think your plan about the order of paying things off is very solid. A side hustle for your H is also a great idea. Pizzas is a good way to go since he could still be with the kids during the day.

With the Disney passes, I am really hopeful that a company that prides itself on being family-friendly and guest-focused would work with you. If not, perhaps they would allow you to transfer the passes to someone else (maybe that you find on Craigslist?) for the rest of your contract. It sounds like things are in the works to allow you to have your cards payed off soon, so you can always sign up again once you're on better footing.

vlagrl29 · July 2015

If your DH is really a SAHD he needs to get a job. That alone would help your CC debt out immensly.

Tell me what to do with my CC debt

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