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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308881  
Subject: Re: Wearing me down... Date: 9/5/2012 12:30 AM
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I've read up on the pros and cons of various debt consolidation loans, however, with my current numbers I don't think I'd qualify for much.

With degraded scores and a lot of debt, you are kind of stuck in a chicken and egg situation - the higher your debt, the worse your scores, the more risky you look to the banks, the higher the interest they charge, resulting in a longer time to pay down the debt.

I belong to no credit unions.

You could try joining one. Since you are a freelancer, you probably don't have eligibility through work, but many credit unions base membership on where you live as another option. Or if any of your relatives or roommates belong to a credit union, you may be able to join. Or you could join a credit union that allows you to make a one-time donation to a charity that they are affiliated with.

My current plan is paying the minimum due on all cards, plus any extra toward principle on the Apple card. Once a card is paid off (Macy's for example), those monthly payments will be moved to the card with the highest balance/interest ratio (Apple). That trend will continue until all are paid off. It's a good plan and I'm happy with it, however the high percentage rates are killing me.

It's a good plan, with the exception that I didn't see anything about stopping the use of the credit cards. To get out of a hole, you first need to stop digging.

I would also suggest that rather than looking at the 'balance/interest ratio' that you just look at the interest rate - the highest rate gets the extra payments.

Part of the frustration is a vague notion that I don't have any recourse. That this is it, what I'm stuck with until I pay them down. I'm hoping to hear from you about whether you think this is the case and if not, what programs, plans, ideas, help you've used in the past or have heard about.

Basically, you need to increase your income, decrease your expenses, or both. You've already started working on that, so that's a good start.
- Join a credit union and see if you can get better rates
- Figure out ways to increase your income
- If you don't have one, a roommate can help
- Sell any/everything that you don't have a need for and apply the money toward the debt
- Do you record every expense? Many people find that it helps them cut spending if they have to write it down.

AJ
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