Digging Out of Debt

Kalista · 02-09-2008, 07:11 PM

THE SECRET to paying off credit-card debt is really very simple: All you need to do is earn more than you spend, and apply the savings toward paying down your debt.

So then what makes tackling credit-card debt so hard? Sadly, many seem to be losing the battle of the credit-card balance. Consider that 61% of all credit-card holders carry a balance, according to CardWeb, an industry tracker. And among families that have at least one credit card, the average balance is a staggering $9,659. Ten years ago it was $5,875.

"People are out of control," says Howard Strong, a consumer attorney and author of "What Every Credit-Card User Needs to Know." "They're out buying love at the malls." And they aren't succeeding. According to a survey of 1,500 consumers by Consolidated Credit Counseling Services, a whopping 71% said debt is making their home life unhappy.

Part of the problem is that the credit-card companies have made it easier than ever to carry a balance. "People are addicted to minimum-payment crack," says Steve Rhode, co-founder of Myvesta, a debt-counseling service. (Click here for other costly credit-card tricks.) But many fiscally responsible people can also find themselves woefully in debt after some sort of personal crisis, such as a divorce, illness or the loss of a job.

So what are the warning signs that your credit-card debt has changed from nuisance to crisis? For starters, if you think that you might be having a problem, then you probably are, says Rhode. Generally speaking, your debt-to-income ratio (not including mortgage payments) shouldn't exceed 20%, which means that you shouldn't be devoting more than 20% of your net monthly income to paying off credit cards and other nonmortgage debt. Other signs of trouble, according to Gerri Detweiler, author of "Slash Your Debt," include:

· Only being able to make the minimum payments on your debt.
· Maxing out several or all of your credit cards.
· Frequently charging items with the intention of paying them off at the end of the month, but then finding that you're financially unable to do so.
· Using credit cards for everyday purchases like groceries.
· Using credit cards to pay for things you know you can't afford.
· Worrying that people close to you will find out just how deep in debt you really are.

If the creditors are calling or if your credit report is already suffering due to late payments or bills that you've been unable to pay at all, then you probably should consider visiting a credit counselor. But if your credit rating remains intact and you're feeling disciplined, you should be able to dig yourself out of this hole on your own. Here's some advice:
Get a Grip

The first thing you need to do is figure out just where you stand financially. This means knowing how much you owe (and how much you're paying for it) as well as how much you've saved. In other words, you need to know both your net worth and your cash flow. Ultimately, you're going to have to come up with the ever-dreaded budget, so you can know just how much you have to spend and how much you can use to pay down your debt each month. Based on your answers, our calculator will give you a reasonable estimate of when you can kiss that debt goodbye — and how much it will cost you before you do.

GarnetTigerMom · 02-09-2008, 07:19 PM

Trust me,, Credit cards are "monsters"! I used to have credit cards and finally paid off the debt. I stop using credit cards for long time. It be less stressful to use credit cards. :- )

Kalista · 02-09-2008, 07:23 PM

Quote:

Originally Posted by GarnetTigerMom

Trust me,, Credit cards are "monsters"! I used to have credit cards and finally paid off the debt. I stop using credit cards for long time. It be less stressful to use credit cards. :- )

yes I am trying to work on my credit card to pay off before the summer !!Then focus on car payment and student loan.

GarnetTigerMom · 02-09-2008, 07:34 PM

Quote:

Originally Posted by Kalista

yes I am trying to work on my credit card to pay off before the summer !!Then focus on car payment and student loan.

Ah I been there before down that road, I know how hard it is to pay off car payment and the student loans. I just glad I had it paid off, whew! But I have been thinking of going back to college again for a different major. I already have my arts degree, and cerft. for CPR, Photograhy. Now I want to get my business degree to I can open my own business one day. It feels like college is my second home. But college give you the power of knowledge to a higher education is always worth it.

Kalista · 02-09-2008, 07:39 PM

Quote:

Originally Posted by GarnetTigerMom

Ah I been there before down that road, I know how hard it is to pay off car payment and the student loans. I just glad I had it paid off, whew! But I have been thinking of going back to college again for a different major. I already have my arts degree, and cerft. for CPR, Photograhy. Now I want to get my business degree to I can open my own business one day. It feels like college is my second home. But college give you the power of knowledge to a higher education is always worth it.

Yes, that is true. Did you try to apply Apollo Loan, they will review your income then they will help you to pay some on the student loan. My son did this, it apparently helps us to pay some on student loan.

Apollo College Graduate Private Student Loan

Apollo Group Inc.'s University of Phoenix Student Loan Default Rate 4.1 Percent. - Free Online Library

GarnetTigerMom · 02-09-2008, 11:54 PM

Quote:

Originally Posted by Kalista

Yes, that is true. Did you try to apply Apollo Loan, they will review your income then they will help you to pay some on the student loan. My son did this, it apparently helps us to pay some on student loan.

Apollo College Graduate Private Student Loan

Apollo Group Inc.'s University of Phoenix Student Loan Default Rate 4.1 Percent. - Free Online Library

I don't think have heard of Apllo loan but I can found if they do that here in my state of Virginia. Thanks for telling me about it. :-)

Kalista · 02-10-2008, 07:31 AM

Quote:

Originally Posted by GarnetTigerMom

I don't think have heard of Apllo loan but I can found if they do that here in my state of Virginia. Thanks for telling me about it. :-)

Welcome

It won't hurt to try it. Never know, you may have an eligible to get fund from Apollo student loan to review your income. It is very helpful for my son.

Kalista · 02-10-2008, 07:38 AM

I will try to apply this one to see if it is worth to pay off all my debts consolidation. So that way, I can pay one bill instead of 8 bills to save more interest percent.

Debt Relief â€“ Debt Help â€“ Debt Settlement - Avoid Bankruptcy â€“ Debt â€“ Credit Card Debt - Freedom Debt Relief

PghSteelersGirl · 02-11-2008, 02:50 AM

Yeah I no longer have them too. It has been yrs. I use my bank card or pay pal card that is it. That is my only plastics I have. But my hub has 3. 2 are old ones trying to pay it off but the other one is new just got it which I am a bit peeved about.

Banjo · 02-11-2008, 02:53 AM

I use credit cards all of the time and always pay them on time. Having a credit card help build up your credit history.

Kalista · 02-11-2008, 05:39 AM

Quote:

Originally Posted by Banjo

I use credit cards all of the time and always pay them on time. Having a credit card help build up your credit history.

yes, you are correct. I learned that if you closed your credit cards account, it will effect credit score rate decrease. Therefore; I have to keep all my credit cards open account to re-build credit score rate increase.

Right now, I become overwhelm with debts due to student and car loans. I am working on firm budget from now on.

Liebling:-))) · 02-11-2008, 06:59 AM

Quote:

Originally Posted by Banjo

I use credit cards all of the time and always pay them on time. Having a credit card help build up your credit history.

Ditto

I own credit card. I pay at once after the whole month spending instead of monthly payment with increase interest.

Secretblend · 02-11-2008, 07:34 AM

Quote:

Originally Posted by Kalista

yes, you are correct. I learned that if you closed your credit cards account, it will effect credit score rate decrease. Therefore; I have to keep all my credit cards open account to re-build credit score rate increase.

Right now, I become overwhelm with debts due to student and car loans. I am working on firm budget from now on.

I don't know how many you have. While it's true that closing accounts can lower your score., having too many open accounts with no balance on it can also lower your score.

GarnetTigerMom · 02-11-2008, 10:12 AM

one credit card is better than having like 3 or 5 credit cards it too much trouble. I have seen people have more than one credit cards and spin out of control when they can't if off. I am sure it nerve recking.

Banjo · 02-11-2008, 11:38 AM

Quote:

Originally Posted by Secretblend

I don't know how many you have. While it's true that closing accounts can lower your score., having too many open accounts with no balance on it can also lower your score.

That is true.

Deaf Mortgage · 03-04-2008, 04:14 PM

Check out the website

Rich Dad - Welcome to Rich Dad!

or

Real Debt Help - Get out of debt with Dave Ramsey's Total Money Makeover Plan.

Both are wonder speaker to teach you how to get out of debts or the "rat race".

It's just a tip.

AlleyCat · 03-04-2008, 05:36 PM

Quote:

Originally Posted by Secretblend

I don't know how many you have. While it's true that closing accounts can lower your score, having too many open accounts with no balance on it can also lower your score.

If your account is closed due to lack of payment or other reasons BY the lender, then it DOES affect your score. But if you, as the consumer, close it voluntarily while your account is still in good standing and at a zero balance, it DOES NOT negatively affect your credit score. This is what I've been told by my lenders.

Deaf Mortgage · 03-04-2008, 08:06 PM

Quote:

Originally Posted by AlleyCat

If your account is closed due to lack of payment or other reasons BY the lender, then it DOES affect your score. But if you, as the consumer, close it voluntarily while your account is still in good standing and at a zero balance, it DOES NOT negatively affect your credit score. This is what I've been told by my lenders.

I second this statement!

Secretblend · 03-04-2008, 08:53 PM

Quote:

Originally Posted by Deaf Mortgage

I second this statement!

Okay, I learned something new.

02-09-2008, 07:11 PM	#1 (permalink)
Kalista Premium Member Join Date: May 2003 Posts: 7,349	Digging Out of Debt THE SECRET to paying off credit-card debt is really very simple: All you need to do is earn more than you spend, and apply the savings toward paying down your debt. So then what makes tackling credit-card debt so hard? Sadly, many seem to be losing the battle of the credit-card balance. Consider that 61% of all credit-card holders carry a balance, according to CardWeb, an industry tracker. And among families that have at least one credit card, the average balance is a staggering $9,659. Ten years ago it was $5,875. "People are out of control," says Howard Strong, a consumer attorney and author of "What Every Credit-Card User Needs to Know." "They're out buying love at the malls." And they aren't succeeding. According to a survey of 1,500 consumers by Consolidated Credit Counseling Services, a whopping 71% said debt is making their home life unhappy. Part of the problem is that the credit-card companies have made it easier than ever to carry a balance. "People are addicted to minimum-payment crack," says Steve Rhode, co-founder of Myvesta, a debt-counseling service. (Click here for other costly credit-card tricks.) But many fiscally responsible people can also find themselves woefully in debt after some sort of personal crisis, such as a divorce, illness or the loss of a job. So what are the warning signs that your credit-card debt has changed from nuisance to crisis? For starters, if you think that you might be having a problem, then you probably are, says Rhode. Generally speaking, your debt-to-income ratio (not including mortgage payments) shouldn't exceed 20%, which means that you shouldn't be devoting more than 20% of your net monthly income to paying off credit cards and other nonmortgage debt. Other signs of trouble, according to Gerri Detweiler, author of "Slash Your Debt," include: · Only being able to make the minimum payments on your debt. · Maxing out several or all of your credit cards. · Frequently charging items with the intention of paying them off at the end of the month, but then finding that you're financially unable to do so. · Using credit cards for everyday purchases like groceries. · Using credit cards to pay for things you know you can't afford. · Worrying that people close to you will find out just how deep in debt you really are. If the creditors are calling or if your credit report is already suffering due to late payments or bills that you've been unable to pay at all, then you probably should consider visiting a credit counselor. But if your credit rating remains intact and you're feeling disciplined, you should be able to dig yourself out of this hole on your own. Here's some advice: Get a Grip The first thing you need to do is figure out just where you stand financially. This means knowing how much you owe (and how much you're paying for it) as well as how much you've saved. In other words, you need to know both your net worth and your cash flow. Ultimately, you're going to have to come up with the ever-dreaded budget, so you can know just how much you have to spend and how much you can use to pay down your debt each month. Based on your answers, our calculator will give you a reasonable estimate of when you can kiss that debt goodbye — and how much it will cost you before you do. __________________ Enjoy the summer as much as we can. The times will fly !

02-09-2008, 07:19 PM	#2 (permalink)
GarnetTigerMom Registered User Join Date: Aug 2007 Location: Virginia Posts: 4,590	Trust me,, Credit cards are "monsters"! I used to have credit cards and finally paid off the debt. I stop using credit cards for long time. It be less stressful to use credit cards. :- ) __________________ GarnetTigerMom "The rain may be falling hard outside, But your smile makes it all alright. I'm so glad that you're my friend. I know our friendship will never end." -- Robert Alan

02-10-2008, 07:38 AM	#8 (permalink)
Kalista Premium Member Join Date: May 2003 Posts: 7,349	I will try to apply this one to see if it is worth to pay off all my debts consolidation. So that way, I can pay one bill instead of 8 bills to save more interest percent. Debt Relief â€“ Debt Help â€“ Debt Settlement - Avoid Bankruptcy â€“ Debt â€“ Credit Card Debt - Freedom Debt Relief __________________ Enjoy the summer as much as we can. The times will fly !

02-11-2008, 10:12 AM	#14 (permalink)
GarnetTigerMom Registered User Join Date: Aug 2007 Location: Virginia Posts: 4,590	one credit card is better than having like 3 or 5 credit cards it too much trouble. I have seen people have more than one credit cards and spin out of control when they can't if off. I am sure it nerve recking. __________________ GarnetTigerMom "The rain may be falling hard outside, But your smile makes it all alright. I'm so glad that you're my friend. I know our friendship will never end." -- Robert Alan

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02-11-2008, 02:50 AM	#9 (permalink)
PghSteelersGirl HOMESICK FOR PGH PA!! Join Date: Feb 2008 Location: Weirton Wva, soon to be back in Pgh Pa. Posts: 35	Yeah I no longer have them too. It has been yrs. I use my bank card or pay pal card that is it. That is my only plastics I have. But my hub has 3. 2 are old ones trying to pay it off but the other one is new just got it which I am a bit peeved about.

02-11-2008, 02:53 AM	#10 (permalink)
Banjo Mr. Movie Guy Join Date: Mar 2003 Location: Ontario, Canada Posts: 4,871 Blog Entries: 1	I use credit cards all of the time and always pay them on time. Having a credit card help build up your credit history.

03-04-2008, 04:14 PM	#16 (permalink)
Deaf Mortgage ASL Mortgage Banker Join Date: Jun 2007 Location: Minneapolis, MN Posts: 597 Blog Entries: 1	Check out the website Rich Dad - Welcome to Rich Dad! or Real Debt Help - Get out of debt with Dave Ramsey's Total Money Makeover Plan. Both are wonder speaker to teach you how to get out of debts or the "rat race". It's just a tip.