I am getting a check for 3586 anyday. I don't know what to do with it. Should I pay up my rent a few ?

Question

months. And if so, how many months. I also owe on credit cards a total of $4828. I owe $900 to Target, 2300 to Citibank, $1000 to Capital One, $100 to JC Penney, $78 to Victoria's Secret, and $450 to Macys.

I do work full time. I get 365/week.

Which should I do...pay up the rent and then put my weekly checks to the credit cards....or pay up the highest 2 cards and transfer balances of the others to the ones i paid off with the high balance. (They have a 6.9% balance transfer fee)....or should i do something else?

Answer 1

The first thing that you should do is to set aside $1000.00 in an Emergency Bank Account.  An account that you can't easily get to.  Not asccessable through your ATM card.  Then you should use the rest of it to start paying off your debts.  You may want to consider getting a temporary part time job so that you can get your debts paid off as soon as possible. You owe a total of $9656  which is more than half of your total yearly income.  You need to cut your spending and increase your income to get rid of this debt as soon as possible.  Here is a plan that will help you.   You can skip the emergency fund in section 1  if you set aside $1000. from the check you are receiving.  If you work the plan, the plan work will work for you.

1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Put everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an "emergency fund" category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don't even have to worry about it. You must cut your spending and live on less than you make.

2.First get current on all of you debts and make no more late payments. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.

3.Pay the minimum due on all of your debts and then put your extra money towards paying off the highest interest one first. After you get that one paid off, you put the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off faster. When that is paid off, you put all three payments towards card #3 and that one will be paid off pretty quickly. As an example:

To start :

Debt #1 (highest interest): minimum payment+ extra payment

Debt #2 (middle interest): minimum payment

Debt #3(lowest interest): minimum payment

Debt #1: paid off

Debt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra payment

Debt #3: minimum payment

Debt #1: paid off

Debt #2: paid off

Debt #3:Mimimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.

That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late payments. This works no matter how many different debts you may have.

4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Put that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.

5a. When you have your emergency fund in place, add a category for "fun" to your budget. Save for a holiday, a vacation, a big screen, or dinners out, whatever goal you want. Remember to enjoy your life.

5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money. Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.

5c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.

Answer 2

Pay off whatever cards have the highest  interest rate with the large check.  In the long run you'll be spending less cash.  Pay your rent with the small weekly checks. Good luck!

Answer 3

Pay one month of rent and apply the rest to credit card debt. There are two good ways of getting rid of credit card debt. The cheapest is paying off the ones with the highest interest rates first. The most motivational is paying off a bunch of the little ones first. That way the bills that come in are fewer and fewer. I wouldn't do any transferring. Just continue to pay them until they are all gone then cut up those cards! Maybe keep one low interest no fees card for emergencies (although an emergency fund in savings is much better) and to keep your credit rating good, just try to pay the whole balance every month so you don't gain a ton of interest.  

Answer 4

PAY YOUR CREDIT CARDS - RENT DOSEN'T CHARGE YOU INTEREST!  

Answer 5

I would pay of whatever has the highest rate of interest- it is probably the credit card and since you owe the most on that try and clear the majority of it!

Also i agree with the poster who said to consolidate your debts-it makes managing debt much easier!

Hope this helps!!

Answer 6

I agree with poster one.  You'll still owe about $1200 after you pay off the major part...then stop using credit, but if you do use...pay it immediately or within the  30 days...it will help build your credit and strengthen it.

Answer 7

Hi there,

Credit card debt is a massive problem millions of people are facing at the moment and can really ruin your life. Repossessions are going through the roof because people cannot afford to live with the massive rises in the cost of living.

You really need to minimise your credit card debt and ideally get rid of it.

Firstly, consolidate your cards into one with a zero interest deal, if you can. Then get rid of all the others and start paying the one that is left off. It does mean you are going to have to cut back and live within your means, but that is no bad thing.

Paying off your credit card debt can take some time and will require discipline on your part but it can be done.

Hope that helps, but please let me know if you need any more info :)