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

[Mad Scientist]

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

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!

What did you do to accumulate all that debt?

I spent some of it on booze and hookers but the rest I just wasted! (I couldn't resist that)

 

[boedicca]

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

 

[jillian]

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 to you.

 

[geauxtohell]

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

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!

What did you do to accumulate all that debt?

I spent some of it on booze and hookers but the rest I just wasted! (I couldn't resist that)

No, seriously, how did you rack up 14K in credit card debt?

 

[B. Kidd]

You are the exception. More people are deleveraging through default.

 

[jillian]

No, seriously, how did you rack up 14K in credit card debt?

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.

 

[blu]

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 to you.

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

 

[jillian]

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 to you.

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

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.

 

[blu]

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

 

[blu]

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 to you.

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

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.

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

 

[boedicca]

No, seriously, how did you rack up 14K in credit card debt?

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.

I have three - for good reasons.

Persona Visa and MC, and a Company Amex card for business.

It's not uncommon when one travels for a card to get frozen because a charge from an "unsual" place is processed. If this happens, it's a pain in the ass to go through the phone call process of clearing up the freeze, so having a back up card is prudent. One can then do the phone call in privacy instead of in a restaurant or at a shop counter.

I also prefer to have a card for my business expenses so they are separate from personal ones.

 

[jillian]

No, seriously, how did you rack up 14K in credit card debt?

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.

I have three - for good reasons.

Persona Visa and MC, and a Company Amex card for business.

It's not uncommon when one travels for a card to get frozen because a charge from an "unsual" place is processed. If this happens, it's a pain in the ass to go through the phone call process of clearing up the freeze, so having a back up card is prudent. One can then do the phone call in privacy instead of in a restaurant or at a shop counter.

I also prefer to have a card for my business expenses so they are separate from personal ones.

i kept additional credit cards when i had my own practice. once i didn't need them any more i let them go. if my credit card were to be frozen because of an unusal charge (which i have had happen) i would use my debit card or we'd use my husband's card. I'm not a lover of debt. Even my co-op is paid off. The only thing I have on a recurring basis is my car lease and my husband's car. (aside from monthly bills).

 

[blu]

also if it werent for my amazon visa, I wouldn't get all the rewards!

 

[boedicca]

Any charges on my cards get paid in full each month, so having them has not caused me to lose financial discipline.

 

[william the wie]

Have you shopped around for a meal caterer yet? $50 buys 4 gourmet restaurant style meals vs. $100 for two eating out. Here in FL between Fresh Market and Publix soups, fresh veggies, chopped veggies and dough make it is easy for me to have homemade wholegrain calzones and quesadillas fast and fairly cheap. Got out of debt in 92 and it is amazing how high on the Hog you can eat, for how little and on how little income.

 

[Mad Scientist]

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 to you.

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

All my wife and I have now is the American Express Card which, as you all probably know, has to be paid in full every month. I'm gonna' wait for a year or so before I start canceling those paid off cards though.

 

[Mad Scientist]

No, seriously, how did you rack up 14K in credit card debt?

Vacations. State and Federal Taxes. Lots of expensive toys. And an airplane project that I never completed and sold at a loss.

 

[blu]

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 to you.

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

All my wife and I have now is the American Express Card which, as you all probably know, has to be paid in full every month. I'm gonna' wait for a year or so before I start canceling those paid off cards though.

as i said, if you care about your creidt score, cancelling them is a bad idea