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Q: Credit Card debt ( Answered 5 out of 5 stars,   4 Comments )
Subject: Credit Card debt
Category: Business and Money > Finance
Asked by: 2joeyg-ga
List Price: $15.00
Posted: 26 Mar 2006 23:10 PST
Expires: 26 Apr 2006 00:10 PDT
Question ID: 712335
I have 4 delinquent credit card accounts.  I have been on and off with
the payments because of school.  I now have a full time job and I am
able to make all payments on time.

My total debt is around $4500 in credit cards.  I can afford to pay $600 a month.

What is the best way to get all of these accounts to be within good standing?  

Should I pay 1 off first, while making minimum payments on the other 3 accounts?

Do creditors negotiate, and is there a way for them to remove negative
items from my credit report?

My main goal here is to start building up my credit again.  Typically
with making all on time payments, and making above minimum payments,
how long until your credit score begins to improve?
Subject: Re: Credit Card debt
Answered By: cynthia-ga on 27 Mar 2006 00:24 PST
Rated:5 out of 5 stars

First, do whatever it takes to get all cards current and out of
delinquincy ASAP. While those payments are processing, review your
card statements carefully and place them in mental order by interest
rate. Starting now, you want to pay minimum payments on the 3 cards
with the lowest interest rates. On the remaining card (highest
interest rate), pay all the rest of your allotted money towards this
bill. Keep doing that until you have paid off the card with the
highest interest rate, FIRST. Then, move the next highest interest
rate card into that position and keep paying down the higest rate
cards first. Pay them in this order until they are all paid.

I would consider calling CCCS (Consumer Credit Counseling Services)
before you start this plan, primarily because they offer free services
to debtors, and they will negotiate with the credit card companies for
you, and get them to agree to update the Big 3 Credit Reporting
Companies as soon as you have been current for a specified amount of

I found the answer from an authoritive source:

..."The Debt Adviser, Steve Bucci, is the president of Money
Management International Financial Education Foundation and the author
of Credit Repair Kit for Dummies..."

Here's the relevant portion:

Bankrate's Debt Adviser: Tackling debt from multiple credit cards
..."You are on the right track by trying to get one of the three cards
paid off quickly. My advice is to stick to that plan, but make sure
you have enough to pay your other two cards' minimum payments while
concentrating on paying more than the minimum to the account with the
highest interest rate. Obviously, the larger the payment amount, the
quicker the credit card is paid off..."

Here's more excellent advice from the same site. It will help you
develop a plan to improve your FICO score.

A Dozen Credit Card DON'TS to Stay Far Away From

You sound like you're able to pay the debt down ok, but I'll throw
these in because thaey are interesting and informative:

Credit Card Debt Reduction & Settlement FAQ

Credit Card Options For Bad Credit Borrowers

A QUIZ:  Are you a Smart Borrower?

You might consider debt consolidation. There are non-profit agencies
that can negotiate with the credit card companies. This will aid you
in getting the credit card companies to update your credit to the Big
3 when you are current. These are very savvy folks that do this type
of thing every day, all day. When I did it, it was free, the company
below is non-profit with offices and credit counselors all over the

This is the company I used:

Consumer Credit Counseling Services

Check out the financial calculators page:

Financial Tools

Especially this tool:

What will it take to pay off my balance? 

And for the future:

FROM THE MOTLEY FOOL:  Using a Credit Card

I hope you find this information useful, and Good Luck to you!!


Search strategy used at Google:
pay off multiple credit cards
2joeyg-ga rated this answer:5 out of 5 stars
Thank you Cynthia your information was very helpful.

Subject: Re: Credit Card debt
From: webravi-ga on 27 Mar 2006 08:00 PST
I would consolidate the debt if you can. If you can get a personal
loan from the bank, pay off all the cards and then pay the bank. 
Interest rate would be at least half of the credit cards, so you cna
pay your debt down even more.  barring that, find a card with a low
introductory rate and transfer the debt there so that the interesting
rate won't be crushing.  Paying down the debt with interest rates of
7% versus 20% makes a huge difference in the total number of payments.
Subject: Re: Credit Card debt
From: jack_of_few_trades-ga on 27 Mar 2006 11:09 PST
Cynthia gave some great advice.  Being current on all your cards is
crucial.  Beyond that, simply pay them off as you are doing (paying
off the highest interest rate card first is good, but will only make a
slight difference overall).  Your plan of $600 per month is wonderful,
you will be out of debt before the end of 2006.

I must disagree with Webravi for this case.  Your debt is only 4500
and you're paying $600 per month.  At this rate, you will be out of
debt in 7.7 months at 7% interest (and I highly doubt anyone will give
you a loan at 7%) or 8.1 months at 20% interest.  The interest rate
will matter very little since you can pay off your loan so quickly.
If you apply for a new loan, you'll save less than half a month of
debt, and you will be putting another inquiry (an application for
credit) on your credit rating... those harm your rating.  And it is
likely that you will be turned down for the credit anyways.

One important thing to do is stop using the cards.  If you put $300
per month on the card while you're paying $600 then you will be in
debt for 18 months instead of 8 months.
When you pay off your cards, you may wish to cancel the newest one or
2.  But do not cancel the older ones.  Having a long standing history
with lenders is good for your credit rating.  So cancelling all your
cards will bring down your rating significantly...  But you may wish
to cut up your cards so you are no longer tempted to use them.  Paying
with cash (or a debit card) is a respectable and safe thing to do.
Subject: Re: Credit Card debt
From: helpone-ga on 17 Apr 2006 05:48 PDT
When I was in difficulty and needed help and advice I found the
services of very helpful and lots of information
was within the site.Hope this helps
Subject: Re: Credit Card debt
From: cynthia-ga on 01 May 2006 22:23 PDT

Thanks for the kind words and the 5 stars, I appreciate it. Are you
making any headway?


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