How to tackle my balances?

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Whatamuji
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How to tackle my balances?

Postby Whatamuji » Fri Sep 11, 2015 1:16 am

So having paid off most of my AMEX balance from the bonus spending. It's time to focus on the two elephants in my proverbial room. My Amazon store card currently has a balance of $830 which $25 of it is due in November and the rest is due in July 2016. My Bank of America card has $650 on it and that is not due until July 2016 as well. I'm currently putting my spending on my Chase Freedom card which has 0% interest until November of 2016. However with every passing day that balance is continuing to grow. After expenses and rent each month I'm left with roughly $600. I'm thinking I'll tackle the BoA balance first since it has the highest utilization of my cards but I don't really like the idea of running up one card to simply pay off another card. Anyone have any suggestions on how I could tackle these balances in a more efficient way? Maybe a balance transfer?
Kohls: $300, Discover IT: $1.8k, Capital One Quicksilver: $2k, Amazon Store Card: $2.2k, BoA Cash Rewards: 1k, Chase Freedom: 3.2k, AMEX HHonors 3k


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CarefulBuilder14
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Re: How to tackle my balances?

Postby CarefulBuilder14 » Fri Sep 11, 2015 2:07 am

It sounds like your focus needs to go from bonuses and rewards to exterminating your debt ASAP. We talk more about rewards than avoiding interest and finance charges, but rewards are only supposed to be an afterthought.

Before we can help, we need to fill in a few gaps in the terms of your cards.

We need to know what your APRs are on each card, and if currently 0%, when the 0% expires and what APR replaces it.
We need your balance for each card.
Your limits we can see in your signature.
We need to know if any cards have special financing purchases in the balance. Some Amazon store card purchases might be included.

Generally, you want to pay off the card with the highest APR first. Special financing terms make the math a little more complicated.

Your post makes it sound like BofA won't require minimum payments between now and July 2016. I doubt that is the case.

The dollar amounts are still small. You can pay the cards off with only a little interest. I don't think a balance transfer would do much to help, and you have enough new accounts.

I'm more worried that a month ago you were talking about buying video games to meet minimum spend on Amex, without the ability to pay off your balances. That behavior has to change, and a balance transfer alone won't fix it.
Wallet: Prestige CSP SchwabPlat Freedom It Hyatt SallieMae AAPlat
SD: Arrival BrooksBros BCE ED IHG
Letting new accounts cool off since May
Really not sure what I'll add next or when

Whatamuji
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Re: How to tackle my balances?

Postby Whatamuji » Fri Sep 11, 2015 4:16 am

BoA: Balance: $685.59. Promotional APR / balance transfers till July 2016. After July 2016 APR: 22.99
Chase Freedom: Balance: $413.72. Promotional APR / 3% balance transfers till October 2016. After October 2016 APR: 22.99
Amazon Prime Store Card: Balance $25.74 / $804.18. Deferred interest until November 2015 / Deferred interest until July 2016.
AMEX: Balance: $47.58 APR: 19.24%

Sorry for the confusion. A little more information for you. I haven't charged anything to the BoA account in the last month or so and don't plan on charging anything to that card for a long while. Alot of my AMEX spend ended up being textbooks and such for school and thus financial aid took care of all of it. Concerning the Amazon card I don't typically pay the minimum required I usually pay $60 due to the way the payment is split between the two deferred interest payments.
Kohls: $300, Discover IT: $1.8k, Capital One Quicksilver: $2k, Amazon Store Card: $2.2k, BoA Cash Rewards: 1k, Chase Freedom: 3.2k, AMEX HHonors 3k

kdm31091
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Re: How to tackle my balances?

Postby kdm31091 » Fri Sep 11, 2015 5:42 am

I second shifting the focus. We like to talk about rewards as they are more "exciting", but the bottom line is you are getting zilch out of rewards if you are carrying balances.

So, I'd stop putting my everyday spend on a credit card if you cannot pay it off (you say the Freedom balance keeps growing) and shift your spend to a debit card. While most people shout "blasphemy" at such a thought, it will keep you in direct control of your money and you won't (and can't) overspend. For now, that beats getting 1-2% rewards.

Once your debt is gone, you can worry about rewards. Good luck.

Kevin86475391
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Re: How to tackle my balances?

Postby Kevin86475391 » Fri Sep 11, 2015 11:37 am

I'm going to be a lot more optimistic about this. I don't think this is bad at all. The math absolutely works out to you being able to pay all of this off without paying any interest. I would recommend against doing a balance transfer because there's no reason to pay transfer fees when you can easily handle this just by being diligent and organized.

Here's a little payment plan I put together to make sure you won't incur interest:

BofA:
Balance: $685.59
Months left at 0%: 10
Payment per month to avoid interest: $68.56

Chase Freedom:
Balance: $413.72
Months left at 0%: 12
Payment per month to avoid interest: $34.48

Amazon Prime Store Card
Balance 1: $25.74
Months left at 0%: Pay off in first month
Balance 2: $804.18
Months left at 0%: 9 (lost 1 month to Bal 1)
Payment per month to avoid interest: $89.36

AMEX:
Balance: $47.58
*Pay off now

Your first month you'll need to pay $176.36 and that will eliminate the AMEX balance and the 1st Amazon balance. From there you'll need to pay $192.40 each month until the balances are gone, which isn't too bad since it's only about 1/3rd of your discretionary income and if you do that you'll avoid any interest charges.

Note I didn't include this month, September as a month in the payment plan, to ensure that you definitely had it finished in time in case you've already had a Sept. payment or in case the 0% APR expires early in the month listed.

What you need to do primarily is make a pact with yourself to not add even another dime to any card balance that you won't immediately pay off in full plus the minimum amount shown above. So for example if you spend another $145.28 on the Chase Freedom, just as regular spending, then the absolute MINIMUM you should pay them is $179.76 ($145.28 new + $34.48 regular). Track it carefully and make sure you keep on target. Of course you may be able to - and should if possible - pay everything off early, just make sure the absolute minimum you do is the regular monthly amounts suggested above to avoid interest plus any new charges.

If you think you might tempted to let a new charge ride, then I absolutely agree with KDM that you should just use a debit card instead to not even give yourself that option.

Don't worry about utilization too much right now, just focus on steadily reducing the utilization across ALL cards and avoiding fees and interests. Utilization is just a temporary, month-to-month factor in your credit score anyway, and I strongly discourage you from even considering opening more credit or asking for a CLI until everything is paid off. If you really want to do that...GOOD, use that as motivation to pay off faster.

Whatamuji
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Re: How to tackle my balances?

Postby Whatamuji » Fri Sep 11, 2015 1:08 pm

I think there's been a bit of confusion caused on my part due to the wording of my original post. I want to reassure everybody I haven't put myself into a hole that I can't dig myself out of. Paying these balances off way early has been my goal all along. I think when I started this thread that I assumed everybody would understand that when I used the word "efficient" in my post that I also meant expediently. I will clarify better next time. I've decided that I will go ahead and do a balance transfer from my BoA card to my Chase Freedom so I can better leverage my funds.I'd much rather be concerned about paying three cards than four. And then put any other spending (mostly food) onto my AMEX card. The balance transfer fee was only $20 and some change so it's not much and that money has already been accounted for since I had $25 set aside for the minimum Chase payment anyways. And I can easily put $400+ (money that would have gone to two different cards) onto the Chase card and still pay $60+ to Amazon. I do appreciate all the advice given and I'm surprised at how fast you guys have responded to my post. I will update when I'm through paying the balances off.
Kohls: $300, Discover IT: $1.8k, Capital One Quicksilver: $2k, Amazon Store Card: $2.2k, BoA Cash Rewards: 1k, Chase Freedom: 3.2k, AMEX HHonors 3k

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CarefulBuilder14
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Re: How to tackle my balances?

Postby CarefulBuilder14 » Fri Sep 11, 2015 4:41 pm

I wouldn't have done the balance transfer, but it sounds like the wheels are in motion. I've never done a BT, let alone tried to stop one, so I can't give much specific advice there. It sounds like you saved yourself from having to currently make another $25 minimum payment to BofA by doing the BT to Freedom, but the $25 monthly minimums would have paid down your balance, unlike a $20 BT fee. A BT for funds that already have/had 10 more months at 0% seems wasteful.

Don't carry a balance on Amex. Pay off your current Amex balance and any future balance ASAP.

Pay off Amazon B1 quickly, and the minimums to avoid interest on the other accounts. Direct extra money towards Amazon B2, then Freedom.

I favor paying Amazon B2 down to $0 while only paying the minimum on Freedom because having to pay any retroactive interest would be a lot worse than having to start paying 22.99% going forward.
Wallet: Prestige CSP SchwabPlat Freedom It Hyatt SallieMae AAPlat
SD: Arrival BrooksBros BCE ED IHG
Letting new accounts cool off since May
Really not sure what I'll add next or when

Whatamuji
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Re: How to tackle my balances?

Postby Whatamuji » Sat Sep 12, 2015 12:27 am

Chase told me that once a BT has been authorized it cannot be stopped. Part of the reason I did the BT was because I wanted to go ahead and do it while I had the promotional offer available to me. Plus I get a few extra months to pay off my BoA balance and the credit utilization isn't through the roof as it would be if I had just left the BoA balance alone. Also doing the BT makes the payments a little easier since I only have to pay down 3 cards instead of 4 cards (Chase, BoA, Amazon,and AMEX). Was it necessary for me to do the BT? Absolutely not. But now instead of making $200 payment here and $200 payment there I can just make a lump sum $400 payment for example. And I'm definitely gonna keep my AMEX balance paid.
Kohls: $300, Discover IT: $1.8k, Capital One Quicksilver: $2k, Amazon Store Card: $2.2k, BoA Cash Rewards: 1k, Chase Freedom: 3.2k, AMEX HHonors 3k



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