I am trying to get back on my feet after a long period of unemployment. I have no money in the bank...

I am trying to get back on my feet after a long period of unemployment. I have no money in the bank, so I have been living paycheck to paycheck and using all the money I could spare to pay my credit card debt, which was seriously delinquent. I am now caught up on my credit card payments. Should I pay only the minimum payment until I have a small cash emergency fund, or should I try to reduce my credit card debt as fast as possible to avoid interest? My credit card debt is $4000, and my interest is 14.9%. My income is $9 an hour before taxes.

Any advice would be very welcome.

Is this a homework question in your accounting class?

No, it's my life.

Can you immediately take out more credit from your credit card? If so, there's your emergency fund right there and you should just pay it off as much as possible.

Also beans and rice and frozen bulk vegetables. Lentils are good too unless you buy them from hipstershit places where they jack up the price.

If you absolutely "need" meat, you can find cheapish frozen white fish or poultry. Never eat out. Always remember that every little thing adds up.

Good luck user.

your life is a homework question in your accounting class

AND ITS NOW OR NEVEEEER

I AIN'T GONNA LIVE FOREEVEEEEEER

But everything you can in reducing your debt.

I don't even undertsand you can ask the question.

14.9% is massive. This rate is raping you and stealing years to your life.

Okay, then you have to reduce spending and pay off the credit card as fast as possible. Eat less, drive more, etc for 3 months and pay that shit off.
Also look for little shit you can do for extra cash.
Also look for a better job. jesus

>Can you immediately take out more credit from your credit card?
No, the bank closed the account after several months of delinquency.
>If so, there's your emergency fund right there and you should just pay it off as much as possible.
I do have another credit card, but the credit limit is only $500, and the interest rate is 18%, so I don't want to use it for an emergency.

The emergency fund is to be used only in exceptionnel case, you don't care about the rate!!!

Reduce first what is real : the 14% rate!!

>The emergency fund is to be used only in exceptionnel case, you don't care about the rate!!!
A credit card is not an emergency fund. Using a credit card for an emergency only creates a bigger emergency.

Oh my god... you have your priorities completely mixed....

Right now you pay 14.9% on your $4000...

This is a fucking emergency!! Your paying the bank for nothing...

You don't make an emergency fund until you're out of this crazy debt.

Interest is only about $50 a month, which is less than most people pay for cable TV. What if my car breaks down? Then I couldn't go to work, which would cost me even more money.

The interest rate only matters if you're going to pay the minimum forever. If you're going to pay off chunks at a time, it doesn't matter.

Don't stress too much about it OP. People on here are cynical fucks.

Legitimately wonder if you're a bit retarded.

You're not reimbursing your debt to avoid having a debt in case of an emergency that will likely not happen...

You have the debt now... reimburse it...

If you prefer you can imagine you build an emergency fund and use it each month immediately to reimburse the debt.

The idea is that I would save up $600 or so for an emergency and then use all discretionary income for paying off the debt.

I'll explain a last time.

>A credit card is not an emergency fund. Using a credit card for an emergency only creates a bigger emergency.

So you want to avoid having to use a credit card in case of an emergency. (let's say 10% probability) Why? because you gonna pay interests each month.
So in this case you prefer use your cash and not pay interest.

Now your situation :
You have a credit card debt running, with interest each month

You tell me :
>Interest is only about $50 a month, which is less than most people pay for cable TV
So now you prefer to pay interest rather than using your cash.

Do you see the contradiction? You are in the situation you want to avoid in the first place, and which has only a weak probability to happen, and you prefer to focus on the unlikely debt instead of the certain one.

Hope you got it this time. Not sure why I insist.

maybe you an apply for an interest free credit card for X amount of time. thats what i did to pay off my house interest free when i moved.

>So now you prefer to pay interest rather than using your cash.
If I were to only make the minimum payment for 2 or 3 months, I could save enough to have an emergency fund, and then I could start paying $700 a month toward my credit card debt, which would pay it off very fast. I could also use my emergency fund for debt payments at any time.
>So you want to avoid having to use a credit card in case of an emergency. (let's say 10% probability) Why? because you gonna pay interests each month.
I'm more worried about further delinquencies than interest.

mate just try to kill off the credit card debt first. fuck minimum payments

>If I were to only make the minimum payment for 2 or 3 months, I could save enough to have an emergency fund,
>I'm more worried about further delinquencies than interest.

If you can save up in 3 month enough money for an emergency fund, then you'll be able to pay enough each month to avoid delinquancy on an additional debt, don't worry, especially if your current debt is reduced.

I tell you, focus on the certain, not on the unlikely. Emergency funds are tools for debt free people. Pay your debt as quick as possible, and then you'll be a fresh man and you'll start building your emergency fund, without having minimum payments.

It will save you 150$, ie the amount you would pay on interest on the 3 month lost building your emergency fund.

Plus consider than if you build your emergency fund before, you'll be debt free in 9 month, against 6 month if you start paying now.

It means you have 50% more time for an emergency to happen, so you increase your risk actually.

>It will save you 150$, ie the amount you would pay on interest on the 3 month lost building your emergency fund.
Not exactly. Living paycheck to paycheck would save me the difference in interest paid, since I would still by paying interest either way.

You'll pay interest for 3 additional month.

9 instead of 6.

And these 3 additional month on your full capital.

$600 isn't enough for most emergencies.

OP for the love of god please don't listen to these idiots and instead look up Dave Ramey's baby steps.

1. get current on all your bills
2. save $1,000 emergency fund while making minimum payments on everything
3. attack the debt with the smallest balance first by throwing everything you can at it while making minimum payments on everything else.
4. repeat until debt free
5. now save a real emergency fund of 3-6 months' expenses
6. live your life and never go back into debt!

this method has worked for so many people (including myself).

How much debt were you in?

>attack the debt with the smallest balance first
you obviously have to stat by the highest interest not the smallest balance.

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