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Author: Dmndperl One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308858  
Subject: The grim numbers - very long Date: 3/12/2003 7:54 AM
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Well, I'm here about a month now and have spent many hours working and reworking the numbers. I have a plan. I didn't post my numbers at first, but now I'm ready to hear the gasps and bring out the smelling salts :)

As of Feb. 11, 2003

Capital One $9,708.25 9.9%
First USA $8,833.60 22.99% (Would not lower interest)
MBNA $7,017.25 %24.99 Lowered interest to 15.99% 3/1/03
American Express $2,822.09 12.99%
Bank Of America $1,172.53 17.24%
Chase $1,312.16 18.00%
AT&T Universal $7,253.04 19.99% (raised from 11%-would not lower)
Chadwicks $110.05 22.80%
Total: 38,228.97

As of March 12, 2003

Capital One $9,638.07 9.9%
First USA $8,808.78 22.99%
MBNA $6,946.42 15.99%
American Express $2,750.87 12.99%
Bank Of America $1,159.67 17.24%
Chase $1,285.18 18.00%
AT&T Universal $7,205.13 19.99%
Chadwicks $0
Total: $37,794.12 Down from last month: $434.85

Pretty sickening. I was only able to sock an extra $100 to credit debt this month because of lingering bills from my business that I closed in November 2002. The only thing I charged last month was two credit scores and my Fool membership, which I consider to be an investment.

I have a budget in place, and DH is firmly behind me. As soon as I possibly can, I will start transferring the FUSA balance to Capital One, even if it is $500 at a time. I start the snowball on FUSA on March 15, when I start paying them an extra $200 a month. In July, I will have an extra $540 a month to snowball them. It's pretty amazing that with the snowball plan, I will be largely debt free in about 30 months - even with these current horrible interest rates!

In a couple of months, I will call ATT and ask them to lower the interest. The CSR really acted like she wanted to help me out last time, but said she just couldn't at this time. At least she was really nice about it. I will keep after FUSA, even though I don't expect them to give even a little bit.

While laying all this out on paper, I came to some startling realizations, and made myself some promises.

1. I will look at my statements EVERY month. The $17.95 Ulu knife I ordered at Christmas and put on my ATT card will cost me several hundred dollars in interest because I missed the "change in terms" notice. I had a chance to NOT charge and keep the 11.00% interest.

Also, last June there was a fraudulent $49.95 charge on my FUSA card. I called them, and it was from a company called "Increase Your Penis Size". Go figure. They took it off the next month, but in looking over the bills from last year, I was charged for it in May, too!!! Stooopid stooopid stooooopid. I have no idea where they could have gotten my card number. And I know it didn't come from DH. Mainly because he doesn't have access to my cards, and he knows I would have DECREASED that size if he had charged something like that to my card.

2. I will monitor my credit usage. It's no wonder my card companies are in a state of panic. Over the last year, I charged over $14,000. I was trying to keep a small business afloat, and with not much income, I was charging our home utilities, etc. It didn't work - I learned my lesson - all I got out of it was huge debt and one year of total exhaustion.

3. I will stick to my budget. A little over 2 years with hardly any new clothes and no vacations is a small price to pay to be rid of this debt.

4. I will watch for balance transfer offers. I applied for a Discover 0% offer, and was turned down. This week, I got a Citi 0% offer in the mail till May 2004. I'm terrified to apply for it, but I guess it won't hurt to ask. All they can do is say no, and lower my FICO.

5. I will "deal" with any issues instead of sticking my head in the sand. I have 2 "over 30 days" from almost 2 years ago from Chadwicks. I had paid them off, but they sent me another bill. I didn't pay it, thinking the payment would catch up. Turns out, that final payment was for interest due. Holy Moly..that payment was $10.00!!! For not paying that $10.00, I will paying thousands in raised interest rates.

There are some good things about all this. I have finally come to grips with my credit nightmare. And My husband said the sweetest thing anyone has ever said to me. He said "For the first time in my life, I feel like financially I am not just trying to get through next week. There is a light at the end of the tunnel."

My FICO went up over 20 points in one month. Not sure why, but I'm not asking questions :) I am just sad we can't apply for a new house right now. We are SO cramped in my tiny 2-bedroom, and since I now work for the bank, I would get a 1% interest rebate on mortgages. With the prime at 4.25% it certainly would be a good time for us. Oh well. Maybe in 2 years.

Thank you all so much for your encouragement and support. I'll keep posting the numbers - and I hope you will too.
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Author: ishtarastarte Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 155020 of 308858
Subject: Re: The grim numbers - very long Date: 3/12/2003 9:49 AM
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Total: $37,794.12 Down from last month: $434.85

Pretty sickening. I was only able to sock an extra $100 to credit debt this month because of lingering bills from my business that I closed in November 2002. The only thing I charged last month was two credit scores and my Fool membership, which I consider to be an investment.


Hey, stop beating yourself up, look at those numbers again: you paid $434.85!!!!! So, it seems like a small step, but it's a step in the right direction!

You're doing great!

Ishtar

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Author: FemGeek One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 155023 of 308858
Subject: Re: The grim numbers - very long Date: 3/12/2003 10:05 AM
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Dmndperl wrote:

> Well, I'm here about a month now and have spent many hours working
> and reworking the numbers. I have a plan. I didn't post my numbers
> at first, but now I'm ready to hear the gasps and bring out the
> smelling salts :)

Sorry, no can do. Will you settle for a "You go, girl!!"? :-)

> Total: $37,794.12 Down from last month: $434.85
> Pretty sickening. I was only able to sock an extra $100 to credit
> debt this month because of lingering bills from my business that I
> closed in November 2002.

Let's look at in a different light: Despite those lingering bills
from your business, you still put an extra $100 towards paying off
your debt, AND you're down $434.85. That's nothing to sneeze at!
And where would you be this month if you hadn't spent those hours
reworking the numbers and planning your attack against the Debt
Monster? Quite possibly, your total debt might have gone up...?

I'm sure you'd rather you had never run up all that debt - believe
me, I know the feeling. BTDT. But you've put the brakes on now,
and you're reversing direction. It takes time and hard work, but
the longer we wait, the worse it gets. From here on, it'll get
better. Sure, there may be crises along the way that slow down
the snowballs, so don't beat yourself up if you have a bad month
where you don't make the scheduled progress...As long as it's
due to a real necessity, not a relapse. Hey, I had one horrible
month when I had to replace the entire fuel system in my truck.
Both gas tanks and the gas lines were rusting out; I was driving
a time bomb. $1800 later, the truck was much safer, though I
didn't exactly see an improvement in my CC totals that month.
But I didn't let it deter me, and it wasn't too long before
things were back on track. Eventually everything was paid off,
and believe me, it feels great! So don't give up, and remember
that even small steps in the right direction, will help you reach
your goal.

Best,
FG

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Author: Fallout2Queen Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 155030 of 308858
Subject: Re: The grim numbers - very long Date: 3/12/2003 11:02 AM
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My FICO went up over 20 points in one month. Not sure why, but I'm not asking questions :) I am just sad we can't apply for a new house right now. We are SO cramped in my tiny 2-bedroom, and since I now work for the bank, I would get a 1% interest rebate on mortgages. With the prime at 4.25% it certainly would be a good time for us. Oh well. Maybe in 2 years.


Maybe since you work for a bank you could see if you're eligible for a special rate on personal loans to help consolidate your debt and lower your interest rates. If you got a personal loan at 11% or 12% that would still be better than the rates on these cards:
First USA $8,808.78 22.99%
MBNA $6,946.42 15.99%
American Express $2,750.87 12.99%
Bank Of America $1,159.67 17.24%
Chase $1,285.18 18.00%
AT&T Universal $7,205.13 19.99%


Of course this is only a good idea if you then close all those cards (after paying the balances with the loan) and address the issues that got you into debt in the first place.




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Author: patchdodd Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 155045 of 308858
Subject: Re: The grim numbers - very long Date: 3/12/2003 1:02 PM
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As of Feb. 11, 2003

Capital One $9,708.25 9.9%
First USA $8,833.60 22.99% (Would not lower interest)
MBNA $7,017.25 %24.99 Lowered interest to 15.99% 3/1/03
American Express $2,822.09 12.99%
Bank Of America $1,172.53 17.24%
Chase $1,312.16 18.00%
AT&T Universal $7,253.04 19.99% (raised from 11%-would not lower)
Chadwicks $110.05 22.80%
Total: 38,228.97

As of March 12, 2003

Capital One $9,638.07 9.9%
First USA $8,808.78 22.99%
MBNA $6,946.42 15.99%
American Express $2,750.87 12.99%
Bank Of America $1,159.67 17.24%
Chase $1,285.18 18.00%
AT&T Universal $7,205.13 19.99%
Chadwicks $0
Total: $37,794.12 Down from last month: $434.85


Hi

Apparently this is my first post to this board so it is likely I'm missing something, but I notice that you paid down the most principle on your two lowest rate cards (Capital One and AMEX) at roughly $70 each while you only paid down about $25 on two of your higher rate cards (First USA and Chase). Wouldn't it make more sense to apply higher principle payments to the higher interest rate cards?

This, of course does not count your Chadwixks which you paid off,

Regards and well started!

Patrick

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Author: Dmndperl One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 155052 of 308858
Subject: Re: The grim numbers - very long Date: 3/12/2003 2:07 PM
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Hi Patrick..and thanks.

I think the numbers are like that because of the way the payments fell in the last month, and before I started getting serious about this with the snowball calculator. The AMEX came early last month, and I was feeling flushed and sent them a $100 payment. Actually, I think it was out of sheer panic about the situation and having NO plan in place.

Cap One is only 9.9% interest, so a minimum payment of $193 makes a pretty good showing. And thats the card on which I charged credit scores and Fool membership.

FUSA, on the other hand, is 22.99%, and even though I paid them a minimum payment of $220, only about $25 of it went to the principal. You can readily see why it's my snowball target, and is my main focus right now. Chase came late in the month, after the plan was in place, and I sent them the minimum due, which accounts for the low amt toward the principal. Chase is #3 on my Snowball calculator. Even though the interest is high, the balance is small compared to the others.

I think things will look different next month after a full month of snowballing. Can't wait till then! Thanks for your post.

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Author: Mewfer One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 155103 of 308858
Subject: Re: The grim numbers - very long Date: 3/12/2003 8:47 PM
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Good FOR you and good luck TO you!!!

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Author: allienic98 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 155109 of 308858
Subject: Re: The grim numbers - very long Date: 3/12/2003 10:30 PM
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Darlin, I am right there with you. My debt is only a few thousand smaller...but shrinking little by little every month!

I do have a question though. Have you thought about targeting your BofA or your Chase first? I know that with the APRs it doesn't totally make $ sense...but...if you free one of them up, they might give you a great BT rate to move other higher interest rate money around. I don't have either of those cards though, so I don't really know how they are with BTs.

Another reason I might snowball one or both of those first is that it will give you that sense of *accomplishment* sooner...and it will free up the monthly payment amount to them so that you can then add it to your next snowball card. And that will also make it less payments to send out each month and ease the hassle of keeping track.

Have you had at least 6 months of on time payments with First USA? And are you below your credit limit on the card? I have had very good luck with them as far as getting my interest rates lowered. Unfortunately, they are very strict about the 6 months before they will do anything though. My Card was in the low 20s% and after 6 months of on time payments, they lowered it (I think it was to 14% or there abouts) Then 6 months later I called them and I now have a 9.9%. I paid my bill online and what I did was this...when the statement for the new month was posted, I immediately paid my minimum payment due. Then each payday after that, I paid 1/3 of my snowball amount. So, as an example, if your minimum is $200 and your snowball amount is $75...I paid it like this: Week 1 - $200, week 2 - $25, week 3 - $25, week 4 - $25. Lather, rinse, repeat each month. When I would call them to get them to lower the rate, I would say something like "I have 6 months of on-time payments. And if you look at my payment history, you will see that I am aggresively trying to pay this card off because the interest rate is so high. I really like this card and would like to continue using it, but if I can't get the interest rate lowered I will have to continue my plan of just paying it off" This way they got the *threat* of losing my business, but I never actually said it. Both times I did this with them, they lowered my rate.

Anyway, your progress for the first month is great! Keep it up!

allienic98

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Author: Michaelzehr Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 155283 of 308858
Subject: Re: The grim numbers - very long Date: 3/14/2003 12:03 PM
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"I do have a question though. Have you thought about targeting your BofA or your Chase first? I know that with the APRs it doesn't totally make $ sense...but...if you free one of them up, they might give you a great BT rate to move other higher interest rate money around. I don't have either of those cards though, so I don't really know how they are with BTs. "

I second this.

Along a similar theme, if you get a consolidation loan from your bank I wouldn't necessarily close all the accounts you consolidate. My theory is that you should always have one or two more accounts than you need and KEEP THEM AT ZERO. Then they'll always be competing for your business. If they offer a BT, try to clear off an entire card. Then that card will also be competing for your business. Getting just one card to 0 can have an amazing domino effect on your interest rate. (Pay off the chase or BOA, get a 6% BT that you use to pay off FirstUSA... then get a 5% BT from First USA... etc.)

Good luck,
Michael


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Author: rko2 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 158721 of 308858
Subject: Re: The grim numbers - very long Date: 4/27/2003 10:47 PM
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WOW! I give you sooooooooooo much credit!

If it makes you feel any better, I'm $50K in debt. I was laid off twice in the last 5 years. I recently became employed and the company I'm with has until the end of the year to turn itself around or the investors are going to pull the plug.

I've done the calculations and finally saw an attorney. I wish it were possible let alone reasonable to pay off what I owe. I give you soooooo much credit!

You keep doing what you're doing. And my hat goes off to your husband for bsing so supportive.

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Author: johnmoni Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 158726 of 308858
Subject: Re: The grim numbers - very long Date: 4/27/2003 11:19 PM
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"I will look at my statements EVERY month."

We double check every item on the bill against the individual receipts, every month. Fortunately, there have been no more than a handful of errors in the last 20 years or so. It's worth the 15 minutes it takes to ensure that everything is correct. I guess I thought that everyone does that, don't they?
johnmoni

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