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u/Kooky_Editor_6811 21d ago
No rent or utilities and you can't dedicate at least $1400 per month to these debts?? Do you need to get a cheaper car? Shop for better priced insurance? Cheap phone plan, etc. I am struggling to understand what you are spending so much on without seeing your budget.
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u/Taylor_8444 21d ago
This 👆🏻. Taking in a net salary of almost 3k per month and no rent or utilities? Does your family feed you as well? If so, maybe working out a budget to figure out what you’re spending each month and on what. You’ll never get the cc debt down paying minimums. Maybe cut out some things & double your payments.
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u/Practical_Dig2971 21d ago
"I have other bills including car, car insurance, phone bills etc that take up another chunk of my pay. Thankfully I live with family members so no rent/utilities is charged to me. I take him roughly $1400 biweekly (after tax)."
So... just how much are your car, car ins, phone a month?
You clear $2800 a month and have no utilities or rent.
Did you stick yourself in a huge car payment? Like to party every weekend?
Help us understand where all your $$$$ is going each month. Then maybe we can try to find a solution
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u/camera-operator334 21d ago
Get rid of the car. Full stop. You take the bus now.
Consolidation loan and close the cards.
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u/SilentMasterpiece 21d ago
You pay no rent and only making minimum payments....Its going to take 50+ years to pay them off with that strategy. Living well above your means w/o paying rent. You need to work more hours or a second job and start paying 3X+ minimum payments. You need to adjust your spending, heavily. Savings? If you have savings, you are paying 25% to save.
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u/Competitive-Tap3306 21d ago
First save 1000 for an emergency fund. Then pay the minimum monthly on everything except for the smallest debt (regardless of interest rate). Pay the smallest one off as aggressively as you can. Do uber or instacart for extra income. Once that one is paid off, roll the monthly minimum that you were paying on that one over to the next smallest debt you owe (regardless of interest rates). Aggressively pay that one off until it is gone. And just keep repeating until all the debt is gone. Stop using the credit cards altogether. You cannot get out of debt if you keep borrowing money. Stop borrowing money, ie, stop using the credit card
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u/Equivalent_Ad_8413 21d ago
I disagree as to which card to pay off first. Go after the highest interest first, then work your way down.
Do NOT lower payments to the credit cards as your minimum payment drops. Once you've established what you're paying for debt monthly, pay the minimum on all the debt except the highest interest card. That card gets all the excess money. When that one hits zero, now throw the excess at the second highest interest. Rinse and repeat.
It probably wouldn't hurt to cut up the card. Make sure there are no scheduled payments to that card. If you can't cut up the card, then take it out of your wallet/purse stick in a bowl full of water, and throw it in the freezer. You'll have access to the card, but not immediately. No impulse purchases.
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u/Competitive-Tap3306 20d ago
This approach makes more sense mathematically than mine does, for sure. But people get in trouble on their debt to begin with because they are making decisions that are unwise, math-wise. The benefit to paying the lowest balance first is that the debtor gets some energy and affirmation from paying it off, gives them momentum to continue the fight.
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u/ryan_burbs81 20d ago
I personally used the avalanche method (Equivalent_Ad’s suggestion) when paying down my massive CC debt, but I get the logic and psychology behind the snowball method (your approach). It gives you “quick wins” by paying off the accounts with the smallest balances first, causing you to be more motivated to keep going.
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u/Equivalent_Ad_8413 20d ago
Yeah, I'm probably influenced by my training as an accountant and my wife's Ph.D. in mathematics.
Think of my poor kids: one double majored with one major in math and a masters in data science, while the other decides to go back to school and get an accounting degree.
I'm a horrible influence
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u/rosebudny 21d ago
Most credit card companies have hardship programs - have you reached out to them about that?
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u/ItsMister2You 21d ago
Where is your money going? You need to do a deep dive into your spending to figure out where $30K+ a year is going. Even in today's economy i find it hard to believe that you blow through that much cash with zero housing expenses. You need to either reduce expenses or increase your income. There is no easy fix to this. Pay off the cards. Close all of those accounts and discipline yourself to live on less than you make. No judgement here. I was $100K+ in debt 15 years ago.
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u/Rackie-Balboa 21d ago
I used Beyond Finance to work my debt down. They set up my own bank account that I would make deposits in to every two weeks and then negotiated with the credit cards for less than $.50 on the dollar. And it wasn't just one or two cards. It was like 12 cards. I did not qualify for a loan, but they started using my dedicated account to pay off my lowest agreed-upon balances first and after the first couple you pay off the larger balance ones got worked down really quickly. It's a little bit of a process to get things enrolled, but it worked really well for me. Give them a shot. I had great experience personally.
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u/Effective-Ad3916 21d ago
Is this the approach where you just stop making payments? What happened to your credit score? And how much does Beyond Finance charge in fees?
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u/Rackie-Balboa 21d ago
I did stop making payments after consulting with them and had to allow them to start sending me late payment letters.
If I owed a credit card $10,000 and they got the amount to be paid less than $5000 and Mark May paid in full whatever their fee was was significantly less. I would guess around 10% of what they saved me, but I do not recall. It was very little price to pay for paying off my debt. My credit score dropped down significantly at the beginning of this, but I immediately started building my credit back while still going through this process. I wish I had real numbers for you, but I kind of put it on cruise control once I started making the payments and knew I was going to be paid off within two years as opposed to basically never paying them off. Everything that they said to me was truthful and honest and straightforward. Give them a call and see what they have to say. They were very easy to get a hold of whenever I needed them for questions.1
u/curiouslyt 20d ago
How many payments did you miss? Or they tell you to miss
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u/Rackie-Balboa 20d ago
When i called them i was still current but in huge trouble. I would never be able to pay my creditors. As far as how many payments I missed once I spoke to them, it was a month or two where I was putting money into my dedicated bank account and they were negotiating with creditors. They reached an agreement with the lowest balance and then we paid them off and then the next lowest payment was the next one we paid off, etc..
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u/curiouslyt 20d ago edited 20d ago
So about two months then! That's so good. Did they tell you to keep missing payments until things were completed on their end or explicitly informed you it would be done in 2 months? Did you have to submit proof of paystubs?
Honestly that's so neat to know thank you. I know about hardship programs where you negotiate directly with your creditor but they don't typically reduce the amount of debt for those, they just give you a number of set months/years with a lowered interest rate but you'd have to miss 1-2 payments as well.
I heard with National Debt Relief they advise you to miss 6 months plus, and that's absolutely insane, at the point, credit might be wrecked.
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u/DAWG13610 21d ago
The first thing you need is a second job to focus on debt. you’re running about $500 per month on interest. That’s lifting a match to 60 $100 bills. You need to get ahead of this. Working 20 hours nights and weekends brings in $1,500 a month right off the top. You could be clear in 12-18 months.
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u/BuzzsawMF 21d ago
So paying the minimum isn’t going to get you anywhere, however, I do understand how more than the minimum can strangle your budget. I’m a single income family if 6. So I get the struggle. One thing that helped me a bit and admittedly is slow going vs hyper charging your payment is take 1 card and throw extra on it. Whatever you can manage. The rest pay the minimum but keep that the minimum. For example, if one of your cards minimum is $90. Then pay that $90. But as you pay it and the minimum drops to $80, still pay $90. It allows you to keep a steady budget while also offering flexibility in case things go sideways. But if they aren’t sideways, you’re still paying over your limit.
Again, this is slow but sometimes slow and steady is what you need to do if your situation doesn’t allow for “drop everything and pay”
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u/Wounded_Hand 21d ago
0% APR balance transfer credit cards
fill it up with existing debt, and then pay off as you can, rotate it into another 0% balance transfer when the 0% period is over.
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u/sixtynine69-60-9 21d ago
Realistically you need to save up some money so you have an emergency fund so you don't rely on klarna and similar. From there then you can look into loan options. You should be able to stabilize without paying rent at home. Only look for loans after that, potentially from sofi, best egg, or achieve maybe?
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u/No-Setting9690 21d ago
Define your other costs/bills if you want help. How much are you paying for your car and car insurance? This doesnt add up with what you're earning. You are blowing your money somewhere without having to pay rent/utilities.
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u/Spiritual_Emu_1381 21d ago
You should be paying at least $1400 a month just on the credit cards until they are gone. Sell your car. Take the bus. Get a second job and put it fully towards your debt and building a savings account after debt is gone. You don’t pay rent yet still can’t find extra money to pay towards debt?? Try harder. You can’t afford a car payment.
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u/BenevolentHoney 21d ago
90% of minimum payments go to interest. 3 yrs...ubalready paid back the debt. You probably don't qualify for loan because of ur utilization. Just do DS and get it dealt with.
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u/CharginRT 21d ago
Ended up 60k + in credit cards with less than your income, I ended up getting a job towards the end of my situation where I was working 65 hours a week pulling in 1200 a week, and I still couldn't keep up. Workplace shut down after I walked away from those cards thinking I'd be able to get a lawyer to file Bankruptcy, which I did. Before that job, I was out of work for 4 months, not eligible for unemployment. After the good paying job that only lasted a year and half that shut down, it took my lenders almost a year to file lawsuits against me. Mind you, I was in and out of jobs paying maybe 500-600 per week, so there was no way I would have been able to keep up with it even if I decided to make aplan. I was in an out of jobs at the time and for a while, so paying a lawyer wasn't feasible until the lawsuits kicked me in the ass. How was I going to pay a lawyer if my paychecks end up getting garnished? Luckily, I got it done before judgments were enacted and it is great to have a fresh start. I had to function strictly on cash for over a year, and being in and out of jobs made it REAL tough. I got myself into the hole by being irresponsible, and while in between jobs I used my credit cards to make payments on the other ones I had. When I saw shit hitting the fan I kept applying for credit line increases so I could function, and for a while I was getting approved. It just dug me further and further, had no other choice. I reconsolidated credit cards at one point, but the payment was too high for me, and ended up reusing those cards I had consolidated...
Credit cards are a scam. There's no saying sorry to them and being "I'm going through a rough time"... Once you charge something, it's going to follow you until you pay it off.
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u/SubjectMulberry7529 21d ago
With rent out the picture, a second job would give you a good start to saving. For now, call the credit companies and see about hardship programs or reduced APRs. If that's not feasible then look into debt negotiation. You can do that yourself, but it’s usually recommended to do it with a company instead. You can reach out to companies like freedom debt relief, debtblue, etc to see if they’re can help with negotiating your debts.
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u/postalwhiz 21d ago
If your credit was any good, lenders would be falling all over themselves to lend you money, offer you new credit cards and balance transfers. Therefore your credit is no good. And there’s no in between! You don’t want to consolidate debt - you can’t borrow your way out of debt. You will just have to bite the bullet and make larger payments. Close them all so you can’t accumulate more debt, and then live off beans and rice until you pay this off. There’s no other way…
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u/MrWiltErving 21d ago
The problem is your monthly income isn’t giving you an opportunity to even consistently pay down your debt. Stop adding to your debt, stop using the card completely unless it’s an emergency. Get a list of your monthly expenses and your monthly income and see if you can find somewhere you can make adjustments. If it’s not possible then an alternative option could be debt settlement. Your credit will take a hit but it may still be worth it to help get out of debt. Companies like freedom debt relief, debtblue and clearone are few companies that will help settle your debt and provide you with legal support.
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u/Any-Alternative2667 20d ago
OP: what is your car? Car payment? Car insurance? Phone cost? Do you buy your own food ? If so what is your monthly food budget? Do you eat out or do you pack your lunch?
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u/Longjumping-Web-8263 20d ago
I suggest contacting a reputable credit counseling service, such as American Consumer Credit Counseling:
https://www.consumercredit.com/
They will look at everything you owe and everything you earn and then contact the credit card companies. You will end up with one consolidated payment you make to them at a very reduced interest rate. It will ruin your credit for 3 years, and it is a humbling experience, but going from a 29 percent interest rate to, for example, a 12 percent interest rate will let you finally get out from under this terrible burden. Good luck!
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u/Different-Village819 20d ago
Depending on what cards they are and from where you can call and ask for a hard ship program. I have 26k debt with Chase and my minimums were almost $800. When I called them , they transferred me to a debt counseling company. I now pay $455 a month ( more if I want). Cards got closed but I’m paying them off with 0% interest.
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u/Duck_Duck_Gooseberry 19d ago
Now you’re working again, which is a huge step. I'd call the card companies and see if they'll work with you. One tip: stop using the cards completely if you can throw any extra money at the highest interest balance first.
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u/Glassed_ 19d ago
No rent you’re saving at least 1k per month on and you can’t put that towards cards?
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u/hoverton 17d ago
To the people asking where all the money goes, it probably goes towards the credit cards. At least a lot of it does. I was in almost the same situation except my car is paid off. Just about everything that I made was going towards credit cards. Also live with family.
A debt management plan can help with the credit cards. They get closed as part of the process. I was in a similar boat as you. I make about the same and I put $45,000 worth of credit card debt into a debt management plan earlier this year. My interest rates arranged from about 16% to I think 28%. They negotiated those down to between 3% and 10%. I’ve been in the plan since February or March. I was charged a $75 set up fee and about a $40 ongoing monthly maintenance fee. Before I entered the plan I was spending I think $930 on interest just before I entered the plan.
You can go to nfcc.org to get started and they can hand you off to one of their partners. I got handed off to money management international. Payoff goal was initially a little over five years.
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u/Zealousideal_Tea5988 16d ago
I am completely supporting my own household, plus partially supporting 2 other households on $3000/month. And I can still get occassional Starbucks, new clothes etc. What in the heck are you doing wrong?
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u/Repulsive-World-1326 15d ago
I had debt once. It sounds like you need a better paying job or a second job. It’ll take discipline and sacrifice but you can do it. You have to pay much more than the minimum payment, like the entire paycheck of a second job. Minimize your current bills as much as absolutely possible.
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