Velocity Banking with Credit Cards: Pay off Credit Card Debt Fast
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- čas přidán 14. 07. 2023
- #VelocityBanking with Credit Cards. Using this week's real life numbers, I show you how I'm managing my #creditcards to #paydowndebt fast.
Get the worksheets I use in my videos and download Case Studies with all the client notes. This link will take you there... payhip.com/AskMeHowIBudget
The concept: Focus on ONE card, sleep all others. Once the primary card is paid down, move the next card into play. Rinse and repeat until debt is gone.
This is the worksheet I use most often in my Velocity Banking strategy. It tracks my expenses one week at a time. It keeps me focused on paying down my primary credit card.
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What is Velocity Banking? Velocity banking, PARTNERED WITH A DISCIPLINED BUDGET, is a financial strategy that uses a line of credit (in my case, a credit card) to #pay off debt. And, although it would be TERRIFIC if I had a# 0% credit card to do this, I do not. Yet, I'm still able to make it work with my high interest, high balance credit cards.
What does velocity mean? We usually see the term "velocity" as it relates to water flow. Velocity is the speed in which water flows. So, I think of velocity banking as the speed in which my money flows through the bank and out to the channel that needs the irrigation. If I keep my money dammed up in the bank, I'm only making the BANK money. If I direct the flow of money out of the bank and towards my debt, I'm making ME money.
NOTE: I am not a financial advisor and I do not provide professional financial advice; the information presented on this channel is presented for information and edutainment purposes only. Following any words, actions, or advice in this video or on this channel as professional financial advice is not intended and is the responsibility of the viewer, not the video creator. This is my personal journey for getting out of credit card debt.
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I started watching Christy’s Videos too and it took me a little while to get my head around it and how I could work it for my situation. I did my numbers and had a negative cash flow I was like oh nooooo lol. So I put all living expenses on like 4 credit cards and was able to get a PLOC (phew!!) with a credit union (I was rejected by my big bank so closing my account) and then pay off the smaller credit cards on the PLOC and then autopay those cards from there and just park my paycheck I feel a sense of relief because now I can breath a little and only focus on what i spend for groceries and gas, I’m glad I found velocity banking when I did. 🎉
Thanks for the comment. I’m in a similar situation. Thanks again!!!!
That sounds fantastic!!! Keep us posted on your journey! Love to hear this!!!
If I may ask, did your PLOC cover all of your credit card debts? That is, did it act like a debt consolidation loan or did you have a smaller amount for the PLOC and just transfer balances onto the PLOC as you paid it down? I doubt I could get a PLOC for the entire amount of my CC debt and not really sure if I would want to. I could likely get a HELOC for most or all of the debt amount based on my equity but I don't want to put my home on the line for the sake of revolving credit debt.
@@wdwood71 hey I’m just seeing your comment, the PLOC I got was $15K it didn’t cover all but I was able to use it to manage I’m able to put everything on auto pay even my mortgage it allowed me room to breathe
This works. I been doing it for several years.
I also Have 7 cards and with my income it becomes quite the shuffle to pay everything and try not to over spend but I'm learning and the sad part is I only get paid once a month so I'm glad I have these cards or I would be OUT of money. Thanks for the tips and I'll keep watching 👍🏻
You can call customer service and change the due date. I have 16 cards, all but 3 have the 28th as the due date. Have a great day.
I just started this week with 1 card. Fingers crossed😂
Keep us posted!
Thank you so much for this video! It has answered a question that I've trying to figure out every since I start learning about Velocity Banking! My God continue to bless you as you bless others!
Awesome Molly! Keep your videos coming. Tfs
Thank you! Your videos help me so much!
I'm so glad!
I enjoy watching your videos. I can't wait for the next update on Credit Card #1. So fun watching that balance getting paid off so fast!
Thanks so much! Me too!!! ❤
I love your videos. Very well done and clearly described and visualized. Got yourself a new sub! Keep em coming!
Awesome, thank you!
This would work for responsible people who pay for what they spend on the cc. Fools like me and my family buy things with the cc and only pay the minimum because we can't afford to pay in full for what we purchase on the cc. I do like the concept and have been using it as best I can but it feel like trying to bail water out of a boat full of wholes. I find that using the cards only to pay for things I will be paying for anyway, like the cable bill, is the best solution for us. Otherwise, we spend spend spend and can't keep track of all of these small charges which add up and we can't pay for.
New sub here. This was a recommendation video from CZcams. So Happy I found you! ❤❤❤
Welcome!!
Thanks for starting your channel. A little confused still with the concept but will watch the rest of your videos and Christy’s videos. Kudos to you for helping.
Old system: Paycheck -> Checking Account [earning no interest] -> Expenses
Velocity Banking: Paycheck -> Checking Account -> LOC [saving/ earning interest] -> Expenses.
Hope this helps, have a great day.
THANK YOU! Im a sub of Vanntastic Finance as well and Im about 4 weeks in and I was trying to figure out VB with multiple credit cards! You have helped me out!!! Just subbed 😎
Thank you so much! I’m glad you find it helpful! Keep me posted on your progress! ❤
Another job well done. Great video. I learned from Vans channel as well. Two ways now to implement velocity banking.
Awesome, thank you!
Thank you so much for this explanation it is a great concept. Im going to use this. I downloaded your free money tracker sheet. Thank you for your help with this. I watch Christy videos too. Im excited to use the money tracker!😊
Glad it was helpful! ❤
this is an amazing video!!! great explanation, I recently found velocity banking. I was having a hard time applying my situation to velocity banking, because like you... I don't a heloc , i have too many credit cards, etc etc
thank you!!!
Thank you!!! I'm so glad you find it helpful!!! 🙂
Thank you!! I have searched Christys’ videos on this and couldn’t find it, or one I could understand.
I have multiple cc!! I’m going to make this sheet and see if it help!
Glad it was helpful!
This video made me even more as confused about velocity banking. She's even said, this is confusing. I'm sure to watch it again next time around.
See if this helps:
Old System: Paycheck -> Checking Account (earning no interest) -> Expenses
Velocity Banking: Paycheck -> Checking Account -> LOC (park as much money as possible, for as long as possible, on the LOC) (saving/earning interest) (LOC functions like an unorthodox checking account) -> Expenses
@@Jesus-kt5dc many of them velocity banking ytuber have different style of applying it, some of them easy to understand, some harder in my opinion. thanks for your reply, makes some sense.
I have multiple, 2 or 3 is 0 percent interest. Do I use one of those for primary or no?
I follow Christy Vann's channel as well and I have to say your method is different from hers when it comes to multiple credit cards where she suggests to use one card only before working on the next your method seems a little easier to see. But to better understand, So as my example, I use my Capital One (CC#1) as my primary for every bill and variable expense and I also have my Discover (CC#2) just paying the minimum, aside from bank expenses like rent, insurance, car payment, and other installment loans coming from my checking. Your method suggests I should keep my bills on CC#1 but move all my variable expenses from that card to CC#2? And what if I have a medical-only credit card (CareCredit) on top of those? Should I split that cashflow with CC#2 to pay it down faster?
I think I'm slowly understanding the concept! I first learned about velocity banking by watching Christy Vann and now with your info, I think I'm slowly getting it but I have one question. When using your system I get paid every two weeks so should my budget and money tracker reflect that or should I still use the week to week?
I go week to week because it’s easier for me to manage my finances that way and stay on track. You want to use whatever works best for YOU. You can also sketch out something, if you’d like, and I can create something for your needs. There may be other people searching for a 2 week form. If that’s something that might interest you, let me know your needs/ideas.
@@askmehowibudget Thank you so much! Your channel and Christy Vann has given me hope in handling my debt situation. I’ll break everything down and see if I can do the week to week format. Thanks again!
I have multiple credit cards and will begin VB this week, yay! Just to get some clarification would I be applying whatever variable expenses to each card to satisfy that payment + the interest? My primary card for VB will have the bulk of my cash flow going into it. I know in your later videos (work study) you mention not to worry about the interest but I think I saw you added it.
When I started with this card I had a balance of $8,353 with a limit of $10,700 so my utilization was 78% ($8,353 balance divided by $10,700 limit = utilization). I had some wiggle room there - I didn't have to worry about interest putting me over my credit card limit. And to further clarify. Your miscellaneous bills will satisfy the minimum payment due for that month but it won't satisfy interest. Interest will still accumulate when there is a balance on the card. I'm finishing up a video right now that addresses this very question. 🙂
@@askmehowibudget Thank you for your response and will wait till your video comes out.😊
Thanks for the post. I'm confused. Why are you adding interest to your credit card payment?
My credit card payments includes the interest for the month.
Hi @MimaHope, I was doing this because I wasn't making my credit card payment to bring my balance down, I was making the payment for only the exact amount of the bill (or bills) I was about to put on the card. And because no part of that payment was intended to bring down the balance, I would pay the interest so the balance would not increase. I no longer worry about the interest on my multiple cards. Now, I just match a bill (or bills) to that credit card so that that bill is paid and the credit card minimum is satisfied. So I pay the credit card down the exact amount of a bill. I wait for that amount to come off my credit card balance, then I pay that bill with that credit card. Now, since that credit card minimum has been met with that transaction, I can then use the money I was going to have to come up with to pay that credit card and pay my primary credit card instead. The interest does add to the balance on my multiple cards but the interest/payment on my primary card is more so it makes more sense that I throw every available dollar at that one primary card to get the balance on that card down as quickly as possible. The end result is I'm paying off debt one card at a time. Every other credit card gets matched with bills. Once that primary card gets paid down or off, I move the next highest minimum payment due card into the position as my primary card.
@@askmehowibudget Thank you for this explanation. I am studying your videos and scrolling through the comments to learn more about how to deal with interest on multiple cards while paying down the primary card. I am trying to stay afloat right now but want to designate a primary card to pay off. THANK You for all that you do Molly! You are truly amazing and courageous sharing your get-out-of-debt journey with us. You're not only helping yourself but you are helping so many others rebuild their financial lives and well-being. People can nay-say all they want but God is on your side! He is for you and therefore, it doesn't matter who is against you! Amen!
@@lydiasalinas5106 Thank you so much!!!
Get the worksheets I use in my videos and download Case Studies with all the client notes. This link will take you there... payhip.com/AskMeHowIBudget
I’m looking for a way to pay down/off a car loan early. No Loc or whatever.
@cindysnyder5189 I know there are ways to do it, unfortunately, I don't yet have the knowledge to speak intelligently on that subject. I'm sure Christy Vann has some videos on the topic. You might also want to try Denzel Rodriguez and Robin at Purpose Plans and Profits. Christy has a Facebook page that's very active and you might find some great ideas there.
@@askmehowibudget Thanks
The only thing you can do to pay off a car loan early without a LOC, is throwing your cashflow at the principal. You must understand that one, once you throw that cashflow at the principal it's gone. Two check your car loan, or call your car loan finance company and ask if there's a early repayment penalty, that might not make it worth it. Lastly, if you proceed with cashflow principal payments, make sure you make it clear that you want to apply it to the principal. Your car loan company is not going to do it for you, they will actually treat it like a normal payment because it helps their pockets. Hopefully this helped, have a great day.
Following up, have you looked into bi-weekly payments? Depending on the length of the loan, it could pay it off a few months early.
I trying to down load your worksheet . And nothing shows up
I think it should be working now. Please let me know if you have any further issues. 🙂
Your title shouldn't have hashtags, then your hashtags aren't profitable and is this even in the correct genre?
Interesting video and clearly explained. I would change some of your categories so that you don't get the negative comments. Instead of Misc. Maybe Misc. household expenses and instead of Starbucks and tobacco say spending money. Everyone should have money they can spend without having to rationalize it. Those are areas we don't spend in, but I understand that some people do.
I really don't mind the negative comments. I agree, people should have money they can spend without rationalization. It bothers me when I see all these videos with titles like, "My Shameful Debt Confession". I want to say, "Honeeey, you owe no man (or woman) your confession." But do you see my face on here? Nope. Am I linking my channel with my social media accounts so all my friends and family can know my business? No, I am not. Why? Because there IS an element of shame associated with debt and how WE CHOOSE to spend OUR money. And it doesn't help that financial gurus who claim to be Christian, point the finger, call people names, and use churches as their own personal distribution system to sell their books and workshops. That is so gross to me. But then, that's ME being judgy because many people have had great success following a "tough love" approach. I, personally, am not a masochist and after a few years around the sun, I find unbridled arrogance repulses me. But I will still love, if only from a distance. And to each their own. So let the negative comments flow, as long as the negativity is directed at me and no-one else in the comments section, I have no problem with it. I just keep my eye on the prize. So if I can pay down my debt AND have my Starbucks, too, what a wonderful world that would be!🙂 Thank you for your comment and suggestion, Maria. You are very sweet!
Tobacco, really?
Husband has been smoking since he was 9. He’s going to be 53 this year. I don’t see that changing any time soon. 😂
@@askmehowibudget Gotcha haha, Im in that generation, great vid!
It's about being real with yourself. If you buy a six-pack of beer on Friday, it goes in your money tracker. You're only fooling yourself by not being completely honest with yourself about your money. Just sayin'...
$77 for Starbucks, that’s an easy budget cut right there.
It sure is! That is crazy to me and I spent it!!!!
Why does that matter to you? To each their own. If you want to spend it on candy or whatever else you want then that’s your business. She is showing a concept and how it works for her. Soon people will be saying "why not get healthier to avoid the medical bills?" Just accept what is freely given and work on making it work for YOU.
@@cocacolafiesta she was not offended by it, so why would you be?
@@prepperboss I wasn’t offended by it and why should I? But trying to dictate/suggest about her Starbucks purchase is something that is nobody’s business but her own. And obviously as we go through our expenses we will have to determine if it is worth it to us to do away with an expense or just enjoy life with our purchases it if it enhances it. Either way it remains our own business and why should she have to explain/justify her own personal purchases or needs. Hence, my comment.
@@cocacolafiesta I guess reading comprehension isn’t really your strong point. This nice lady is transparent and my comment was simple pointing out an easy cut to speed up her debt reduction. YouR response is very telling; you must be dragging your man around by a nose ring, as evidenced by you lecturing a complete stranger because you cannot understand a simple sentence, and have a bossy ass demeanor, I pity your other half.
How are you calculating the interest
I have a video covering how I handle the interest.