Managing Credit Card Debt
- allancoleman
- SteveT
- llldk2
- Kirk
- SteveT
- llldk2
- Kirk
- llldk2
- SteveT
- hickfish
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» allancoleman - Re: What is the best way to get rid of Credit Card Debt
In response to Re: Re: What is the best way to get rid of Credit Card Debt posted by llldk2:hello 11dk2 ,
Kirk is right . if you don't change your LIFESTYLE and quit using your credit cards for everyday living expenses , you'll never get ahead . much less send kids to college or build up enough critical mass to retire later .
as Dave Ramsey says , " Live like no one else now ( save , pay off and get rid of credit cards ) , " so you can live like no one else later " ( debt free , including your home mortgage ). and as Dave also says , " Until you get sick and tired of being sick and tired ( in debt ) , you're not likely to do much about it " . there aren't really many secrets to getting out of debt other than quit getting into debt .
in the end , we're all either " net savers " ( ants ) or " net spenders " ( grasshoppers ) . in my opinion anyway .
-- posted by allancoleman
» SteveT - Re: What is the best way to get rid of Credit Card Debt
In response to What is the best way to get rid of Credit Card Debt posted by llldk2:
Hi llldk2, Kirk and Allan have given you some good things to consider. I’ll add my two cents worth. I think you may benefit from listening to Dave Ramsey’s radio show.
http://www.daveramsey.com/
One thing to watch, read the terms on your current credit cards. Some cards consider you in default if you even apply for another credit card (like a balance transfer) and immediately increase your interest rate! Guess they want one last dip into your wallet? Balance transfers are worth looking at, maybe you can get 6 or more months of low or even no finance charges. That would really allow you to concentrate on getting that old principal down, maybe even eliminated.
If a balance transfer don’t work and you have more than one credit card set priorities, start by looking at the largest balance and highest interest rate you pay. Maybe pay smaller or minimums on the others and whittle down the high rate - large balances first. This will really make you feel like your plan is making progress and the sacrifices are worth it.
After you get out of debt then continue by living a similar life style and instead of paying off debt pay yourself by saving and investing. I would think a year from now things will be looking much better.
-- posted by SteveT
» llldk2 - Re: Re: What is the best way to get rid of Credit Card Debt
In response to Re: What is the best way to get rid of Credit Card Debt posted by allancoleman:I appreciate your comments about budgeting. We always lived on a budget and we still have a budget and have kept the day to day spending the same. The problem came in when we added our third child who was very premature and ended up with major medical bills. His subsequent hospitalizations really hit us hard.
Add to that, a 4000.00 cut in pay for two years in a row from my husbands employer. I have really struggled to keep us afloat. I have gone to thrift stores for just about all our clothes and other things. I have started to sell things on ebay etc. I just cant seem to make up the difference. I wonder if it would just be better to try to bring more in to cover the hole in the budget. I. E. my husband looking for a better paying position in the private sector.
Just thinking out loud,
llldk2
-- posted by llldk2
» Kirk - Re: Re: Re: What is the best way to get rid of Credit Card Debt
.In response to Re: Re: What is the best way to get rid of Credit Card Debt posted by llldk2:
I hope your son is healty now and you find it a minor annoyance to pay off the debt compared to the joy he brings you.
I don't want to sound preachy, but having more children than you budgeted for is no different in lifestyle budgeting than having a fancy sports car that ends up in the shop once a month to be running well.
"Stuff" happens and part of life and financial planning is to prepare as best as possible for when it hits the fan, such as your case.
I betcha you would still take a son over that fancy sports car so perhaps look to finance his birth much like buying a new car? 
Take out a home equity loan that you VOW to pay off in 5 years and use it to pay off the credit cards. It sounds like you are already a good budgeter so I'd not have a problem with that choice, now that you've supplied more details.
Also, your husband would not be the first or last to work two jobs or you could work nights when he stays home with the kids. People do it all the time, especially here in the Silicon Valley where it takes one income just to cover food and housing for many families. Working the 5 to 9PM shift at a fast food place might make up the debt quicker. My sister-in-law tends bar and assistant manages restaurants in the Monterey area two nights a week to help them lead the lifestyle they enjoy.
You could even do a coop with another mother who needs more income. My mother did that when I was born... she split her salary with the woman who took care of me until my next brother came along and my father got a better job.
-- posted by Kirk
» SteveT - Re: Re: Re: What is the best way to get rid of Credit Card Debt
In response to Re: Re: What is the best way to get rid of Credit Card Debt posted by llldk2:
No sense wasting time on what has happened, that can’t be changed. What is important is the future. I think a second job is definitely worth exploring. Dave Ramsey often mentions delivering pizza evenings. The tips would be tax-free income.
Consider the trade offs of what is a realistic monthly income vs. the time away from the kids. I’d go for it. I may not enjoy it but would consider it a temporary situation. I applauded you and your husband for doing the responsible thing and addressing this problem instead of filing bankruptcy. The biggest value from the whole ordeal will be you will instill good values into your children.
-- posted by SteveT
» llldk2 - Re: Re: Re: Re: What is the best way to get rid of Credit Card D
In response to Re: Re: Re: What is the best way to get rid of Credit Card Debt posted by Kirk:Very good ideas. Yes our son is doing much better and I dont forsee any thing major. I do think you are right about our failure to realize that our new child would mess up our existing budget.
I did check with our bank and they said a equity loan would be 5.24% for 4 years. How does that sound?
I think I need to find a way to bring in more money definitly. If anything but to plug up the 4000.00 per year hole created by the pay cut.
llldk2
-- posted by llldk2
» Kirk - Re: Re: Re: Re: Re: What is the best way to get rid of Credit Ca
In response to Re: Re: Re: Re: What is the best way to get rid of Credit Card D posted by llldk2:That sounds like a fair loan. I assume they are quoting APR which includes any fees to originate the loan. I'd look at 5.24% as a very cheap price to pay for a healthy kid and you used the credit cards well for what they are intended... emergencies. Now that the dust has settled, you are being responsible and looking to pay them off. Congratulations on doing the right thing.
Some people take in a boarder to get by the rough spots. Not sure where you live, but $400 a month for a room might do wonders.
-- posted by Kirk
» llldk2 - Re: Re: Re: Re: Re: Re: What is the best way to get rid of Credi
In response to Re: Re: Re: Re: Re: What is the best way to get rid of Credit Ca posted by Kirk:Thanks Everyone,
I just balance transferred 5000.00 of the debt to a 0% card for the life of the debt. Found out all the hoops we have to jump through to keep the rate. The other 4000.00 maybe could go to the equity loan.
As far as the boarding idea, a good one too. We dont have room. Wish I did though. I dont know about the pizza idea. I think we would eat pizza way too often!
I do clean houses so maybe I could add one more to the schedule.
You guys are great! Thanks,
llldk2
-- posted by llldk2
» SteveT - Re: Re: Re: Re: Re: Re: Re: What is the best way to get rid of C
In response to Re: Re: Re: Re: Re: Re: What is the best way to get rid of Credi posted by llldk2:
Here is another option, one of the consumer credit counseling services. Some are non-profit but that doesn’t necessarily mean they aren’t first trying to extract a fee from you. My "consultant" in that area tells me those affiliated with the National Foundation for Credit Counseling are a good place to start. Via one of them you might get more detailed and specific advice to your own circumstances and not have it for the entire world to see.
-- posted by SteveT
» hickfish - Re: Re: Re: Re: Re: Re: Re: What is the best way to get rid of C
In response to Re: Re: Re: Re: Re: Re: What is the best way to get rid of Credi posted by llldk2:111dk2: Hope everything works out for you and your family. Please plan on hanging around here. The people that have responded today are very bright folks, very willing to share their vast knowledge. It will be very rewarding for you long term to follow their advice.
-- posted by hickfish
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