It would be impossible for me to qualify for a Credit Card. I have not made a pyt to Capital One in almost a year. I'm trying to stay afloat with my Discover Card (closed) making planned pyts. Once paid then I will start paying Capital One starting Jan 2020 I can't pay both.
Second thing: determine your discretionary funds - everything you have left after paying necessities like rent, insurance, utilities, groceries(that’s groceries, not “food” since food is a broad and expensive category) . Give yourself an emergency buffer, something that can help cover emergency repair costs or transportation to work. $250 - $500 would be my bet. The rest goes directly to your credit debt.
Second thing, the first: of you have multiple credit lines, inquire with your bank about a consolidation credit line, to take what could be multiple interest rates and “consolidate” them into one. As long as the consolidation line of credit’s interest rate is t higher than your highest credit line, it’s a good deal.
Third thing: your support network. You have coworkers, supervisors, friends and family who want you to do well, for many reasons. Communicating honestly with your employer about these things could open resources to you like credit counseling to lower your rates, or coordinating a carpool to reduce your transportation costs. Friends and family could help fill the entertainment gap with less expensive alternatives. This is going to help take the social pressure off; plus, if they know you’re actively pulling yourself out of debt, they’ll want to help!
2) Consolidate all your debt with your bank (watch for interest rates spike)
3) If you will need a card to survive, and have no savings or anything, which I assume you don’t based on the fact you’re in this situation, transfer your balance into a card with O% transfer.
4) All extra money, tips, a dollar, or $1M or what have you, pay down your bad debt (credit card).
5) live below your means. 99.9% of people are doing what you’re doing and it will catch up to them. Live well below your means and make the sacrifices now to repair your credit, minimize your debts and only spend what you can afford. Do some self searching. Mind you, what you can afford does not equate to how much you make or have saved, what you can afford is after bills, after savings deposits, after debt repayment.
6) Never buy a new car unless it is to built credit for a larger investment purchase such as a house or commercial property, even then I would caution against it.
7) Research how to build a passive income and stop working for earned income (indentured servitude and enslavement). The future is yours. Don’t be discouraged, you can make it happen.
😎 If you apply for a card in the future, make sure the interest rate is $0%. If it is not, make sure that you don’t use your credit card. Instead, use your debit card. Credit Card limit is not your money and this should not be spent like it is yours. If you can’t pay it with your money you can’t afford it on a credit card. Stop trying to be someone you are not. That is unsustainable and you will become wealthier with a mindset that does not promote senseless spending. Frugality is key. Do your research, pay the debt, learn to use debt to your advantage and prosper. Everything will be okay.
1. If you haven’t already checked the National Student Loan Data System (nslds.ed.gov), do that to get a complete global view of your loans, if you’ve taken out multiple loans. You can also get a free credit report from different services and see all three credit reports; this will also show you how many loans you have outstanding. If you’ve taken multiple loans, they will all likely have different interest rates and minimum payments.
2.a. If your loan(s) are federal, you can apply for a Direct Consolidation Loan to bring multiple payments and interest rates down to one. StudentLoans.gov is where you go to apply for that. This might come with certain time restrictions on repayment, but remember: student loan interest is TAX DEDUCTIBLE.
2.b. You can consolidate ALL loan types privately as well, although that may remove certain benefits of federal loan programs, like loan forgiveness for public service, and income-based payment options.
3. If you have one loan with a private lender, and your ability to pay the loan back has changed, then you can refinance the loan for a different repayment plan. This might also result in a better interest rate. In any event, the interest is tax deductible; hopefully you’ve been deducting!!
4. If you haven’t been deducting your student loan interest, go back and amend your federal and state tax returns as far back as you can go. Some states have refund limits, like VA where you can only be refunded for amended tax returns within 5 years of filing date.
5. As a last-ditch effort, hire a licensed fiduciary or accountant and get professional help. Although it sounds like I’m saying “spend money you don’t have!”, what I’m really saying is hurt a bit more right now to make the future less painful. Yes, it can run $100-$300 for a session, but it is seriously worth it to have someone with years of experience helping rich people stay rich look at your debt portfolio and restructure it for, do the negotiating for you.
I hope this is somewhat helpful.
There are non profit agencies like Consumer Credit Counselors, who can do a repayment program. Better than bankruptcy, but I heard there are now a lot of imitators who charge exorbitant fees. Definitely check out any company you are considering with the BBB and scam alert first.
That sounds awesome. Congratulations 🎉
I don't believe in closing credit card accounts. Freezing them though sounds like a great option.
I have wanted to try Dave Ramsey's Snowball approach and in fact have started several times. Unfortunately I, life happened and I charged again. I lost half of my income when I turned 65. My LTD stopped.