My wife and I went through this about five years ago.
We went to one of the debt cosolidation places. It was a non-profit and on the up and up. They negotiate new interest rates with all your credit card companies and then come up with a plan to pay them all off. You make a monthly payment to them and they pay off the actual card companies. It was an awesome feeling seeing the monthly statement and watching those balances go down. It took about two years but we got them all paid off.
Sorry I can’t remember the name of the place but if you want it PM me and I will call my wife (she will remember). Its definately worth it. It didn’t hurt our credit at all.
This thread came at just the right time. I have a lot of credit card debt and I am about to finish up college and start paying back student loans. I will have to check out that book. Thanks a lot guys!
Go to your local library and borrow Suze Orman’s “The Money Book for the Young, Fabulous & Broke.” It’s an easy read and will also give you some ideas on how to handle your finances once you get out of debt including things like retirement savings, insurance, mortgages, etc.
Also, another thing that helped me was to see exactly where all of my money was going. I am a big fan of using moneydance (http://www.moneydance.com/). With a little effort, I was able to get it to download transactions from my bank accounts and retirement accounts.
[quote]Kailash wrote:
Maybe you should look into bankruptcy. What are they going to take? Shit, as long as they don’t garnish your wages.
It might be better just to ruin your credit rating, and knock off being a slave to the credit card companies for years on end. Then in the future, buy things with cash money. Screw credit, it’s already screwed you…[/quote]
Yeah, screw personal responsibility. Let other people pay for your dumbass mistakes!
Why not go ahead and sue the credit card companies for allowing you to buy a bunch of crap that you don’t need and now have nothing to show for?
Bankruptcy should be for those who need it because of real problems. Not because some dumbass kid buys things with money he does not have. This is exactly why the laws had to be changed because too many jackasses were taking advantage.
Anyway, most of the advice here has been great. Before you buy anything just really make sure you need it and can afford it.
[quote]Kailash wrote:
Maybe you should look into bankruptcy. What are they going to take? Shit, as long as they don’t garnish your wages.
It might be better just to ruin your credit rating, and knock off being a slave to the credit card companies for years on end. Then in the future, buy things with cash money. Screw credit, it’s already screwed you…[/quote]
bankruptcy isn’t really an option anymore. It takes a lot to qualify for that with the new law changes.
Unless you absolutely must, don’t even think about bankruptcy. It might be painful, but if you make all your payments and don’t screw up, you’ll get a great credit rating, which can save you a lot of money down the road – buying a home for example.
Anyway, just to commiserate with you, when I got out of school and into my first job, there were a bunch of things I’d never been able to afford and plenty of credit card companies willing to let me do it.
Luckily, I saw what was happening reasonably quickly and learned my lesson. The only other time I had to abuse my credit was when I was unemployed for a short stint. That really chewed arse.
I’ll add my little dumbass story here. Moved out when I was 18, after a fight with my parents over a party I had when they were on vacation. Had always been very good with my finances even through college, but I found out that was because I lived at home. When I started living on my own I would put things like my groceries on my credit cards and then I would pay the balances off by the end of the month.
When I turned 21 I found a new hobbie of going out to the bars and clubs on the weekends. Well this usually ended up costing me a couple hundred a week and soon thereafter I was unable to pay off my balances monthly. I figured that this was just a phase I was going through and soon I would not want to be going to bars and clubs all the time and that I would just have to buckle down for a month or two afterwards and things would be back to normal.
Well when I turned 25, my buckle down time went from a few months to 2 years, and that included selling my house and moving back in with mom and dad. Also I make a good chunk of money now so yea, I have a big pile of debt. One good thing is that I have never once paid a minimum payment and have only paid one bill a few days late in my life. My credit is very good still and my rates are only at 11% on my 2 cards. This is good, but I will still be looking to transfer to a 0% card at least for a year.
I travel, so there are still times when I have to use a card, like to reserve a hotel room or something. But in one year of living home, I have knocked about 8k of debt off. What pisses me off now is that when I’m all done I would have been able to invest all that money instead of dumping it into things I owe on.
Anyways, Glad you getting on the right trac, remember, even if you fall off track, do not give up. Get right back on trac and get going again, this is something you need to do.
[quote]Vegita wrote:
I travel, so there are still times when I have to use a card, like to reserve a hotel room or something. But in one year of living home, I have knocked about 8k of debt off. What pisses me off now is that when I’m all done I would have been able to invest all that money instead of dumping it into things I owe on. [/quote]
Very true. When I look at my credit card payment history for the past six months, I see more than $8,000 paid so far…and that doesn’t include the near same amount paid the six months prior. That’s more than $16,000 in about a year that I could have saved or invested. And that’s with no interest! Imagine if I was paying interest!!!
But you live and learn. I’ll NEVER put that kind of money on my credit cards ever again. Once they are paid off, that will be it for me unless I have the cash to pay the bill at the end of the month (because you do need credit cards for emergencies or certain purchases).
The good thing is that I’ve gone from as much as $35K+ in debts (car loans, credit cards, school loan, etc.) to less than $14K in total debt as of today. I’ll have all of it paid in another year, and I will have NO debts after that (other than fixed costs for rent, utilities, insurance, food, etc.). Which means, I will be saving/investing all income after my debts are paid in full.
I just wish I could get it paid faster! I hate having monthly payments, and I live below my means now in order to pay as much as possible each month.