Ask A Guy Who Just Finished Paying Off $14,000 In Credit Card Debt Anything!

Discussion in 'Economy' started by Mad Scientist, Dec 16, 2010.

  1. Mad Scientist
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    Mad Scientist Deplorable Gold Supporting Member Supporting Member

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    I'm credit card debt freeeeeeeeee! Any other Dave Ramsey fans in here? :D

    It took about four years of beans and rice, rice and beans but I just paid off the last card on Monday. I had 7 cards totaling just over 14K. Some were still in the initial low percentage rate but 4 of them had ballooned to near 30%! The minimum payments totaled almost $500 dollars a month!

    We did the Dave Ramsey Debt Snowball method to pay them off. That involved taking the lowest debt (about 1500 at the time) and shoveling all our available funds left, after paying all the bills, and putting towards that card. When that was paid off we'd move to the next highest card and pay that, and so on.

    My salary during that time was about 50K a year before taxes but I worked as much overtime as I could. We also own two houses and pay about 2K a month in mortgages. Fortunately for us, we have a tenant in the house in California plus we didn't go crazy and cash all the equity out of it like a lot of people did.

    Gawd what a fuckin' relief that is! Now we move on to paying off both of the cars! :lol:

    I spent some of it on booze and hookers but the rest I just wasted! (I couldn't resist that) :lol:
     
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  2. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    Congratulations!

    When I was in grad school, I ran up $5K of CC debt and was horrified by it. I cut back on everything for 18 months and got rid of it. Since that scare, I have only used CCs for convenience and pay the bills in full each month - and have paid cash for cars. My only debt is the mortgage - and we're on an accelerated plan to pay that off as well.

    No Debt = Freedom
     
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  3. jillian
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    jillian Princess Supporting Member

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    Congratuatlions, MS.

    You must feel really really proud and relieved. Now you have to make sure you only keep one credit card and pay it to zero every month.

    but a big :thup: to you.

    :beer:
     
  4. geauxtohell
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    geauxtohell Choose your weapon.

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    No, seriously, how did you rack up 14K in credit card debt?
     
  5. B. Kidd
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    B. Kidd Gold Member

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    You are the exception. More people are deleveraging through default.
     
  6. jillian
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    jillian Princess Supporting Member

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    he had seven cards. if he made minimum payments on each card and the interest compounded on a monthly basis, it didn't take long for each card to hit an average of 2 grand. if he made a payment late on any of the cards, then default interest would likely have kicked in on all the others. that can be as much as 28% interest per year per card, making it almost impossible for an average person to pay to zero.
     
    Last edited: Dec 16, 2010
  7. blu
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    blu Senior Member

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    if he ever cares about credit again, one credit card is bad. 3 seems to the ideal number you want at least one account over 7 years old, and you need to use one of the cards each month and then pay it off in full when bill comes. this will keep your revolving credit score high which is what constitutes your credit score
     
  8. jillian
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    jillian Princess Supporting Member

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    i don't think he needs the three if he's also paying off two cars and phones and cable, etc. i'm not expert on how to keep up the credit score, but i would never keep three cards. but maybe that's just me.
     
  9. blu
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    blu Senior Member

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    when i first graduated college and started a business, i was living with my gf & her son and was barely making anything. after about 6 months of "startup" time i had hit 15k in CC debt, but its down to about 1k now since the business has picked up and all that. probably won't ever be at zero b/c i don't care about $10 a month or w/e in interest fees but we are very glad to have it at a manageable level and with my credit score high again
     
  10. blu
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    blu Senior Member

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    cars and houses are secured debt while credit cards aren't. if you only pay to secured debts then your credit score will be crap as you have no revolving unsecured debt.

    as an anecdotal example, my friend who rents out 5 houses and has a steady full time job couldn't even get a credit card (he never had one before) without sending in all the rental leases and w2 etc since he had 0 unsecred debt. its like starting from scratch

    I have 6 or 7 cards, keep 2 in my wallet (one visa, one mastercard cuz some stores dont take them all) and the rest sit in the safe. the mroe cards you have the higher credit you have, the lower your balance is vs your total unsecured debt, leads to the highest score
     

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