I am in trouble. I have eight credit cards and about half of them are maxed out. I have a total of $56,147.34 in credit card debt. I also have about 35,000 in student loan debt. I am current on all payments and my credit score is actually okay (701). But I am drowning in these credit card bills. My average interest rate is %17.31. It ranges from 29.9% to 1.9. I approached a consumer credit counseling agency (the good kind) and they said that debt consolidation would not work for me because I already had good interest rates (this was before they were raised to 29.9%). I have taken on a second job with the hope of paying down my credit card debt, but it seems the more money I make the worse it gets. My income is $31880 gross from my main job, plus $1,100 per month from a trust fund and another $500 a month from my second job. I also have no assets--I rent an apartment.
I haven't seen anyone out there with no assets and this much debt who was trying to pay it down. The highest I've seen is like $30,000. Are there any other people like me out there? If so, please write and let me know if you have any advice.
debt nightmare
December 11th, 2006 at 07:54 pm
December 11th, 2006 at 08:08 pm 1165867731
You can also find his website, and read the success stories. I have heard and read of many people who were in worse shape than you, get out of debt, by creating a plan, a budget, and cutting up the credit cards.
December 11th, 2006 at 08:26 pm 1165868810
Those credit cards will eat you alive. Take charge today.
December 11th, 2006 at 08:33 pm 1165869202
Making more money is good...but cutting back on spending and expenses is better. Challenge every expense that you have and see where you can cut back and eliminate.
As mentioned above, DR is a good sourse of advice and information too.
You are in a tough place, but you can tackle the mountain of debt so long as you have a solid plan and strong determination!!
Welcome! You've come to a great place for support and ideas as you turn things around!!
December 11th, 2006 at 09:08 pm 1165871331
December 11th, 2006 at 09:08 pm 1165871336
December 11th, 2006 at 09:10 pm 1165871450
Um, your stats are indeed very scarey. However, whenever I feel a bit overwhelmed, I just think of my ex. I don't think of her too poorly or anything, but let's just say that she has 130k in student loans alone, and no assets.
December 11th, 2006 at 09:49 pm 1165873764
Look through the forums pages to find a ton of info on reducing your bills and living on less money. Life will be somewhat spartan for a while.
You may not use the CCs. Put them away and DO NOT USE THEM!!!!
Make a list of your CCs and start paying as much as you can on the highest priced one. Keep paying at least the minimums on the others. When you finish paying off the highest priced card roll that money over into the second card and procced so on until the cards are paid off.
Highest price means that interest on the principal is the highest in terms of cash dollars. 17% on 10,000 is more than 29% of 2000. Use your calculator to work this out.
Make your own lunch. Cut out soda. Cut back on the entertainment budget and go to free events. Use the library. Attend free lectures. See the forums for many more ways to cut the budget and put more money into paying debt. Rack up as many no spend days as you possibly can! There are a ton more ideas on the forums.
You have faced the reality of your debt and are taking control of your life. You can and will win! We are all with you here!
December 11th, 2006 at 10:03 pm 1165874604
December 11th, 2006 at 10:29 pm 1165876152
This place is great for support and information.
December 12th, 2006 at 02:26 am 1165890364
Step 1. Take a deep breath. Remember that no matter how bad it is, it will get better.
Step 2. Cut up all your credit cards except one major card, like Visa or Mastercard or something. While no one really needs credit cards, you really don't need eight.
Step 2. Make a list of all debts, including credit cards, auto loans, medical, whatever. Include interest rates, dates due, and current balance. Your list can be on a computer or a simple notebook.
Step 3. The snowball method PricePlus mentions works great. I have seen it work for others. You may need to cut some corners here. Figure out where your money is going that it doesn't really need to go. For example, do you have both a cell phone and a land line? Do you need both? How often do you eat out or go shopping?
Step 4. Record your progress on your list.
Step 5. Progress until your debt is paid off.
By the way, I am in debt right now because of medical bills and credit card bills incurred earlier this year because of a small medical crisis. I am using this method to get the debt paid off. So far, I have 4 debts of out 9 paid off. I started snowballing with the smallest debts first so I could see some real progress fast. Woo-hoo!
December 12th, 2006 at 04:32 am 1165897929
December 13th, 2006 at 03:15 pm 1166022949
You MUST write out EVERY SINGLE ONE of your monthly expenses. Don't guess, look at your bank statements, keep receipts for EVERYTHING. I thought we had cut back to the bare minimum until I started keeping receipts for each little run to the market for milk, and each stop at Sonic for fries & coke with the kids. Boy, did it all add up!
Although we've been discussing getting out of debt for quite some time, we're really still not completely on board. Husband & I have differing opinions about how to use our money, so it's an ongoing struggle.
Post here often... I have gotten great responses each time I blogged.
Good luck!
December 14th, 2006 at 06:17 am 1166077044
March 15th, 2007 at 02:21 pm 1173968467