hokieian

I just wanted to share some excitement.

I got married last May (2003). When we got married we had a combined $10,000 in credit card debt (edit: i did the math last night and by the time all was said and done, we ended up paying over $14,000 in order to pay down the debt).

I just mailed the final payment this morning. We have been working our asses off and putting every last penny towards paying down the balance. It feels really good, and I am never getting into the credit card mess again (I know - easier said than done).

But on an ironic note, we found out that my wife is being laid off next week - just in time to make the final payment on the credit cards. Unfortunately, I am in grad school and my stipend is hardly enough for one person to live on, let alone two (the wife is the primary bread winner right now and she has no leads for a new job). I guess we'll probably be eating a lot of Ramen noodles and putting a few extra blankets on the bed.

Averett

Congratulations on being debt free!! I'm slowly working on that myself. It's a rough road.

Hopefully your wife can find a new job soon, it's crappy that you're out of debt only to be delt the out of job card

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gar1976

Being out from under that debt will help you in the lean months, but try not to rack so much up again!

Good luck on the job search. What does she do?

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Ella

Congrats, mate. I'll be that way in a couple of weeks. I've spent up thousands of dollars on my credit card getting my house ready for sale, and now it's sold and settling in a couple of weeks, I will be able to pay off my debt and have over 100k left for investment and a new car. Yippee!

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spindles

Congrats on clearing the debt.

I have lived by the principle of my parents - if you don't have the money, don't buy it (apart from obvious larger purchases like cars and houses). I have a debit visa card (works where visa does, but takes money out of my bank account - no credit) and an Amex (on which you have to pay the balance each month). It makes you think carefully about your purchases.

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hokieian

Yeah - within the last few years I have started using my check card (Visa) for 95% of my purchases. I then enter every single receipt into an excel spreadsheet and track my expenditures that way so that I can see where all the money goes each month. It can sure tell you a lot about your priorities and lifestyle if you keep track of where you are spending your money and what percentage of your total income gets spent on entertainment, food, etc.

Plus it tells you exactly where you can afford to cut back and what you can do without.

crossova

i owe about 2000.00, is there any advice to paying it down. some months i just put a big chunk of my paycheck and just live off the bare necessities till next pay period.

i even tried just paying the minimum so i can save up for next month.

Rummey

Congrats on paying off your debt!

I have never had debt and do not have a credit card. However, I imagine I will some day. Do you have any lessons that you specifically learned about how to stay out of the cycle of debt? The answer seems obvious, but I imagine a lot of people hear the good advice, and try to live by it, but still end up finding themselves in debt.

Mike

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hokieian

The best advice is to stick with it and pay as much as you can possibly spare each month. ALWAYS pay more than the minimum payment, and keep an eye on your interest rate.

If you have an interest rate above 10%, that is too high. Call your credit card company and tell them you will transfer your balance if they don't give you a lower rate. If they don't give in, shop around for a card that gives a low introductory rate and/or a low rate on balance transfers.

When we first got married, I transferred all our cards onto one card that offered 3% interest on all balance transfers for a year, with the plan that the card would be paid off within a year.

I've never figured out just how much I saved doing that, but I guarantee it was more than just pocket change.

hokieian

I think that like a lot of things, nobody ever really learns the lesson of credit cards until they have been in trouble with them.

The way to stay out of trouble is to never use them. Of course, this isn't really realistic since unforseen emergencies, trips, etc. always come up. I think the trick is to only use your credit cards in these special cases. Don't use them as a substitute for cash becasue this is when you get in trouble.

You use them one day to go out with friends, swearing it is a one time thing and you won't use it any more, but three days later you forgot that you used it a couple days ago and charge your groceries on it. By the time you bill arrives, it looks hopeless. Then you get the attitude that since you are so far in debt already, you might as well charge another meal to your credit card, because another $30 isn't really going to matter anyway. And the evil downward spiral continues.

Bottom line: use your cards only in emergency situations, and NEVER treat your credit card as a substitute for cash.

And pay off your bill every month.

crossova

thx hokieian

nospam

congrats on paying off the debt.

i think that finance education needs to be taught in high school before kids go off to college and start getting credit cards. it's so easy to get trapped in the credit card cycle. glad you got out.

hokieian

It's not easy getting out, but once you set your mind to it and are really willing to sacrifice in order to do it, it becomes more of a goal than a burden.

braisler

Congrats on getting out of debt.

Here, here! I think that simple financial education is one of the most sorely lacking aspects of high school. I was lucky (?) in that I grew up in a family without a lot of money. I learned how to get by on very little and how to manage money very well. Many of my contemporaries have minor to serious problems with debt.

The best rule to avoid debt is not to avoid the "evil" credit card, but rather to avoid the stupid pattern of thinking that you need every little thing. You don't need a new car, you don't need an Xbox/Plasma TV/etc., or to go out to dinner or the bar three times a week. Just live your life humbly and always within your means. I think that people are often caught up in the idea that they deserve to live well above the level their current income would support.

toverfie

ok...so I have a wells fargo credit card at prime plus 9% with no annual fee, my balance is zero and my fico is about 630-640...does anyone think I qualify for a better rate? or should I be keeping my mouth shut and be happy with what I have? I don't want to make any threats if I won't be able to get a better deal anywhere else....and I don't want a bunch of turn down inquiries in case I really need to get more credit in the near future. I also will not agree to have a credit card tied into my mortgage.

Hey guys, let me know what you think

Cheers

Agang579

I too fell into the "another $30 isn't going to matter" trap. I'm at 15K as a result. EVERY charge matters! Every nonessitial dime is going into paying this off (not down), right now 500.00 a month. My interest is 11%. Would I be wise to transfer my balence to a low introductory rate card while i'm paying it off? Would it make that much difference? I'm not that good with math. Wish me luck! Thanks, Rick

avsdude

Some quick math tells me at $500 a month you could pay it off in 36 months. If you were to move it to a card with a 3.5% rate for the first 12 months and then back to 11% for the remainder you could pay it off in about 33 1/2 month saving you about $1200.

bendsley

I've actually started paying for everything on my credit cards and paying most of the balance off each month. I always have the money incase I need to pay more on the credit card.

Anyway, I do this to increase my credit score, which over the past two years, it has gone up dramatically. I'm easily sitting at a 820+ FICO score (last time I made an inquiry).

Credit Cards can help if you can control them.

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Agang579

Wow! That would deffinately make it worhwhile. Thanks alot, avsdude!

onewolf

Agang579 - do you own a home that you plan on living in for at least 5 more years? If so, refinance and pay off your credit cards!! Seriously - huge savings. In addition to 5% interest instead of double digits, the interest is tax deductible. No brainer.

Agang579

Thanks onewolf, I'm looking into that.

merkerguitars

Congrats, you do what alot of people dont' ever do. Speaking of which, it's sad to see some of my friends get into debt even when I fully explain it all to them.

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Blackthorn

Revolving debt is too readily available. It's even more crazy the way that it's peddled to college stundents. I know it's often easier said than done but if you don't have the cash to pay for it then don't run up the credit card debt. Emegency situations arise when the credit card can come in handy but....for normal purchases credit cards and the interest on revolving debt are more trouble than they are benefit.

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jujueye

hokieian - great news. Congratulations. Just make damn sure you don't start leaning on the cards now that your wife is looking for work. This is a critical time. Be very careful.
I kind of like my debit card. It works pretty much anywhere, and I can track it every month when I balance the checkbook. The other neat thing about debit cards is you can't spend more than what is in your account. What could be better?

EULA

My great credit card lesson: $5 purchases add up like a bitch on Christmas.

Nunquam_Idem

For the really big balances of debt, either transferring to low rates (0-6%) is good. I am about 15K in the hole through a lot of different cards (just bought a house, remodeled, new appliances, etc) and a debt consolidation company will be helping us out. They contact the creditors, effectively close the accounts (from further purchases) and put you on a plan to pay it all off within 50 months or so. They really do get better rates (our 21% Chase and Discover are going down to 10%, and 6% AmEx is going down to 0%). They charge for their service, but it will be worth it.

I just wish I wasn't in the hole. Congrats to those who are out of debt, in a couple years, I hope to make the same announcement!

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shesus

You just told my life story of debt. The people that say they owe $2,000 make me very jealous. I don't know how much I owe and I don't even want to know right now. I know that my minimums are over $100 on a couple cards and that can't be good. I got my first card at 18 (2 of them actually). Then the store cards (bad idea), I am a recovering shopaholic. My mom bailed me out once when I was 19. Since then I have been on my own with my debt. I didn't learn my lesson. After 10 years of cards, 5 moves, and job losses, I am in too deep. I have bounced balances around to get lower interest, but it seems helpless.

Anyway, do banks give you loans without a house for equity? I figured if I can get them all on one bill I may be better off. Curious minds are asking...I think that between my husband and I, we have 5 or 6. We haven't used them in a while, but the balance never goes down.

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Nunquam_Idem

I asked my bank (US Bank) if they could give me a debt consolidation loan, and we have a house, but she said no because we didn't have enough equity built up (we've had it 3 months). But they have a nice credit card that would give me 0% for 6 months! Wohoo!

I checked online, and there are some companies that can help. I *just* got signed up with these people, but I would already recommend them because they can do things that we as consumers can't.

It's like a last ditch effort before getting to the point of having to declare bankruptcy, and so creditors are willing to work with you to make sure they at least get the money you spent back, and less interest.

They get 21% rates down to 10%, 7% rates stay the same, my 6% AmEx down to 0%. I called Discover, 21%, and they only got me down to 17% on my own.

The debt consolidators want a fee up front, but the guy I talked to allowed me to sign up a couple small accounts the first month then add the big ones next month to keep the fee much smaller. ($189 instead of $350) They also want a monthly fee for the service. All told, the fees are smaller than the #@(%$*^ interest that the credit cards charge.

The guy I talked to that I really liked is here:

Jonathan Saracco
Consumer Debt Solutions, Inc.
http://www.consumerdebtsolutions.net
1.866.231.5668 ext. 214

Best of luck...

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