Anyone Dealing With Credit Card Debt, Our Solution

[K8-EEE]

OK first off, there is a risk to this (losing your house) but this how we dug ourselves out of credit card debt last year.

Last year we had a long layoff and then an expected job fell through (was outsourced actually) and between paying the kids tuition & the groceries & stuff on the credit card, we ended up $9,000 in debt when the work finally came through in January. The tuition is $3,500 a semester so it really wasn't hard to get there!

So, we got a equity line of credit on our house -- the interest is a bit higher now but we qualified for 4%. If you use Lending Tree through Costco you get a $100 Costco gift card when your loan closes. But the best thing is if you JOIN A CREDIT UNION and do it through them.

That way the evildoers aren't benefiting by your debt...debt sucks enough anyway!!

Because the interest was so low we were able to pay agressively and get out of the hole.

Again, in our situation he was contracted for a year so there wasn't a risk of defaulting on the payments. If you default they will foreclose on you. If you don't run a risk of defaulting though this might work for you too.

The major thing is to look where you are parking your money & who is benefitting from any debt you have. Credit Unions are a great way to get around supporting ReThug banks.

[fudge stripe cookays]

1. We've done the credit card hop--

Every time we got a 0% card, we transferred all our debt onto it. Then pay and pay and pay aggressively until that rate ended.

The next 0% offer we get, we do the same thing.

When we got married 4 years ago, we had over $30,000 of debt, Now we're down around $10,000 (there have been some Canadian vacations in the meantime to pay for, or it would be lower)

FSC

[Longhorn]

8. This is a great way to get those debts paid off.

Just be sure that you don't use the card AT ALL while you're paying it off because your payments will go to the low interest rate first and meanwhile, your purchases will sit there accruing interest at the higher rate. This is one reason credit card companies are will to offer the teaser rates -- so they will make money off of the higher rates on new purchases. Also, remember that one late payment or over-limit charge and that payment rate is HISTORY!

You probably already know this, FSC, but just in case others don't. Congratulations on working your way out of debt! :toast:

[Kitka]

2. I'm paying off my $30,000 in credit card debt in 2 weeks.

I'm selling my home. There was just no other way around it. My credit is so horrible because of the mounting debt that I could not get a home equity loan and keep the house. So I'm selling the house, paying off all my debt, and then basically starting over. Yeah, it will suck to have to rent for a while while I get back on my feet, but it beats giving MBNA $500/month in interest.

[K8-EEE]

3. Hey, I Know Someone...

who sold their house and STILL had mountains of debt if that makes you feel any better! I hope your new start turns out to be a fabulous new beginning for you...

[sherilocks]

4. I was there once and it doesn't feel good

I used Consumer Credit Counseling Services and got the whole deal paid off. But I'm not so sure they can work as much magic as they used to. I've been in pretty good shape since and, despite everyone's warning to the contrary, I was able to get a mortgage when I moved.

[StrongbadTehAwesome]

5. unfortunately, this only works if you have a house :)

Hubby and I don't have too much credit card debt (somewhere around 3,000 I think), but due to putting ourselves through school we've got somewhere around $70,000 in student loans. I wonder if credit unions do federal loan consolidation...

[K8-EEE]

6. Well It Wouldn't Hurt To Ask, Huh?

They mention a consolodation loan here -- but not many details. If you belong to a credit union it wouldn't hurt to ask, who knows, depending on your interest rate it might save you some bucks.

http://www.cuna.org/newsnow/03/system081303-2.html

[NewHampshireDem]

7. Just be careful with student loan consolidations

Most consolidations don't allow for deferments, so you'll be out of luck if you decide to go back to school. Remember, you'll be paying off those student loans for YEARS, so don't rule out that possibility. Secondly, consolidation means locking in a rate, so any rate drops in the future will not apply to you. If your student loan rates are low, then that might not matter to you. Also, be sure that you consolidation loan will still allow you to deduct your interest when you file your income taxes.

[Dem2theMax]

9. Here is a great company if you need to work on getting rid of that

credit card debt. They took over CCCS (consumer credit counseling services.) Thank God. CCCS was a mess beyond belief. The new company, Money Management International, is great. Fantastic customer service. Best I have ever experienced. If they say they are going to do something, they DO it. CCCS was a nightmare.

Anyway, here is their website:

http://www.moneymanagement.org

I got rid of the credit cards. Had $27,000 in debt. Down to just about $14,000 now. I can hardly wait for it to be all paid off. In the meantime, paying cash for everything else I NEED is wonderful.
I know that every time I buy something, it's PAID for. PERIOD.


:bounce:

[Zan_of_Texas]

10. Good to see this thread and discussion.

A lot of people are too ashamed to talk about their debt, or to even add it up!

The truth is, the average American pays $1000 a year in credit card interest!

That's a lot of moolah -- think what any of us could do with $1000 to spend as we wish.

Think what we get back for that $1000 that goes in the pockets of the evil credit card companies. Zero. Ugh.

Remember, the debt didn't pile up in a minute, and won't disappear in a minute (even a home equity loan doesn't DISAPPEAR the debt -- it moves it, hopefully to a lower interest rate, but a higher risk of losing your home). Be patient. Set goals. And figure out how to get more money coming in, and less going out.

A lost job or serious health problem can set anyone back, so just figure out what to do next and save the blame for other, more deserving targets.

The US is in deep debt too, and getting deeper every minute Bush squats in the White House. So, it's an individual problem, and a national one. At least deal with the one you control!

[K8-EEE]

12. True, True....And They WANT Us In Debt!

I totally believe that the powers that be want us to spend ourselves into slavery, it will increase their control over us -- it will make us more compliant, I think that is seriously one of the motivations for these absurd credit rates.

I hate it when I see those vultures out signing up kids at the commmunity colleges for more credit than they can handle. Sometimes they charge books, not even realizing they qualify for financial aid (albeit, financial aid is covering less and less of the actual costs.)

True that home equity didn't make it go away. It still took a year even with a higher income & less interest rate than we had last year.

However, I felt better that we weren't paying riduculous rates to Repug Credit companies but a reasonable one to the credit union, which will invest it more in our interests.

[Lydia Leftcoast]

11. Here's what I learned in a debt management seminar:

1. Pay off your smallest debt completely first. Say it's $100, and you're paying $15 a month. Bite the bullet and pay off the whole $100.
2. Take the amount that you were paying on that small debt and add it to what you normally pay to your second largest debt. So you add the $15 a month to whatever you were paying on the second debt. Because of the way compound interest works, even adding a small amount will reduce your indebtedness. Say you were paying $50 a month. Start paying $65.
3. When debt #2 is paid off, start on your next largest debt. And so on and so on.

If, for example, your current combined debt payments (including house and car) are $2000 a month, you can finally pay off your house much faster if you're applying the whole $2000 to the house.

You lose the mortgage interest deduction, but according to the seminar, by keeping your house unpaid for, you're effectively paying a dollar for each couple of dozen cents you save on your taxes.

I don't own a house, but I do have some back taxes, and I'm in the process of paying off everything else in order to apply it all to those tax payments.

[Lorien]

13. I use a credit union too

but it's through Disney (they give a lot to the GOP) and their rates aren't that good. Every other bank I've tried down here gets absorbed through the ultra-GOP Suntrust. It's discouraging. :-(

[yardwork]

14. Disney isn't that bad. They also give to Democrats

and Disney is gay-friendly.

[K8-EEE]

15. Are You In Florida?

My husband works for Diz Studios here in CA -- but we bank at First Entertainment Credit Union.

The only real advantage to a huge bank like BofA is those automated tellers are everywhere. But the credit unions are all networked, so I can use the Teachers, SAG/aftra, I just needed to look for them and now I rarely pay fees. Also we have direct deposit and you can get cash back at the grocery store so I rarely use them anymore anyhow.

[Love Bug]

16. Don't forget you can also deduct the line of credit interest on your taxes

Home equity loan interest is deductible just like mortgage interest.