How to Avoid Debt from Credit Cards
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Posted: Mon Jan 10, 2005 3:36 pm
Post subject: How to Avoid Debt from Credit Cards
Angel
Date: 9/19/2000 3:04 pm CDT
My husband is in the military..God knows, we have tried and failed miserably to get out of credit card debt. Right now, we have three credit cards (2 visa's and one mc) and other department store cards total, up to about 25,000. I am not including car or house payments. He makes about 42,000 a year. I have become ill and unable to work. Where do we begin, to get out of debt? We have heard so many things, we are paying the bills, but, I am thinking about tomorrow, please offer me a soultion. So far, we have beautiful credit. Thank you Angel...
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
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Posted: Mon Jan 10, 2005 3:36 pm
Post subject: How to Avoid Debt from Credit Cards
Ira Stoller
Date: 9/19/2000 4:55 pm CDT
Angel, you are in GREAT shape compared to many others. I was there too, except that I ran up credit card debt to the tune of about $40,000.00 and I was making under $30,000/year at the time, and was unemployed for several months also. This was nine years ago. We had a little ceremony at home this past July when I made my final payment and became debt free. How did I do it? It took a lot of learning about how credit works and a lot of dedication to paying off debt and a bit of going without.
Step 1: determine what the finance charges are on your current cards. If they are the normal double digit rates, you may never get out of debt unless you change that. You have two choices, and I would use them both. First, call each credit card company and tell them that you have been bombarded with low interest rate offers, but you are a loyal customer and before you cancelled their card you wanted to know what they could do for you. Chances are they will give you a temporary "promotional rate" which will be far lower than you are currently paying. This will save you a bundle in finance charges alone.
Second, check this site for low interest credit cards and/or promotional rates. If your banks have lowered your rates to your satisfaction, simply keep the information on file. When your promotional rates are about to expire, apply for a few promotional rate cards and simply transfer your balances to the new cards. As an example of how low you can go, American Express Optima Card at one time offered a nine month promo rate of ZERO INTEREST!!
If you must continue to use credit cards for purchases, I would also obtain one of several that give you a cash rebate - usually 1% - for all of your purchases. Often these are gas & oil cards which also give you a 4% or 5% rebate on all of your gas & oil purchases; still another way to save $$$.
If you are home owners, you might also check into taking out a home equity loan to pay off your credit card debt. The advantage here is that interest on home equity loans is tax deductable, whereas credit card interest is not deductable.
Oh, and the final bit of advise is to pay off as much debt as you can each month. I had an iron clad rule that I would pay at least $100.00 or three times the minimum payment, whichever was larger, to each card.
Well, that's probably a lot more than you bargained for, but it's a good start for you guys. Let us know if you need any more hints.
archive
Posted: Mon Jan 10, 2005 3:37 pm
Post subject: How to Avoid Debt from Credit Cards
Tim
Date: 9/19/2000 11:18 pm CDT
Become your own debt consolidator. Read my post listed a few lines below. Since you have good credit keep one card and destroy the rest.
I know it seems like common sense but if you were not nurtured to manage debt before it gets out of hand then you must rely on faith. Faith that you can contol your family's spending habits and the temptation of more credit to pay off current debt.
There is no quick fix. A second or third mortgage will probally be passed on to your kids. Only hard work and budgeting will get you over the hump.Take on a part-time job or pick up over overtime.Make a commitment for one year straight then see if your situation changes.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Posted: Mon Jan 10, 2005 3:36 pm
Post subject: How to Avoid Debt from Credit Cards
Angel
Date: 9/19/2000 3:04 pm CDT
My husband is in the military..God knows, we have tried and failed miserably to get out of credit card debt. Right now, we have three credit cards (2 visa's and one mc) and other department store cards total, up to about 25,000. I am not including car or house payments. He makes about 42,000 a year. I have become ill and unable to work. Where do we begin, to get out of debt? We have heard so many things, we are paying the bills, but, I am thinking about tomorrow, please offer me a soultion. So far, we have beautiful credit. Thank you Angel...
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
archive
Posted: Mon Jan 10, 2005 3:36 pm
Post subject: How to Avoid Debt from Credit Cards
Ira Stoller
Date: 9/19/2000 4:55 pm CDT
Angel, you are in GREAT shape compared to many others. I was there too, except that I ran up credit card debt to the tune of about $40,000.00 and I was making under $30,000/year at the time, and was unemployed for several months also. This was nine years ago. We had a little ceremony at home this past July when I made my final payment and became debt free. How did I do it? It took a lot of learning about how credit works and a lot of dedication to paying off debt and a bit of going without.
Step 1: determine what the finance charges are on your current cards. If they are the normal double digit rates, you may never get out of debt unless you change that. You have two choices, and I would use them both. First, call each credit card company and tell them that you have been bombarded with low interest rate offers, but you are a loyal customer and before you cancelled their card you wanted to know what they could do for you. Chances are they will give you a temporary "promotional rate" which will be far lower than you are currently paying. This will save you a bundle in finance charges alone.
Second, check this site for low interest credit cards and/or promotional rates. If your banks have lowered your rates to your satisfaction, simply keep the information on file. When your promotional rates are about to expire, apply for a few promotional rate cards and simply transfer your balances to the new cards. As an example of how low you can go, American Express Optima Card at one time offered a nine month promo rate of ZERO INTEREST!!
If you must continue to use credit cards for purchases, I would also obtain one of several that give you a cash rebate - usually 1% - for all of your purchases. Often these are gas & oil cards which also give you a 4% or 5% rebate on all of your gas & oil purchases; still another way to save $$$.
If you are home owners, you might also check into taking out a home equity loan to pay off your credit card debt. The advantage here is that interest on home equity loans is tax deductable, whereas credit card interest is not deductable.
Oh, and the final bit of advise is to pay off as much debt as you can each month. I had an iron clad rule that I would pay at least $100.00 or three times the minimum payment, whichever was larger, to each card.
Well, that's probably a lot more than you bargained for, but it's a good start for you guys. Let us know if you need any more hints.
archive
Posted: Mon Jan 10, 2005 3:37 pm
Post subject: How to Avoid Debt from Credit Cards
Tim
Date: 9/19/2000 11:18 pm CDT
Become your own debt consolidator. Read my post listed a few lines below. Since you have good credit keep one card and destroy the rest.
I know it seems like common sense but if you were not nurtured to manage debt before it gets out of hand then you must rely on faith. Faith that you can contol your family's spending habits and the temptation of more credit to pay off current debt.
There is no quick fix. A second or third mortgage will probally be passed on to your kids. Only hard work and budgeting will get you over the hump.Take on a part-time job or pick up over overtime.Make a commitment for one year straight then see if your situation changes.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
posted by CardRatings.com at 1:22 PM
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