Getting myself out of debt and new cards...

For just about anything you want to get off your chest about credit cards.
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BauerHockey
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Getting myself out of debt and new cards...

Postby BauerHockey » Wed Jan 23, 2013 1:32 pm

Hi Folks,

This looks like a great place and I would appreciate any help possible.

During the past 2-3 years I've built up some debt on my only credit card and it is now around $8,500. The limit of the card is 14,000 and the interest is an absurd 29.3%.

Things may finally be looking up in terms of a new job and such so I decided it's finally time to do something about this and try to take care of it (or at least not have the interest rate kill me monthly).

So I look online and came across the Citi Simplicity card. Good news is that I got approved but my limit is only 4k. My score by experien was 735. I quickly decided to go to Chase for their slate card but they only gave me a $2200 limit on that. I think it is BS they neither could offer a clue on what the limit would be until after I went through the process.

Of course, these will help me, but should I have done something differently? I still have not approved my Chase card (didn't even come yet), so perhaps I should look at another one that will offer 0% for a yr+?

Did my credit score take a big hit w/ the second pull from Chase (they never told me my score, but approved me at the branch).

Thanks for the advice!


MemberSince99
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Postby MemberSince99 » Thu Jan 24, 2013 7:33 pm

Well if you would have done anything different, in my view, it would have been to pay your debt down to say 25 percent, ideal is under 10. You may have gotten more from Chase that way, possibly Citi as well. Citi appears to be decent on CLIs, Chase has a reputation for being a bit stingy and they are usually hard pulls, but as always YMMV. Still with good use over time Chase would open up.

So I would say yeah ideally utilization would have been lower, but you did not do badly considering.

Your score will surely take some kind of hit, probably nothing to be too concerned about, and the sting will fade with time - after a couple of months it won't hurt much and after a year not at all. I think in fact your FICO may increase despite the inquiry, due to having more than one account plus your better utilization, it might surprise you. The inquiry will of course cost you a few points but one inquiry isn't going to kill anyone, except the MyFico guys who would have a stroke over that. Don't sweat it. Life has real problems, this isn't one of them.

Congratulations on your new cards, pay down your debt and take care of them and your score will grow.

Sevenfeet
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Postby Sevenfeet » Thu Jan 24, 2013 9:12 pm

You have a similar situation that I have: a fair amount of debt made worse by the interest rate you are paying. Now you're interest rate is far worse than my situation...heck 29.3% is obscene. But all is not lost. Yes, you got two 0% cards and I suggest you take advantage of them. You got a total of $6200 of 0% wiggle room out of the $8500 you owe. I would transfer all you can to those two cards and spend the next year burning that total down as fast as you can...whatever your budget can stomach. That leaves your original card down to $2300..easier to manage certainly.

Next I'd go back to your original card holder and ask for an interest rate reduction to that of a better customer. Since your trajectory will be going down, they may be more willing to listen. They could still say no, but you won't know until you ask.
Cards:
American Express Platinum (NPSL)
Penfed Platinum Reward Visa ($28K)
Chase Freedom Visa ($25K)
Fidelity American Express ($20K)
American Express Blue Cash Preferred ($20K)
Bank of America Cash Rewards MasterCard ($20K)
Citi Thank You Preferred Visa ($9.5K)
Chase Sapphire Preferred ($7.5K)
US Bank Cash + Visa Signature ($7K)
Discover IT ($4K)

BauerHockey
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Location: NY

Postby BauerHockey » Fri Jan 25, 2013 6:56 am

Thanks for the advice, guys. Definitely makes me feel better about my decision, even though I see I should have gotten some debt off the bad card first. Glad to hear my score was probably not too badly hurt (I won't worry about the fico guys, haha).

It goes without saying that once I get as much as I can on the two new cards (I believe around 85% of the limit or so is allowed), I will attack the bad interest card first. The balance will sit on the other two cards for a few months without being touched, but I assume that is not an issue.

As far as pleading with the original CC later on to lower their rate, I just fear it is a subpar bank and frankly, I don't want to touch the card again. I won't close it, but will just use the other two as my regular ones. It was my first CC offer in college and I paid in full every single month for the first 6-7 years. And they reward me with crazy rates like that, haha. At some point down the road, I will look to get another card that has rewards and all that jazz since my two new ones seem to be mostly for balance transfer purposes.

Appreciate the help once again!

BauerHockey
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Posts: 3
Joined: Wed Jan 23, 2013 1:23 pm
Location: NY

Postby BauerHockey » Tue Jan 29, 2013 12:33 pm

One last question....I have the citi simplicity worth 4k. What would happen if I applied for their Citi® Diamond Preferred® Card? Assuming accepted, does the other citi card play any role in my credit limit for that diamond card?

Thanks again.



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