Debt Dumpers - 2015

[ruadisneyfan2]

So, tell me if I'm crazy...

As of now The Plan is I will pay off our cc debt by mid to late July (unless ds needs a car). Once they're paid off I need to replenish our Emergency Fund back up to $1000. It's taken a beating between the English tutor and tree trimming for some dangerous branches that were half-hanging/dangling over our sidewalk. Next I wanted to save up around $3000 for Christmas then start attacking dh's truck payment, probably starting in early Dec. (Yes, I know I should replenish EF now but I'm 5 weeks away from paying off all cc debt and it's so stinking close I can't stop now. Plus dh has a little slush fund for cigars & ammo which could be tapped in case of dire need.)

Plan B, in case we did buy ds a car, would be to keep paying down debt, then in the fall funnel the snowball to Christmas for a while, then resume debt pay down.

It all sounded great until I came across an envelope buried in papers on my desk. An offer from my visa card with 2 blank checks: 0% until Aug 2016 and the balance transfer fee lowered to 2% instead of the usual 3%. Well, there's only 2 cc's left to pay off and 1 is already 0% til spring and the other is only 1.99% and will be paid off by mid July anyway.

So it got me thinking about using it to pay off dh's truck. There is $8180 left on the loan. It would exceed my credit limit but I could pay off 7800, leaving some available credit so the transfer fee doesn't put me over the limit. I'd be paying the next regular monthly payment in 12 days anyway so that would pay the rest, and leave me with some leftover to put on cc's.

As a truck loan, the monthly payment is just under $500 and by the normal schedule it would be done by 11/2016. 17 payments = $8470. $290 more than paying it off now. Even after paying the $156 transfer fee, it would still save $134. The part that I like is that instead of $500/month as a car loan, it would only be $157/month as a cc payment and continue to go down. This helps a huge amount to pay down these other cc's, rebuild the EF, and have the Christmas money by early Oct. By Oct 8 I'd be able to attack the truck payment which by then would be around 7385. With no other debt I can put $1600/month on it. 7385/1600=4.6. So a little more than 4 months to pay it off from Oct 8 would bring us to late Feb. This is still 6 months before the 0% offer expires. By March I'd be full steam ahead on a bigger emergency fund.

So is this flawed logic? Am I missing something?

 

[Angeejoe]

So, tell me if I'm crazy...

As of now The Plan is I will pay off our cc debt by mid to late July (unless ds needs a car). Once they're paid off I need to replenish our Emergency Fund back up to $1000. It's taken a beating between the English tutor and tree trimming for some dangerous branches that were half-hanging/dangling over our sidewalk. Next I wanted to save up around $3000 for Christmas then start attacking dh's truck payment, probably starting in early Dec. (Yes, I know I should replenish EF now but I'm 5 weeks away from paying off all cc debt and it's so stinking close I can't stop now. Plus dh has a little slush fund for cigars & ammo which could be tapped in case of dire need.)

Plan B, in case we did buy ds a car, would be to keep paying down debt, then in the fall funnel the snowball to Christmas for a while, then resume debt pay down.

It all sounded great until I came across an envelope buried in papers on my desk. An offer from my visa card with 2 blank checks: 0% until Aug 2016 and the balance transfer fee lowered to 2% instead of the usual 3%. Well, there's only 2 cc's left to pay off and 1 is already 0% til spring and the other is only 1.99% and will be paid off by mid July anyway.

So it got me thinking about using it to pay off dh's truck. There is $8180 left on the loan. It would exceed my credit limit but I could pay off 7800, leaving some available credit so the transfer fee doesn't put me over the limit. I'd be paying the next regular monthly payment in 12 days anyway so that would pay the rest, and leave me with some leftover to put on cc's.

As a truck loan, the monthly payment is just under $500 and by the normal schedule it would be done by 11/2016. 17 payments = $8470. $290 more than paying it off now. Even after paying the $156 transfer fee, it would still save $134. The part that I like is that instead of $500/month as a car loan, it would only be $157/month as a cc payment and continue to go down. This helps a huge amount to pay down these other cc's, rebuild the EF, and have the Christmas money by early Oct. By Oct 8 I'd be able to attack the truck payment which by then would be around 7385. With no other debt I can put $1600/month on it. 7385/1600=4.6. So a little more than 4 months to pay it off from Oct 8 would bring us to late Feb. This is still 6 months before the 0% offer expires. By March I'd be full steam ahead on a bigger emergency fund.

So is this flawed logic? Am I missing something?

Does loan payments look better than CC payments to things like credit scores? What is your truck loan % currently? Is it high? Is that why you just want to pay it off? Our truck loan is 0.5%, Im fine with that, I wouldnt pay off early as having some kind of payment a month helps to continue to increase my credit score. If I were you, unless my loan % was high, I'd stock pile savings.

Loans like home & car don't make me nervous, it's cc debt that makes me very nervous. I'm sure others will say what makes them comfortable. You know what makes you feel comfortable.

 

[ruadisneyfan2]

Does loan payments look better than CC payments to things like credit scores? This is what I was wondering. My FICO is over 800 so I can't imagine it would wreck it. What is your truck loan % currently? Is it high? 4.09% Is that why you just want to pay it off? Our truck loan is 0.5%, Im fine with that, I wouldnt pay off early as having some kind of payment a month helps to continue to increase my credit score. If I were you, unless my loan % was high, I'd stock pile savings.

Loans like home & car don't make me nervous, it's cc debt that makes me very nervous. I'm sure others will say what makes them comfortable. You know what makes you feel comfortable.

What makes me comfortable is having nothing hanging over me except our mortgage. I'm just trying to do what I can to speed up the process to get to that point. I'd have a hard time stockpiling with the truck payment still hanging around. It's a 5 yr loan so it's not like I'm only 1-2 years into it. That's getting close to the last lap too.
We'd still have our mortgage to maintain a high FICO.
And yes, even though the truck payment would be to the cc, in my mind I'd still consider that debt as a car loan, not just stupid spending on a cc like the rest was.

 

[Dentam]

Mortgage and car loans are seen as better debt from what I've read so your credit score will be negatively impacted by having the truck loan on a cc. Plus you would have to max out that cc to get the majority of the truck loan on it. From what I've also read, having even one cc maxed out will negatively impact your score. If it were me, I'd keep the truck loan as is and continue to pay it off that way. I'd be more concerned with having a low amount in your emergency fund.

 

[Angeejoe]

What makes me comfortable is having nothing hanging over me except our mortgage. I'm just trying to do what I can to speed up the process to get to that point. I'd have a hard time stockpiling with the truck payment still hanging around. It's a 5 yr loan so it's not like I'm only 1-2 years into it. That's getting close to the last lap too.
We'd still have our mortgage to maintain a high FICO.
And yes, even though the truck payment would be to the cc, in my mind I'd still consider that debt as a car loan, not just stupid spending on a cc like the rest was.

Awesome credit scores!!!! Oh I get that it's not a stupid spending cc & that it's the truck, but that how it's viewed by outside creditors looking in. That's all, in the end it's just debt to me & you, FICO has a mind of its own. Lol

 

[Angeejoe]

Mortgage and car loans are seen as better debt from what I've read so your credit score will be negatively impacted by having the truck loan on a cc. Plus you would have to max out that cc to get the majority of the truck loan on it. From what I've also read, having even one cc maxed out will negatively impact your score. If it were me, I'd keep the truck loan as is and continue to pay it off that way. I'd be more concerned with having a low amount in your emergency fund.

We're thinking alike tonight! Lol.

 

[Dentam]

I just saw the notes you made in red in Angeejoe's quote - you have an amazing fico score so good for you! Ultimately it's up to you but I'd still want to keep my awesome credit score instead of going the cc route.

 

[Angeejoe]

Why is balancing the check book so depressing???

 

[gracie1]

So, tell me if I'm crazy...

As of now The Plan is I will pay off our cc debt by mid to late July (unless ds needs a car). Once they're paid off I need to replenish our Emergency Fund back up to $1000. It's taken a beating between the English tutor and tree trimming for some dangerous branches that were half-hanging/dangling over our sidewalk. Next I wanted to save up around $3000 for Christmas then start attacking dh's truck payment, probably starting in early Dec. (Yes, I know I should replenish EF now but I'm 5 weeks away from paying off all cc debt and it's so stinking close I can't stop now. Plus dh has a little slush fund for cigars & ammo which could be tapped in case of dire need.)

Plan B, in case we did buy ds a car, would be to keep paying down debt, then in the fall funnel the snowball to Christmas for a while, then resume debt pay down.

It all sounded great until I came across an envelope buried in papers on my desk. An offer from my visa card with 2 blank checks: 0% until Aug 2016 and the balance transfer fee lowered to 2% instead of the usual 3%. Well, there's only 2 cc's left to pay off and 1 is already 0% til spring and the other is only 1.99% and will be paid off by mid July anyway.

So it got me thinking about using it to pay off dh's truck. There is $8180 left on the loan. It would exceed my credit limit but I could pay off 7800, leaving some available credit so the transfer fee doesn't put me over the limit. I'd be paying the next regular monthly payment in 12 days anyway so that would pay the rest, and leave me with some leftover to put on cc's.

As a truck loan, the monthly payment is just under $500 and by the normal schedule it would be done by 11/2016. 17 payments = $8470. $290 more than paying it off now. Even after paying the $156 transfer fee, it would still save $134. The part that I like is that instead of $500/month as a car loan, it would only be $157/month as a cc payment and continue to go down. This helps a huge amount to pay down these other cc's, rebuild the EF, and have the Christmas money by early Oct. By Oct 8 I'd be able to attack the truck payment which by then would be around 7385. With no other debt I can put $1600/month on it. 7385/1600=4.6. So a little more than 4 months to pay it off from Oct 8 would bring us to late Feb. This is still 6 months before the 0% offer expires. By March I'd be full steam ahead on a bigger emergency fund.

So is this flawed logic? Am I missing something?

If I'm understanding you correctly - the cc would have to be paid off by August 2016 for no interest - right? So that is 13 months and the amount your planning on using is $7800 on the cc which means your payments would be $600 a month to have paid off in 13 months. $7800 divided by 13 months would be $600. make sure your careful because some cc if not paid off at the end of the zero percent are retroactive and will tack on interest from the beginning amount.

 

[ruadisneyfan2]

If I'm understanding you correctly - the cc would have to be paid off by August 2016 for no interest - right? So that is 13 months and the amount your planning on using is $7800 on the cc which means your payments would be $600 a month to have paid off in 13 months. $7800 divided by 13 months would be $600. make sure your careful because some cc if not paid off at the end of the zero percent are retroactive and will tack on interest from the beginning amount.

Yes this is correct math but our snowball is currently $1100-1200/month. Add to that the 2 cc's I'm working on which will be paid off in 5 weeks. yay! Those monthly minimums are $40 & 85. So once I'm tackling the car payment as our only debt, I can add the $500 regular monthly truck payment to our snowball.
So even if I err on the lower side of the snowball, $1100/month, come Oct after I've restored the EF and saved $3k for Christmas, my snowball thrown at the truck will look like this:
1100 snowball
85 visa 1
40 visa 2
+500 regular truck payment
1725 new monthly truck payment


I also typically hold aside the 3rd paychecks for Oct & Dec to use them for Christmas but with a healthy stash already set aside, I could pack them into my snowball too.

I crunched all the numbers and even with paying for our little 3-nt cruise in March I'd still have it all gone on the 2nd Thursday in January.

I know it's crazy but I feel like even if my FICO takes a little dip, it wouldn't be for long.
Can't be any worse than all the years we had lots of cc bills and made less money.

 

[dreamin_disney]

I'm finally doing a lot better. A few years ago I was in debt. Now I charge to get my rewards and pay off my cards each month. Dh has creditcard debt that's in his name. We discussed it today and He has 2 cards with high amounts but one that's the highest :/ is 0% until april 2016 and the other is 0% by oct 2016. My plan is to use out taxes next year to pay off part of the high one with taxes and the remaining with money I plan on saving plus hubby will make monthly payments. The 2nd amount he will make monthly payments and I will also help him since its our debt even though he has it in his name. He doesn't want me to help him but I told him its our debt because hes always paying. I'm hoping everything works out so we can focus on saving money for dd's collage class of 2017

 

[ruadisneyfan2]

I'm finally doing a lot better. A few years ago I was in debt. Now I charge to get my rewards and pay off my cards each month. Dh has creditcard debt that's in his name. We discussed it today and He has 2 cards with high amounts but one that's the highest :/ is 0% until april 2016 and the other is 0% by oct 2016. My plan is to use out taxes next year to pay off part of the high one with taxes and the remaining with money I plan on saving plus hubby will make monthly payments. The 2nd amount he will make monthly payments and I will also help him since its our debt even though he has it in his name. He doesn't want me to help him but I told him its our debt because hes always paying. I'm hoping everything works out so we can focus on saving money for dd's collage class of 2017

I'd start getting rid of it all now, regardless of who's name it's in. Unless you're considering divorce, it all comes from the same pot when you're married. College is ridonculous and part of the reason I want our debt all gone so I can help ds18 as much as possible. If you're able to start now, you might have one half gone by the time you get your tax refund next year.
Good luck to you!

 

[Miss Whimsy]

I have less than $20K in debt for the first time in... let's just say a long time. Which sounds terrible but is actually great! It's been a long time since I made positive progress, so getting from $21K to $19K and change is encouraging.

I really don't know how I racked up this much debt, yeesh.

 

[bcwife76]

Why is balancing the check book so depressing???

That's how I feel everytime I go online to pay bills lol (unless I'm paying off a balance on something!)

 

[Dentam]

I have less than $20K in debt for the first time in... let's just say a long time. Which sounds terrible but is actually great! It's been a long time since I made positive progress, so getting from $21K to $19K and change is encouraging.

Congratulations! I'm in a similar boat - lots of debt that accumulated when I moved to another state but still owned a house in the state I moved from due to the housing market crashing. Renters payments didn't cover the hefty HOA dues, ac/furnace died 2 weeks after I moved here, the list goes on. I finally sold the house earlier this month and was able to pay off 6k in debt! I still have a good chunk left to pay off but it sure feels good to be on the road to doing so!

 

[ruadisneyfan2]

I have less than $20K in debt for the first time in... let's just say a long time. Which sounds terrible but is actually great! It's been a long time since I made positive progress, so getting from $21K to $19K and change is encouraging.

I really don't know how I racked up this much debt, yeesh.

Great progress! Keep it up.
It's a great feeling to watch those balances drop.

 

[AquaDame]

So, tell me if I'm crazy...

As of now The Plan is I will pay off our cc debt by mid to late July (unless ds needs a car). Once they're paid off I need to replenish our Emergency Fund back up to $1000. It's taken a beating between the English tutor and tree trimming for some dangerous branches that were half-hanging/dangling over our sidewalk. Next I wanted to save up around $3000 for Christmas then start attacking dh's truck payment, probably starting in early Dec. (Yes, I know I should replenish EF now but I'm 5 weeks away from paying off all cc debt and it's so stinking close I can't stop now. Plus dh has a little slush fund for cigars & ammo which could be tapped in case of dire need.)

Plan B, in case we did buy ds a car, would be to keep paying down debt, then in the fall funnel the snowball to Christmas for a while, then resume debt pay down.

It all sounded great until I came across an envelope buried in papers on my desk. An offer from my visa card with 2 blank checks: 0% until Aug 2016 and the balance transfer fee lowered to 2% instead of the usual 3%. Well, there's only 2 cc's left to pay off and 1 is already 0% til spring and the other is only 1.99% and will be paid off by mid July anyway.

So it got me thinking about using it to pay off dh's truck. There is $8180 left on the loan. It would exceed my credit limit but I could pay off 7800, leaving some available credit so the transfer fee doesn't put me over the limit. I'd be paying the next regular monthly payment in 12 days anyway so that would pay the rest, and leave me with some leftover to put on cc's.

As a truck loan, the monthly payment is just under $500 and by the normal schedule it would be done by 11/2016. 17 payments = $8470. $290 more than paying it off now. Even after paying the $156 transfer fee, it would still save $134. The part that I like is that instead of $500/month as a car loan, it would only be $157/month as a cc payment and continue to go down. This helps a huge amount to pay down these other cc's, rebuild the EF, and have the Christmas money by early Oct. By Oct 8 I'd be able to attack the truck payment which by then would be around 7385. With no other debt I can put $1600/month on it. 7385/1600=4.6. So a little more than 4 months to pay it off from Oct 8 would bring us to late Feb. This is still 6 months before the 0% offer expires. By March I'd be full steam ahead on a bigger emergency fund.

So is this flawed logic? Am I missing something?

The only reason those offers exist is to get you to put off paying down your debt - they bank on you being "The Sucker" and either forget to pay it off, neglect to pay it off, or that you have something else come up in the meantime so you can't pay it off. 100% utilization is a scary place to be, even briefly, but ultimately if you don't mind a little risk and the hit to your FICO score, its not a bad idea at all. Just make sure you do not deviate from "The Plan" and have it paid off in advance.

 

[ruadisneyfan2]

The only reason those offers exist is to get you to put off paying down your debt - they bank on you being "The Sucker" and either forget to pay it off, neglect to pay it off, or that you have something else come up in the meantime so you can't pay it off. 100% utilization is a scary place to be, even briefly, but ultimately if you don't mind a little risk and the hit to your FICO score, its not a bad idea at all. Just make sure you do not deviate from "The Plan" and have it paid off in advance.

I would not be at 100% utilization. Well that card would be but we do still have 3 other cards that are paid off so not 100% utilization of all available credit.

 

[Dentam]

Got an unexpected refund check in the mail from my insurance company today for my homeowner's insurance. Over $250 that I'll put toward cc payments - woohoo! I love surprise money!

 

[Gena001]

Got an unexpected refund check in the mail from my insurance company today for my homeowner's insurance. Over $250 that I'll put toward cc payments - woohoo! I love surprise money!

I love surprise money too. (Who does not? ) I opened our water bill yesterday and I have a $200 credit! I was making auto payments and this bill comes quarterly so I was really shocked. Guess I need to adjust that one in my autopay. Maybe I'll call them and ask for a check....could put it toward something else.