Question

TBM fam, I need some help. Here is my current debt situation: Card 1: $693. 33 @ 27. 49% Card 2: $1, 789. 82 @ 16. 74% Card 3: $4, 547. 66 @ 11. 99% Card 4: $6, 462. 33 @ 16. 49% Card 5: $23, 842. 46 @ 13. 40% Auto Loan: $10, 733. 22 @ 3. 79% I have been doing the snowball method since January and paying the minimums on all cards except cards 1 and 5. I haven't used any cards since December. The problem I have now is that the balance on card 5 is so high, that the interest is coming out to $250 a month and I am now 11 days past due on that card. The minimum on this card is $479 and I was only able to pay $250 towards it. I am past due by $229. Should I focus more on card 5 and pay the minimum on card 1? I went to the bank the other day to see if they can lower the interest rate on card 5, but they said no. :( Ugh. I am so stuck on what to do :( Any advice will be helpful! Thank you.  

Answer 1

I think I may be confused, but you shouldn’t be paying any extra on anything if you aren’t making minimums on all debt.  

Answer 2

Does your bank offer card transfer consolidation, where you might get 0% interest or atleast a lower % of interest on transferred funds?  

Answer 3

Are you still charging on card 5? Your minimum payment should be covering all of interest plus a little so even though the balance isn’t coming down quickly it should not be increasing. As long as it isn’t increasing I would keep paying minimums and focus on #1. If you are paying the card late there will be late fees and your minimum won’t cover those. You need to pay the minimum + the late fee. Don’t pay extra on card 1 if you are behind payments on anything.  

Comments

@hauteur she doesnt have enough to pay the minimum

Answer 4

Maybe I’m not understanding but if you are paying the minimums on all cards except the one you are paying extra on, how are you 11 days behind on the largest card?  

Comments

The minimum on card 5 is $479 and I was only able to pay $250 towards it. I am past due by $229. I should add that in my post!  

Answer 5

Why are you past due if you’re paying minimums? Or why are you paying more on card one if you’re past due on another? Get current on all cards before paying extra to any. And you’re so close to being done with the first card, just get it done! And also STOP USING THE CARDS if you haven’t already. Your post makes it sound like you’re still using them. In which case you need to get your spending under control and stop using them.  

Comments

I stopped using all cards in December of last year. I started this journey in January. The minimum on card 5 is $479 and I was only able to pay $250 towards it. I am past due by $229.  

Answer 6

1 2 4 5 3 Pay off in that order  

Answer 7

I would do 1, 2, 4, 5, 3, auto. If you can get 1 and 2 knocked out it will give you more money to throw at 4!  

Comments

First get caught up though. Only focus on one card at a time.  

Answer 8

Just something to watch out for; I was one day late making my minimum payment on a high balance card and because I “missed” the payment, they skyrocketed my interest rate. It went from 12% to 27. 99%.  And they wouldn’t change it back unless I made on time payments for an entire year.  

Answer 9

If I’m understanding your post correctly, you paid minimums on all but two. Those two you paid less than minimum because you didn’t have enough. So if that’s correct, the only choice you have is to scrape together the remaining money somehow. Sell something ASAP on FB marketplace. Ask the bank to forgive the late fee. The payment will go up next month if you don’t pay the rest of this months minimum.  

Answer 10

Check out the vertex42 calculator. Miko has a video on this.  

Comments

@meitner yes I agree. Really helped me.  

Answer 11

How much extra do you have to put on the cards each month?  

Answer 12

The is the order I would pay in full for each 1, 5, 2, 4, 3 plus minimum of car payment every month but it depends on your monthly income. What is your income?  

Answer 13

I get paid weekly and so I’ve made it a habit of dividing up payments into 4 and paying that amount each week instead of paying one large lump sum each month. Sometimes I will add an extra $5 or $10 or whatever I can manage for the week. This makes it a little easier on the wallet AND making multiple payments in a month, even if it’s the actual minimum payment, will help control that interest charge. I’ve knocked down credit card debt and a personal loan that both had high interest rates and high minimum payments by doing this method vs the large lump sum. This advice might not be much help at the moment since you’re behind on bill #5 but hopefully it will help in the near future.  I would just make minimum payments on everything for the time being till you get everything straightened out with #5. Maybe sell some things or do some overtime to come up with the extra money. ‍♀️ Good luck!  

Answer 14

I had two credit cards with high interest rates and high balances. I learned that sometimes there’s a number on your statement that can offer credit counseling and works with the companies to lower your interest and you pay down the balance much faster (we are paying less and will pay it off in 5 years instead of 33)

Answer 15

Maybe look into Tally the app that consolidates cc debt with a lower interest rate? It’s supposed to make the payments lower.  

Answer 16

Will you be able to catch up on everything your next paycheck? How steady is your income?  

Answer 17

The snowball method means you pay the minimum on all bills and anything extra left goes to your smallest debt. Don’t pay extra on your smallest and not be able to meet the minimum on others. That will just cost you more in late fees.  

Answer 18

Are you able to find a balance transfer card? If you can find a 0% card that doesn’t go above 13 when the trial period is over then you can throw more on the principal and will have a lower balance when interest starts taking effect again. Or maybe look into a line of credit if that’s an option?  

Answer 19

You shouldn’t be snowballing and paying extra until you can pay the minimum on all bills first.  

Answer 20

Following, your situation looks a lot like mine  

Answer 21

Call credit card #5 and ask if they have a hardship program. Explain that you want to pay the card but can't pay the full amount due anymore. This will mean that the card will be closed to nee charges but they can work with you on the interest, fees and minimum payment amount. Do this ASAP. Do you have an emergency fund? If you have mo savings, I would start that next. Start by saving $500. Then, pay off card #1. Next Increase your savings to $1, 000.  

Comments

@fredericksburg I was going to comment this same thing. Happened to me once and the only thing I could do to get form under it was close the card. It lowered my interest rate to 5% and made minimums easier to handle while I paid off other things to free up money in my monthly budget. Don’t accept their first offer of a “fix”. Keep saying “no I can’t afford that, no I can’t afford that” until you get down to their best offer of a solution.  

Answer 22

Some creditors wait for you to be 30 days past due and then they offer a program. Honestly the best programs I see are when u more than 60 days past but u risk getting a report. I just did 30 on my capital one and they offered 0. 99percent. interest but revoked card. I did a balance transfer when it was available or you can contact a CCCA. But you will get your cards closed. Otherwise I would go with just the min. For a time being

Answer 23

I would definitely focus on getting that one down to an affordable payment. Either call your cc company or for a bit use your extra to pay that down until it's at a place that you can afford. Then you can resume the snowball method

Answer 24

Can you apply for a 0% interest balance transfer card for 14-18 months?  

Answer 25

I’m usually on team snowball but because you’re monthly is so high in your highest balance, I have to be team avalanche for you. I believe that if you concentrate on paying number 5 and put extra payments on that one while you do minimums on the other ones, as your balance lowers, so do your monthly payments on that card (correct me if I’m wrong). From what I’ve noticed, the higher a credit card balance, the higher the monthly payments are. So if we work on lowering that total of our largest cards as soon as possible, the Lower those monthly payment requirements will start being and more impact we will make on those big balances.  

Comments

@terrel Avalanche method is to pay extra on the highest interest rate first, NOT the highest balance. The highest interest rate is card #1 However, the minimum payment on card #5 must be taken care of first.