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Greetings all,

I've gone from a constantly employed, frugal, saving and investment type of person a few years ago (I even won a TMF award here on the boards!) to a freelancer with a penchant for maintaining a lifestyle I'm unable to afford.

Needless to say, my savings and few investments that I've hung onto have suffered because of it. My debt to income ratio as well as my credit score (the saddest of the hits) are no longer sources of personal pride but rather dark wells of constant frustration and stress. I've reigned in my spending as best I can without slipping into a cranky depression or foregoing progress in my business endeavors. Could I do more to cut spending? Possibly, but not substantially so.

What's bugging me of late is that I feel stuck in APR's above 18%. In the next post in this thread you'll find a table of my current credit card & student loan debt (placed there for formatting reasons).

I'm currently enrolled in an AMEX hardship plan (such a great card company for consumers!). All of the other card companies have been repeatedly contacted for hardship assistance / APR reductions but none have budged or offered any kind of program.

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. I belong to no credit unions.

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.

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.

I appreciate all your time and knowledge.

Cheers,

iF
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CARD	APR	BALANCE	       INT/Month

AMEX	9.9900%	$ 8,036.59	$ 66.90
Citi	19.990%	$ 3,954.91	$ 65.88
Apple	22.990%	$ 5,441.49	$104.25
US Air	18.990%	$ 2,488.21	$ 39.38
Macy's	15.150%	$   324.98	$  4.10
Student	2.6250%	$11,582.19	$ 25.34
			
Totals		$31,828.37	$305.85
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I understand your plan is to pay the minimums and take aim at the debts.
That sounds good.

What's the figure you paid in August toward all these loans?

Is there any chance you can pay an extra $100 in September? (maybe be selling something for cash)

The rates are fiercely high, so you need to be sure that you pay the bills on time. After 6 months, call again and ask for interest rate reduction.

In my area, credit unions are easy to join (yes, used to have to be an employee or a member or something, but now it's just residency if any requirement). So, I think it would be good to find a CU with a branch near where you work or live and ask if you could become a member.

YeilB
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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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Pay Apple first. They have the highest rate. Send any extra money towards Apple and pay the minimums on the others until Apple is paid off. In the mean time, superglue that Apple card to the underside of a Polar Bear's testicles so you won't be tempted to use it again any time soon. The Citi card comes next. Tape your man card in the same place as the Apple card, because you can't have both a Macy's card and a man card at the same time. It's against unwritten international law.

xtn

PS - To the overly sensitive people... That last bit was humor. Yes, I know it's slightly sexist. So what? It didn't hurt anybody and I haven't set women's rights back thirty years.

PSS - Unwritten international law. HAHAHAHAHAHAHAHAHAHAHAHAHA reply if you remember the source thread.
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I remember. :)
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Thanks, Yeil.

In August I paid $669.78 toward these debts.
In September I will be paying $733.78 as the AMEX hardship program goes into month 6 and rates go from 0% to 9.99%.

An extra $100 in September could be possible but October looks more likely since August was a slim month for work, September is full, and I get paid 30 days after invoicing.
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Thanks for the reply, AJ.

I had forgotten that I do still belong to Western Federal Credit Union via a previous employer a few years back.

I'm currently applying for a debt consolidation loan to see what kind of luck I'll have with them.


As for stopping the digging, yes, I forgot to mention that the cards live in the desk and not in my wallet. Sadly, they're all maxed out and thus are unable to be used.


And yes, the hard truth is that I need to make more / spend less. October should see me moving to NYC. Against popular opinion this will actually result in me making more money even after the increase in living expenses is taken into consideration. However, saving for that move (approx. $2500) seems awfully contrary to debt pay down. I'm viewing it as an investment for that reason. We'll see...

Finally, yes, I keep records of every expense to an almost compulsive degree. I've been using Quicken since 2004 and almost cried when I lost 6 years of data when transferring the files from PC to Mac.
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Hahahahaha...

I have no rebuke. You are right. I'm glad my Victoria's Secret card doesn't have a balance, I'd then be royally screwed in the eyes of the International Court of Unwritten Laws and Laughter.

Always appreciate injections of humor! Cheers.
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I'm pretty sure the Man Code does allow - encourages actually - Victoria's Secret cards.
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If true, then the Man Code has been selling you short.

The Man Code should allow for nay encourage, a Coco De Mer card!

But I digress...
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You have a good plan. The only thing I would change is the order in which you pay off the cards. Paying off the highest rate card first makes the most financial sense. But you are wearing down. You need some emotional wins. Pay off the card with the lowest balance first. Macy will be gone before you know it. US Air not long after that. Then Citi, Apple, Amex and Student. You will feel better knocking down the number of creditors you have, and you will see the smaller balances get reduced quickly. That will give you some motivation. And when you pay one off you will increase the amount you can throw at the next one.

Also, sell whatever you can or get a second job to pay everything off as fast as possible.

Cheers,
4wheel.
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And yes, the hard truth is that I need to make more / spend less. October should see me moving to NYC. Against popular opinion this will actually result in me making more money even after the increase in living expenses is taken into consideration. However, saving for that move (approx. $2500) seems awfully contrary to debt pay down. I'm viewing it as an investment for that reason. We'll see...

So if I'm reading this right, you are now freelancing as something? Will the move to NYC be to do more freelancing, or is it for a more traditional job?

I have no problem with the idea of people freelancing to make money, lots of people do it all the time and make a good living at it. I guess my question is that if you gave up a job to go freelance, is it not time to maybe go back to a job where you can depend on the paycheck? At least until you get the debt paid off?

LWW
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"You have a good plan. The only thing I would change is the order in which you pay off the cards. Paying off the highest rate card first makes the most financial sense. But you are wearing down. You need some emotional wins. Pay off the card with the lowest balance first. Macy will be gone before you know it. US Air not long after that. Then Citi, Apple, Amex and Student. You will feel better knocking down the number of creditors you have, and you will see the smaller balances get reduced quickly. That will give you some motivation. And when you pay one off you will increase the amount you can throw at the next one."


I like this idea. I do believe this is the route I will take unless/until something else comes along. Many thanks for the common wisdom and factoring empotions into the equation.
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So if I'm reading this right, you are now freelancing as something? Will the move to NYC be to do more freelancing, or is it for a more traditional job?

I have no problem with the idea of people freelancing to make money, lots of people do it all the time and make a good living at it. I guess my question is that if you gave up a job to go freelance, is it not time to maybe go back to a job where you can depend on the paycheck? At least until you get the debt paid off?


Yes, you've read that right. I'm in the photo industry, have been for three years. It's a rather opaque industry to those not associated with any part of the production world. High-end commercial photography is freelance 9 gigs out of 10. It's just the nature of the beast.

Traditional jobs are out for me, save for extenuating circumstances that force a 9-5 upon me. The happiness/debt/job type ratios are still working in my favor. I'm happier now, in debt, than I was while working my "traditional" job.

My current debt is less a result of poor fiscal prudence, but, rather out of poor purchasing decisions when making initial asset purchases to get into photography (i.e. CC's instead of an SBA/Biz loan).

Good points though.
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