Good credit w/ high debt to income ratio......

[inneedofhelp]

I have mentioned this before, and I apologize for the repetition....but I am just having some inner conflict about what to do.....

My credit score is nearly 700---which, yeah, I know isn't so good, though at one point I thought my 711 score was super!

I cannot get credit because of high debt to available credit and income ration. The current credit I have has the default interest rate, so if I access that credit, then my interest limit on my overall balance will go from around 18% to over 24%.

I have very little emergency savings, unless you count stored vacation time, which is not accessible for emergencies, such as car repairs, etc.

Currently, with all of my budget cuts and frugal living, I have barely enough for food---and I usually end up overspending on food when the desire for maybe a fast food taco or coffee hits me. This of course puts me in a situation where I don't have money for oil changes or just, anything random, like a doctor's visit (the co-pay and the parking), or the vitamins I want to buy, etc. Right now it is kind of bad and I am having to buy personal toiletry items online with credit that I have for online stores.

In this situation, would you risk ruining your credit if it meant you could save over $1,000 a month? I know the smart thing is to just keep going along and eventually things will pan out....I am just having a momemt of weakness....I have never missed a payment on my loans or cc's, so missing one intentionally seems weird to me.

[disneysteve]

would you risk ruining your credit if it meant you could save over $1,000 a month?

What exactly do you mean by this? What is it you propose doing to save $1,000/month?

[inneedofhelp]

My cc and loan bills are over $1,000 per month.

[disneysteve]

My cc and loan bills are over $1,000 per month.

So you are thinking about not repaying the money you borrowed? Nope. I'd vote against that plan. I'd be looking to cut everything I can possibly cut, sell everything I don't absolutely need to survive, get another job to boost income and repay what I borrowed.

[inneedofhelp]

At this point, I have pared down my budget to bare bones, and the only thing I could sell is a few used books, and part-time jobs are difficult to find in my in my area, as a person who already has a 9-5 job.

[boosami]

The current credit I have has the default interest rate, so if I access that credit, then my interest limit on my overall balance will go from around 18% to over 24%.

What do you mean by this? If your card rates were pushed up to 24% it is already affecting your overall balance. Rate hikes don't wait to take effect until new charges are incurred. If you had a balance of $5,000 @ 18% and they changed it to 24%, you now have a balance of $5,000 @ 24% whether or not you made any new purchases.

This will change with the new credit card laws set to pass in Feb 2010. They will no longer be able to retroactively apply rate hikes to your past charges unless you default on paying your CC.

Post your monthly spending and income and folks here can help you squeeze some money out to start paying down that debt.

[inneedofhelp]

What do you mean by this? If your card rates were pushed up to 24% it is already affecting your overall balance. Rate hikes don't wait to take effect until new charges are incurred. If you had a balance of $5,000 @ 18% and they changed it to 24%, you now have a balance of $5,000 @ 24% whether or not you made any new purchases.

This will change with the new credit card laws set to pass in Feb 2010. They will no longer be able to retroactively apply rate hikes to your past charges unless you default on paying your CC.

Post your monthly spending and income and folks here can help you squeeze some money out to start paying down that debt.

Over a year ago, my cc's from a particular bank were given the auto default amount. I had the option of rejecting the rate increase, with the provision that I would not be able to use my card. If I opted to use my card, then the interest rate would jump to 24%+ on the total balance.