Can we talk about credit card debt

[goettling]

Just wondering how much cc debt ya all have.

I will go first. I HATE cc debt.

I went from 7 thousand 1 and a half years ago, to 2 thousand.

I worked my butt off to pay this down and I don't make a whole lot.

My goal is to have that payed off somehow by the end of this year.

What is your goals? Do you have or had cc debt? How did you pay it or not? Any tips, advice, or you can just vent about your debt if you want.

Thanks

[DelTremens]

I have about 2k in credit card debt, much more in interest than in principal. I'm making double payments on my student loan to pay that off (will be before the end of the year), and putting all the money I can towards my credit cards. I hate them. I swear I will never ever have another CC. Ever.

I'm being much more responsible now. I opened my first 401k plan this year. I plan to buy a house sometime *very* soon, so the less debt I have, the better.

[bumble]

No advice here..only that I had no debt untill I met a credit card and now I am almost 3K in debt and I dont like it one bit.I will pay them off(that is my plan)and cut them up ,except for my smallest CC of 300$..that way I can rent a car and such.I HATE them and hate the feeling of debt.I have no control.If they had given me a bigger limit-I would have maxed that out ,too.

[V3gan]

advice would be pay a lot more then the minimum monthly :D

i got 1.3 G's debt

[kristia]

I have no more credit card debt! I finally paid off my card this past November. I was so proud that I went into Christmas not owing anything and got through Christmas not owing anything either. It was BAD for a while. We had used our cards to help finance a business (an organic grocery store) when business was low. I racked up $2000 on my card just in BREAD. In the end the business went under and VISA still needed to be paid.

My best advice is to take a good look at your monthly budget and economize where you can. Put everything you can on your card each month. I found making double payments each month to be a good way of going about it.

I also highly recommend "Money Drunk, Money Sober" by Julia Cameron. It really helped me get my finances in order.

[Elena99]

I'm allergic to debt. I hate it. I only have a few hundred at the moment, and that will be payed off soon, but I work hard to keep myself in a position where I won't have debt.

[Michael]

I don't have any. Pay mine off every month. About 7 years ago I had a few thousand dollars on several cards. What I used to do is pay double the minimum payment + interest on all the cards. Then I'd pick the one with the lowest balance and pay extra on that one until it was paid off. Then I'd move on to the next one. Worked out really well.

[goettling]

I have no more credit card debt! I finally paid off my card this past November. I was so proud that I went into Christmas not owing anything and got through Christmas not owing anything either. It was BAD for a while. We had used our cards to help finance a business (an organic grocery store) when business was low. I racked up $2000 on my card just in BREAD. In the end the business went under and VISA still needed to be paid.

My best advice is to take a good look at your monthly budget and economize where you can. Put everything you can on your card each month. I found making double payments each month to be a good way of going about it.

I also highly recommend "Money Drunk, Money Sober" by Julia Cameron. It really helped me get my finances in order.

I have not heard of this book. I will have to check it out. I love to watch Suzie Orman on Saterday night's if I am home.

[remilard]

I have no credit card debt, I pay off my balance monthly. My only debt at present is student loans and I don't ever plan to have consumer debt. If you have credit card debt, fastest way to pay it off is to make the minimum payment on every account except the one with the highest interest rate and pay as much as possible on that one. Since home, car, and student loans almost always have lower interest than revolving accounts, you should only make extra payments on those when the credit card balances are gone.

[beforewisdom]

Zero.

No debts either.

Not a lot of money, no house, but what is mine is mine.

[beforewisdom]

FWIW, I read a few financial planning books a few years ago when I finished switching careers, got out of school, and had finances to plan. All of the experts agree on the following about credit card debt.

1. pay off your credit card debts before investing. The interest you pay on credit card debt is higher then the return you get on most investments and will bring more value to you by settling them out first.

2. pay off your debts with the highest interest first, regardless of the amount owed. This usually mean paying off your credit cards first.

[bethanie]

$150.

I'm very strict with myself though. That Oprah finance expert gave some great advice which was that the reason we have so much debt, is that we lie to ourselves about money. She said we simply need to stop telling ourselves the lies that get us into trouble ...ie, "I will pay this off with my next check,"....I can float this check and maybe I'll have money in my account on time," "I really NEED to buy this item." "I can afford this new car."....etc. Taking this advice has really helped me keep myself and my bills very straight. Whenever I 'forget' the advice, I always get the same result (thus I try and never forget it).

I am working on paying off my credit card bill (my first credit card in years)...I pay as much as I can on it monthly.

B

[rabid_child]

I have no CC debt. It freaks me out. I pay my bill in full every month and don't buy things I can't afford.

[Thalia]

2. pay off your debts with the highest interest first, regardless of the amount owed. This usually mean paying off your credit cards first.
Very important point. Don't pay more than the minimum on say a student loan with only 4% interest (what my stafford is right now) if you have a credit card balance at 19% interest. Pay minimum on everything except the highest interest balance and put the rest toward that.

DelTremens- you mentioned you pay double on your student loans. I doubt they have the highest interest of all your debts.

[meatless]

I have no credit card debt. My mother racked up $30K in credit card debt so I know better. I use it only when I can only pay with a credit card (i.e. hotel), and pay it off as soon as I get the bill. No student debt either, I paid that off last month (I had $9,000).

I think credit cards are evil. They are useful for things like if you need to rent a car, buy something online etc. but the responses on this board are proof positive that even very intelligent people can fool themselves into using a credit card unwisely and unnecessarily.

[SeaSiren]

I paid all mine off and after three years my score was still low. Why? Because it is a game, I had not used any more credit so my score stayed the same. This was explained to me by a friend who does mortgages.

To get a high score. You need three (no more, no less) credit cards who report. Use each credit card every month. Do not rack up more than 40% on the credit card. Do not have any available balance above $1200. Using this formula I have successfully raised my score, it should be where I want it in about 9 more months.

This of course only works after you get your old one's under control. Paying off the higher rate cards first to the best of your ability.

[DelTremens]

DelTremens- you mentioned you pay double on your student loans. I doubt they have the highest interest of all your debts.

Actually my student loan is relatively high interest, and the reason I'm making double payments is that it has to be paid back in a finite amount of time (24 months), and I'd like to pay it off before I take out another one (going back to school in June). My minimum payment is $300, so I've been paying $600. Without going into an inventory of my debt to income ratio, which I don't think is necessary here, I'm also paying on a property I'm no longer using, so I have roughly a grand a month taken right off the top. I generally pay more than the minimum on my cards, too, but my focus right now is to get the student loan beast off my back. Whether that falls in line with all of your advice or not.

I actually have a very good credit score, because I use credit regularly and pay back as agreed. I agree that its useless to try to save money while I have high interest CC debt and, aside from my 401k, all my money goes to bills and household expenses.

[Tame]

I paid all mine off and after three years my score was still low. Why? Because it is a game, I had not used any more credit so my score stayed the same. This was explained to me by a friend who does mortgages.

To get a high score. You need three (no more, no less) credit cards who report. Use each credit card every month. Do not rack up more than 40% on the credit card. Do not have any available balance above $1200. Using this formula I have successfully raised my score, it should be where I want it in about 9 more months.



Not exactly. At the time of my first home purchase, my credit rating was 780. Two credit cards, only one was ever used, but used monthly.

What is more important than the number of cards reporting is a.) the amount of available credit you have available (affects the potential debt/income ratio), and b.) how long you have had the accounts.

For most folks, I usually recommend ditching the newer cards, and building a payment history with the older ones. Having paid a car loan or two in the past helps as well.

What hurt you wasn't exactly that you didn't use the cards as much as the potential debt you had in your hands. Granted, a strong payment history helps offset that some.

[Tame]

I actually have a very good credit score, because I use credit regularly and pay back as agreed. I agree that its useless to try to save money while I have high interest CC debt and, aside from my 401k, all my money goes to bills and household expenses.


Sounds okay to me. The 401K is a good idea, especially if it is a matching plan. The match is like an automatic return, so if you are getting $1/$1 on what you contribute, you are nailing 100% out of the gate. Plus you get the tax break to boot.

[Daral]

I have exactly 0 dollars of credit card debt. Of course, I've got a solid 40k in student loans... but then again they're interest free for the next 10 years or so, assuming I go to grad school.

[V422005]

$0 credit card debt, but I have other debt.

[remilard]

According to Fair Isaac, the major factors of the FICO score (upon which nearly all credit scores are based) are weighted as follows.

~ 35% on your payment history
~ 30% on the amount you currently owe lenders
~ 15% on the length of your credit history
~ 10% on the number of new credit accounts you've opened or applied for (fewer is better)
~ 10% on the mix of credit accounts you have (mortgages, credit cards, installment loans, etc.)

Mortgages are weighted more heavily than installment loans which are weighted more heavily than revolving credit.

2-4 is the best number of revolving accounts to have, they should all be major cards (store cards not as good) and if you have too many close your newest accounts.

Applying for credit cards can lower your score for 6 months, so don't do it within 6 months of applying for a car or home loan.

[eggplant]

$0.00 debt. I've never spent money I don't have, unless you count taking out a home loan. I have one credit card and I pay the bill every month. Of course I'm just taking care of myself. If I was supporting a family on my salary things might be different.

[epski]

Good grief. I'm amazed at the amount of totally debt-free people posting here. Maybe those with massive debt don't want to post?

My debt is considerable and ugly. If I gave the actual number, some of you might faint, so I'll refrain. Remarkably, my FICO score is still pretty decent.

I should have about 10% more debt knocked down in 10 months. Ah, the life of a young Hollywood upstart...

[Michael]

Good grief. I'm amazed at the amount of totally debt-free people posting here. Maybe those with massive debt don't want to post?


Quite possible. But we're sharing some good information here so hopefully they'll get something from it anyway.