help please

For just about anything you want to get off your chest about credit cards.
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2014-the-new-me
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help please

Postby 2014-the-new-me » Wed Jan 08, 2014 12:21 pm

Hello...comments, suggestions appreciated. long story short..i have way too many credit cards---half of the balances are almost maxed out---some unused---self discipline on not using is hard for me--im addicted to plastic and swiping--however I am using this year to get my life in order and this is a priority for me..monthly pymts are now consuming about 400 of my paycheck-- and that is a no no..READY FOR CHANGE EVEN IF IT IS WITH BABY STEPS :) ..I am wanting to close some...I think I have 12---four majors--rest dept stores----everything I'm reading says dont close them--it lowers score (not sure what my score is, however I'm always approved for some type of cards so assuming it is not that bad) I want to close at least 4-8...understanding to start with the newest ones first...dont plan on purchasing a house or anything major anytime soon so maybe if it does lower score other cards will almost be paid- showing higher avail limit and score will go back up. so confused.
questions: should I close or just shred cards? or what are opinions? has anyone ever been in this situation and what did u do? any info that would help me make a sound decision would be appreciated. thanks.


MemberSince99
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Postby MemberSince99 » Wed Jan 08, 2014 6:37 pm

If you are in a serious bind, you need to get serious about being disciplined and get those paid off. Don't get in over your head that happened to me, and while you can rob peter to pay paul for a while, that only works for so long and the whole house of cards comes crashing down eventually.


I'd suggest you put your cards in a bowl of water and put it in your freezer. Freeze them. Then pay them off but don't close them until you get them all or mostly paid off. Why? Because utilization will keep your score low. You obviously need help to not use them so that will help you.


If you even find ways around that, then do what you have to do and shred them, but don't close them until you pay them off if your score matters. You say it doesn't but what if you need to move or get a new job or something like that? Plus your insurance goes up. There are costs for bad/mediocre credit.


So put yourself in a position where you can't easily use that plastic.


I hope this helps you and wish you luck with it in the coming year!

PhoenixDown
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Postby PhoenixDown » Wed Jan 08, 2014 6:49 pm

Some ideas:
1 - You need to be able to say how much you owe, to who, at what interest rates. If you look at how much interest your paying over a year, you will get serious about this in a heart beat.

2 - Start keeping track of this stuff in a notebook or better yet a spreadsheet. Things like Quicken or Mint are good and help you with reminders, but keeping a spreadsheet that you review daily - and then weekly - will help build discipline.

3 - Set a budget. Income, mandatory expenses and credit cards.

4 - Pay off the higher interest rate cards first. Don't settle for minimums as you will never pay these things off.

5 - See if you can consolidate what you owe into a more manageable loan. DONT RUN UP THE CARDS again

6 - Speaking of discipline - if its not set aside already in the bank, dont charge it!

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djrez4
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Postby djrez4 » Wed Jan 08, 2014 7:06 pm

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MemberSince99
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Postby MemberSince99 » Wed Jan 08, 2014 8:26 pm

Phoenix has some good tips, I thought of one more to suggest for you. Whatever you do, do not take out a loan to pay off the cards and at the same time, leave them open and free to be charged up again. If you had discipline it MIGHT be ok, but you could get yourself in even deeper that way. I'd be concerned you would just run up the balances again and have twice the debt.


Honestly, I got in over my head. What gave me discipline was for years I had no credit cards only a debit card. As a result, I simply was not free to just buy whatever I could not immediately pay for out of money I had. Because I did this for years it became habit, and thus even though today I could run up the cards I have, I simply NEVER spend what I can't immediately pay them for right now. It's very difficult for me to get myself into trouble that way. I treated these cards as if they are debit cards hooked up to my checking account. Once you get into that habit, and it's ingrained in you, you are good. Phoenix said this in tip 6 he gave just wanted to elaborate a bit on it and give you some encouragement!

2014-the-new-me
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Postby 2014-the-new-me » Thu Jan 09, 2014 9:35 am

thank you for your suggestions I appreciate it..i did read somewhere not to close until they all were paid off..so that is what I will do. thanks again...

2014-the-new-me
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Postby 2014-the-new-me » Thu Jan 09, 2014 9:37 am

thank you much for your suggestions. I appreciate it! I will definitely do a spreadsheet.

2014-the-new-me
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Postby 2014-the-new-me » Thu Jan 09, 2014 9:39 am

thank you...yes all comments had great ideas that I will put into action!

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jumbo
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Postby jumbo » Thu Jan 09, 2014 11:04 am

MemberSince99 wrote:I'd suggest you put your cards in a bowl of water and put it in your freezer. Freeze them.


Not a bad idea :ppp
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Postby takeshi » Fri Jan 10, 2014 8:58 am

Do not close any cards with a balance. It will mess up your utilization which is already bad enough.

2014-the-new-me wrote:not sure what my score is, however I'm always approved for some type of cards so assuming it is not that bad

Do not assume. Preapprovals do not mean anything. They're just marketing. I wouldn't worry about your score at this point. Worry about your utilization and getting it to 30% and then down to 10% or less.

2014-the-new-me wrote:should I close or just shred cards?

You should do whatever you need to do to prevent yourself from racking up new charges. Keep the accounts open. Pay them down using whatever strategy works best for you. I'd suggest continuing to keep accounts open even after you've paid them off otherwise your utilization isn't likely to improve. Once you get your utilization down then start closing accounts.

2014-the-new-me wrote:self discipline on not using is hard for me--im addicted to plastic and swiping

....and you're going to have to deal with this as well. Fixing everything does no good if you just go out and rack up charges. Do you have a budget? Do you track your expenditures? Do you routinely refer to these before shopping so you know what financial state you're in before you go shopping?



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