Credit Card Debt Anyone?
Replies
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Two Words.... DAVE RAMSEY. If you are 20 years old and are having this problem, use the advice everyone else gave you to pay off the credit cards and then read all about what Dave Ramsey teaches and you will have no worries about your future. You are still young, and lots of people make these mistakes when they are young. I did the same thing, Dave Ramsey changed us forever!!! Don't use credit cards either, cash for everything. If you don't have the money to pay cash, YOU DONT HAVE THE MONEY!!! I am sure your family will understand if they don't get an expensive gift for Christmas. After all, the holidays should not be about gifts, they should be about being with family and doing nice things for people and all that jazz
Yup, I am a big fan of Dave Ramsey and his method.0 -
Two Words.... DAVE RAMSEY. If you are 20 years old and are having this problem, use the advice everyone else gave you to pay off the credit cards and then read all about what Dave Ramsey teaches and you will have no worries about your future. You are still young, and lots of people make these mistakes when they are young. I did the same thing, Dave Ramsey changed us forever!!! Don't use credit cards either, cash for everything. If you don't have the money to pay cash, YOU DONT HAVE THE MONEY!!! I am sure your family will understand if they don't get an expensive gift for Christmas. After all, the holidays should not be about gifts, they should be about being with family and doing nice things for people and all that jazz
Thank you!0 -
I had NO cc for years- and finally caved and got one- and for a while I managed it great- then struck on some REALLY hard times and was literally surviving off one. (for those of you judgy types- I'll ask you how you make a pay check of 500$ that comes only two times a month stretch to cover an 800$ rent and gas and groceries and your truck payment.
Please- I'm all ears)
Maybe move into a cheaper apartment, sell the truck, ride the bus, and get another job?
Not that I really know your situation or anything but there are always options. It's one thing if you covered the difference for a month, but you can't live above your means forever. Your comment made it sound like you had no choice and my only point is that you always have a choice. However, it may not always be easy or convenient.
That was similar to my line of thinking. But people hate hearing it or come up with more excuses than I have time for.0 -
Don't have a credit card. I have a thing called savings. Every Wednesday money it taken from my bank account & placed into a high interest savings account. Even while I was not working & could not afford to even save $10 I still had the money transfer over.
It's what normal people do.
Actually no.
I think that's very rare even among people with six figure (and higher) incomes.
It's a good idea but no, not the NORM0 -
My wife and I have done this for years:
**Decide now what you are going to spend on gifts in 2014 (ie: $2000)
**Open a savings account
**Go to your HR dept and set up a split for your automatic payroll deposit (in this case, $167/mo; or about $77/paycheck if paid biweekly)
*** Catastrophic event in November costs you $2000.
***Pay CASH for catastrophic event from your emergency fund.
**Enjoy paying for all your gifts with cash!
Fixed it for you.:laugh:
Fixed again 0 -
When it comes to financial gurus, I prefer Suze Orman. Her writing is a little less cutting and judgy. IMO. Best idea... read them both and take your pick. They both generally use the same concepts.0
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Didn't need this to be a bashing session...I'm 20 years old who wanted to treat my family for once rather then them spending all of their money on me.
I hope you will clear your debt, but this actually made my heart smile, OP. Good on you, for wanting to do for others!
I get where you are coming from, and I also think it's great to do for others. That being said, I'm sure your family understands the situation you are in being young and just starting out. I am certain they would much rather see you on your feet that in debt. Without going into details, my parents weren't around much to teach me about finances and how to manage them. Not becuase they didn't want to, but becuase they couldn't be. When I got to college I applied for a Visa card with no cluse as to what I was doing. Worst financial decision I ever made. I don't use credit cards anymore and I am still learning as I go as far as financial stability goes. Best of luck to you getting it paid down quickly.0 -
I have a ton of CC debt...but that is because I was out of work for a while and everything had to go on the card to survive. Been almost 2 years and I am still struggling pretty bad. If you can avoid it, avoid it at all costs!
yup me to.
I had NO cc for years- and finally caved and got one- and for a while I managed it great- then struck on some REALLY hard times and was literally surviving off one. (for those of you judgy types- I'll ask you how you make a pay check of 500$ that comes only two times a month stretch to cover an 800$ rent and gas and groceries and your truck payment.
Please- I'm all ears)
anyway. yes- got in up to **** creek with that- did better- and then it's all been down hill. It's my biggest weakness. I need a MFP for my spending- I'm a retail therapy person- I don't do food therapy. ... I get depressed- I spend.
rough.
BF is trying to help me pull my crap together- it's rough.
Same here. Had to LIVE on credit cards for almost a year, lost the job, ex decided to up and leave, leaving me paying all of my bills PLUS his half of our "house" bills. It was horrible. Still trying to recover from it. It's extremely hard to pay off credit cards when you live alone and don't make a lot of money.
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You've heard enough of the high and mighty, so I won't add to it with the fact that I have been 100% debt free for the past six and a half years. Oh wait, just did...sorry
But seriously. I have been there, done that. I started out with 1 little store credit card at age 18 to "build my credit" and wound up amassing HUGE C/C debt that took many years to pay off.
Basically I spent my entire 20s in debt to C/C bills and stuck in a cycle of paying them down, then "needing" them again and so on. It really caused problems for me. I never missed a payment so I still had excellent credit but it is NOT fun spending as much on C/C bills as you spend on rent. Again, I've been there.
I hope you're not doing it to show how successful you are (read: pride) or pay your family back for past gifts, etc. They will love you even if you buy them each a $10 gift. They know you are young and just starting out. Please remember this!
I'm doing it because of the reason that I really wanted to get them gifts not just one or two things...I know it sounds silly and I know they would love me if I got them nothing but I love to give...it makes me very happy to see others happy.
Your heart is in the right place, your wallet not so much. I have been there done that when I was in college. Felt just as you do, did as you did. Now that I am older and wiser and look back on it, my parents were happy with just my presence and did NOT in any way at all want me to go into debt to buy them something they didn't need. I understand your point, but credit card debt is an awful thing hanging over your head. Take the good advice from others and have a super great holiday!0 -
I was always against credit cards until I learned about one that was a rewards card. So I got it. $400 limit -- this also helped me build up a credit score. then I decided to take a cruise and realized I could never afford it without getting another credit card of some sort. So I got another CC -- $2000 limit.
It's been a year and a half since I got that $2000-limit CC... and I've got about $600 left to pay on it. Not to mention the other credit card.
I cancelled the $2000-limit card so I wouldn't be tempted to use it again and I keep the other one in a drawer at home for emergencies.
Over the past couple years I have paid off a few other CC's (Kohls, Art Van Furniture, Macy's, Victoria's Secret, etc), paid of my $14k car, paying down the mortgage for the addition that was built onto the back of my house, and making all other bill payments on time. I make less than $2000/month.
My suggestion is to follow everyone else's advice -- pay that bad boy down/off as soon as possible... then either get rid of it, or keep it hidden in a drawer for emergencies.
I failed to mention above that during the above timeframe I was furloughed from work not once, but TWICE. Got into a car accident. went through major health struggles. was cut 20% of my pay/hours.
Sometimes life sucks, but you can find a way to make it through. Just deny yourself the little pleasures and treats that cost money so that the important, necessary things get taken care of.
Good luck to you, and Merry Christmas!!!0 -
I have everyone here beat. Debt and credit card free for 22 long years. 0
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I have a ton of CC debt...but that is because I was out of work for a while and everything had to go on the card to survive. Been almost 2 years and I am still struggling pretty bad. If you can avoid it, avoid it at all costs!
yup me to.
I had NO cc for years- and finally caved and got one- and for a while I managed it great- then struck on some REALLY hard times and was literally surviving off one. (for those of you judgy types- I'll ask you how you make a pay check of 500$ that comes only two times a month stretch to cover an 800$ rent and gas and groceries and your truck payment.
Please- I'm all ears)
anyway. yes- got in up to **** creek with that- did better- and then it's all been down hill. It's my biggest weakness. I need a MFP for my spending- I'm a retail therapy person- I don't do food therapy. ... I get depressed- I spend.
rough.
BF is trying to help me pull my crap together- it's rough.
Again, I will say DAVE RAMSEY. He will change your life. You can't afford a truck payment?? DONT have a truck!!! There are a lot of other cost effective modes of transportation. Can't afford an $800 rent payment?? Live somewhere else that does not cost $800... get a roommate....get 2 roommates. I can think of many solutions here. Seriously....read Dave Ramsey....0 -
Two Words.... DAVE RAMSEY. If you are 20 years old and are having this problem, use the advice everyone else gave you to pay off the credit cards and then read all about what Dave Ramsey teaches and you will have no worries about your future. You are still young, and lots of people make these mistakes when they are young. I did the same thing, Dave Ramsey changed us forever!!! Don't use credit cards either, cash for everything. If you don't have the money to pay cash, YOU DONT HAVE THE MONEY!!! I am sure your family will understand if they don't get an expensive gift for Christmas. After all, the holidays should not be about gifts, they should be about being with family and doing nice things for people and all that jazz
^ this... I did the whole Dave Ramsey thing at first (using the envelope system) but got to a point where I hated dealing with cash but I do understand that is what works for some people. I do though only spend what I have in the bank, with the exception of a possible car payment coming up in the future or a house.0 -
I don't own a credit card. I pay cash for everything..
Dave Ramsey!!0 -
My wife and I have done this for years:
**Decide now what you are going to spend on gifts in 2014 (ie: $2000)
**Open a savings account
**Go to your HR dept and set up a split for your automatic payroll deposit (in this case, $167/mo; or about $77/paycheck if paid biweekly)
*** Catastrophic event in November costs you $2000.
***Pay CASH for catastrophic event from your emergency fund.
**Enjoy paying for all your gifts with cash!
Fixed it for you.:laugh:
Fixed again
I am liking you more and more.0 -
Pay it off quickly. Compound interest is a bee-yotch, and she's eyeing you quite hungrily.0
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No. No. No. If I can't pay cash, I can't afford it. I will use layaway all year long for Christmas versus putting it on a credit card.
The only things that go on my credit card are monthly charges like gym membership and the newspaper. Those items are budgeted so I have $$ to pay them every month.
NO NO NO credit cards!!!!! They are the devil!0 -
how about...don't spend what you don't got??
Change your mindset on gift giving. Give your time to someone. Make a meal or homemade treat for someone special. Write a letter someone has been longing to get and you've been meaning to send. Gifts like these usually have more impact than another new sweater/gadget that has a lifespan of maybe a year before person tires of it.0 -
Didn't need this to be a bashing session...I'm 20 years old who wanted to treat my family for once rather then them spending all of their money on me.
Not saying this to bash you. I'm saying this more as someone who has credit card debt and learned her lesson the hard way - I would bet that most of your family knows you can't afford whatever it is you got them and would be just as happy getting something of lesser value, knowing that it came from you. It sounds cheesy, but it really is the thought that counts. If my 20 year old cousin bought me something for Christmas that I knew she couldn't afford as a full-time student working a part-time job making minimum wage, I would feel AWFUL. I'd rather get a gift that I know is within her budget (or just a card and a hug...no physical gift needed!). It's so wonderful that you want to spend money on your family for Christmas as a way of showing them that they're special and that you care, but I'm sure they would understand and be just as happy with lesser gifts. But, you're also 20 years old...you live and learn. Just be sure to pay it off ASAP and at the very least, never ever miss a monthly payment.0 -
If you do some deep research into this you will find that that's simply not true. You don't need to carry a balance to raise your score. You don't get extra points for interest paid. What matters are the monthly balances that creditors report to the credit bureaus. These balances can be captured at any time during your credit card cycles. These balances are weighed against your available credit, and this debt-to-credit-limit ratio, or utilization, makes up about 30 percent of your FICO score, the most widely used scoring formula.
Why would I be incentivised with a higher credit score for agreeing to the penalty billing cycle interest? Answer: You are not.
Pay you balance in full. Don't pay interest if you don't have to.
Can you cite your source because when I was in the process of rebuilding my credit not only my financial officer but TransUnion, & Experian (2 of the 3 main credit bureaus) advised this on their own websites as well when I was a member.... or has this changed over the years?
http://hiepsfinance.com/2013/03/27/do-you-need-to-carry-a-balance-to-build-credit/
http://www.smartcredit.com/blog/2013/08/15/do-i-have-to-carry-a-balance-on-my-credit-card-in-order-to-build-credit-faster/
http://www.experian.com/blogs/ask-experian/2011/09/14/use-cards-and-pay-balances-to-build-credit/
http://www.huffingtonpost.com/creditcom/credit-card-balance_b_1605593.html
http://www.creditcards.com/credit-card-news/tanisha-warner-carry-credit-balance-build-good-credit-1581.php0 -
never had one and not sure if I ever will.0
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Two Words.... DAVE RAMSEY. If you are 20 years old and are having this problem, use the advice everyone else gave you to pay off the credit cards and then read all about what Dave Ramsey teaches and you will have no worries about your future. You are still young, and lots of people make these mistakes when they are young. I did the same thing, Dave Ramsey changed us forever!!! Don't use credit cards either, cash for everything. If you don't have the money to pay cash, YOU DONT HAVE THE MONEY!!! I am sure your family will understand if they don't get an expensive gift for Christmas. After all, the holidays should not be about gifts, they should be about being with family and doing nice things for people and all that jazz
We used Dave Ramsey and paid everything off this year. Paying cash for Christmas this year. As long as you can pay off the credit cards in a timely manner, by all means use them. We cancelled all but one.0 -
Don't have a credit card. I have a thing called savings. Every Wednesday money it taken from my bank account & placed into a high interest savings account. Even while I was not working & could not afford to even save $10 I still had the money transfer over.
It's what normal people do.
Actually no.
I think that's very rare even among people with six figure (and higher) incomes.
It's a good idea but no, not the NORM
Correct.... As Dave Ramsey would say, BROKE is the norm. I don't know about you, but I don't want to be normal.
http://www.daveramsey.com/new/baby-steps/0 -
Didn't need this to be a bashing session...I'm 20 years old who wanted to treat my family for once rather then them spending all of their money on me.
When you are older than 20 and have $$ in the bank, THEN you treat your family. Until then, bake them a cake. If you want to splurge, use sprinkles.0 -
Unfortunately personal finance is like weight loss. There is often a lot of denial until the problem gets really bad, lots of special snowflakes, and takes time and dedication.0
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Do you even lift?
Just kidding.
When my wife and I were younger we worked our way into a more affluent circle and location, and of course while trying to keep up the appearance of it all we racked up a pretty hefty sum of debt. I won't even mention because people either freak or just don't believe it. But when we turned 30 I made a commitment to sure up our finances, and that meant a lot more sacrifice and less entitlement. That is, I used the "do I NEED it or just WANT it?" method when purchasing. With Xmas gifts I used the same principle and also set a spending limit. I tried to pay cash as much as possible.
We've been on 99% cash basis for over 10 years. We have had some good fortune along the way, but I like to believe that financial diligence leads to good fortune.
My first bit of advice is, set very low limits on your credit cards so you CAN'T spend a lot. Trust me, if you need more credit you can just call and ask and they will be more than happy to up the limits, but that is ONLY for emergencies. It also protects you if someone steals your card.
Also, even when paying off your cards, make sure you are putting something in savings so you can start moving towards a cash basis. Nothing is sillier than when I see people dropping HUGE payments on cards, but then having no cash saved up for anything new, so they just keep charging things. The finance charges are what kill you so you need to start buying as much as possible with cash. Savings is a discipline that is learned with practice.
The other thing that is important in overall financial responsibility is, learn how much something really costs. A couple cases in point here.
First, I had a friend who was buying a couple Starbucks fancy coffees every day. I was floored by this because she was pretty tight budget wise. She had not really thought about it except that $5.50 wasn't that much for a decent coffee drink. While that may be true when I showed her she spent over $4000 in a year JUST FOR THOSE COFFEES, she started making it at home for the smallest fraction of the price.
A second point is, what might sound like a lot, is NOT a lot of money. In terms of your future, you might think $100,000, $500,000, or $1,000,000 is just a God awful amount of cash. Realistically, you should have $1,000,000 as a goal for retirement. To break that down, if you had that $1,000,000 in a bond fund or something that is paying 6% return, your yearly income is just $60,000 a year. That is a good wage really, but think about what it takes to save up $1,000,000....or $500,000...or just $100,000. Think about it like this: Most people have no issue paying $150/month for a simple cell phone with data. If you were taking that $150 per month and sticking it in savings each month it would take you about 25 years of investing with a 6% return rate to just get to that $100,000. So $150 a month is a LOT of money, but conversely $100,000 in the long term is NOT. If that makes sense.
Bottom line is, just think forward more than the moment and watch the debt.0 -
zero, pay it off each month, use it only to acquire airline miles to fly out of Alaska.0
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Didn't need this to be a bashing session...I'm 20 years old who wanted to treat my family for once rather then them spending all of their money on me.
When you are older than 20 and have $$ in the bank, THEN you treat your family. Until then, bake them a cake. If you want to splurge, use sprinkles.
This really isn't fair to assume that people in the early 20 range don't have $$ in the bank, which is kind of what I think you are doing.0 -
I've actually frozen my Visa card in water and stuffed it in the back of my freezer.
Christmas is always rough. This year I got smart about it. I looked into the rewards program through my bank for having a Debit card, my one credit card has rewards points and also my health insurance has an incentive program that allows gives gift cards for doing check ups, flu shots ..etc.. I spent $20 out of my own pocket for Christmas when everything was all said and done.0 -
Pay it off quickly. Compound interest is a bee-yotch, and she's eyeing you quite hungrily.
“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”
― Albert Einstein0
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