Paying off those Credit Cards

[Coney]

There was a thread on this a while ago, like 2 years ago. But I thought it would be time to start a new one.

Has anyone here been good at paying off their massive credit card debt? We're so in the hole, and we've got a baby on the way.

One catch, we need to pay off our credit cards first so we can have an extra $400-500 per month. I'd like to quit my job and work on my art full-time (which is going quite well, btw.)

We have 6 months to do this...

We don't have a lot of items to sell that are worth much. We could have a sidewalk sale, I suppose, of old clothes we're getting rid of. We've changed our lightbulbs to CFL's to save on electricity. We don't eat out.

If anyone has any crazy money making ideas, I'd love to hear them. Or we could just commiserate on how much credit cards suck, then give a big Hooray! for paying them off!

[SeaSiren]

This is what I use to help with finances:
http://www.debtproofliving.com

[sunshinegal]

I hate credit cards. I have one I am paying off right now and once it is paid off I am chopping them all up but one which will be used in emergencies ONLY. I am paying off a 4-5 month layoff that my boyfriend had and at the time I was making not enough to support a household of 2.5 (his daughter lives with us part time), pay the rent, pay a car payment and insurance on 3 cars and all of the typical bills. Since he has gotten a job again, I have gotten two promotions and am not starting to make more then I spend in just bills alone. This was the first check that I actually had $15 left over and paid some off on my credit card bill! YES! :juggle:

I have been researching finances and how to manage them better, so this thread should be interesting. Thanks for bringing it up!

[purrpelle]

if you own a home, you can take out a loan to pay off the cards. of course, you have to pay off that loan, but you have longer to do so and the rate is lower.

you could keep switching the cards to zero interest cards, if you aren't doing that already.

what about one of you (or both) taking a part time job?

[Michael]

If you switch to lower interest credit cards be sure you get rid of the old ones! And I hear you can sometimes negotiate a lower rate with cards you may already own.

I was never too in debt but about 9 years ago I had a few cards with a few thousand dollars between them. I always paid twice the minimum plus interest and then paid any extra on the card with the lowest balance.

The "experts" would probably suggest paying off cards with the highest rates first but by paying off the cards with the lowest balance it gave me a sense of satisfaction and accomplishment.

[flvegnewbie]

I know this is extreme, but if you have two vehicles you could always sell one and live with only one for while, at least until the cards get paid off?
Because more likely than not, if this is your first child you'll probably be shopping for a different vehicle in the next year anyhow.

Also, checking into what types of insurances you carry on both vehicles & home owners. If your car is older you might be able to raise the deductible and that would drop you insurance payments.

Defiantely have a yard sale or if your an ebayer, sell some stuff on ebay. Books are a big item that alot of people don't usually think about selling.

Drop cable t.v. for a few months, look over your phone plan and see if there are some things you can cut out. What about any "extras" that you spend each week? Magazines, newspapers, picking up coffees out in town (invest in a nice thermos), etc.
Also, check your thermostat. Depending on where you live if you can up your indoor thermostat by 2 degrees, it will really help save on your electritcity bills.
Also look at your cell bill (if you have one) and see if there is a cheaper plan you can switch too.

Also the other poster suggested a part-time job, even if not for you (not sure of when your babies due date is), but maybe your hubby could add a few afternoons a week?
Maybe you could babysit an afternoon or two for someone? I know it doesn't usually pay that well, but even an extra 40-50.00 a week could go towards your cc.

Can you tell that we've also been through some "crunch" times?
I hope your able to get those cc paid off, it's a wonderful feeling not having them!
Good Luck!

Michelle


Edite to add: I knew I would have a few more things to add!! First and foremost, cut those cards up & call and cancel the accounts. That's the very first thing you should do if your serious about getting them paid off. If you don't have them you won't be able to use them anymore!

[remilard]

if you own a home, you can take out a loan to pay off the cards. of course, you have to pay off that loan, but you have longer to do so and the rate is lower.

This is the best solution if it is possible. The only downside is that the house is collateral.


you could keep switching the cards to zero interest cards, if you aren't doing that already.

This will have credit score consequences as will this


If you switch to lower interest credit cards be sure you get rid of the old ones!

Never close a revolving credit account, the age of those accounts is a significant credit score factor.

[purrpelle]

This is the best solution if it is possible. The only downside is that the house is collateral.



supposedly, this is the best way as it helps your credit score in the long run (or so i was told)

i did this, and pay as much as possible extra on the princple every month.

[soilman]

You're profile says you are an "illustrator." Can you do web graphics?

[Coney]

but by paying off the cards with the lowest balance it gave me a sense of satisfaction and accomplishment.


That's what I've been doing. I figure the card with the massive amout will take a while, so I'm concentrating on eliminating the smaller one right now. As I pay one off, I cancel it and cut it up and TRASH IT!:vebo:

Soilman: I can do some web stuff, but only minimal. I can work on my website, but have no interest in working on that stuff for money for other people. I make posters for bands most of the time, ink/watercolor on paper.

[purrpelle]

That's what I've been doing. I figure the card with the massive amout will take a while, so I'm concentrating on eliminating the smaller one right now. As I pay one off, I cancel it and cut it up and TRASH IT!:vebo:

Soilman: I can do some web stuff, but only minimal. I can work on my website, but have no interest in working on that stuff for money for other people. I make posters for bands most of the time, ink/watercolor on paper.

don't cancel it!

[janie]

Pay off the cards with the HIGHEST interest rate, first!

[purrpelle]

^^^ yes, or transfer the smaller balances onto your existing cards, to simplify if you must. keep the cards open (or at least the cards that you have had the longest.)

[Michael]

Never close a revolving credit account, the age of those accounts is a significant credit score factor.

Quite possibly true. Two reasons I had for suggesting getting rid of them... A) It's seen as potential debt by creditors and B) You may be tempted to use them.

[soilman]

Why can't you just get a new card, get a cash advance on it, and use that to pay off the existing cards? I'm just kidding.

[veggienurse]

I believe Oprah's debt diet suggests to pay off the lowest balances first in order to have small victories and keep you motivated.

[SeaSiren]

The link I posted earlier has a rapid repayment plan. Just plug in your credit cards and it will tell you how much to pay each month and when you'll be debt free.

[Elena99]

We have a lot of credit card debt. We're going to sell our car (which is still with my in-laws in the states, and we're in Canada. We don't want to bother getting it sent all the way up here, and I don't want to drive it from MD to PEI) but I don't know how much money we'll get towards our debt with it. Might be enough to pay off my credit card, but not my husband's. Thankfully, he now has a good job and should be able to have it paid off within a year.

I don't have any great tips, just wanted to whine, too. :)

[remilard]

Pay off the cards with the HIGHEST interest rate, first!

That would be the financial answer. The economic answer (accounting for utility) is to pay the lower balances first for many people. Morale is worth a lot.

[janie]

^^ Good point.

I'd rather pay less financially over the long run though. Morale doesn't pay the bills. :p

[gypsygeek]

If you own any CDs or DVDs that you don't use/play often, consider selling them to a local video store or record store that also carries movies. I know most people don't like this idea, but you should treat old CDs and DVDs like old clothes - if you haven't used it in a year, sell it. I did this and made over $650 by selling all of my DVDs (~100) and ~25 CDs.

Another suggestion is to call your credit card companies and demand that they lower your interest rate. Credit cards are a highly competitive industry right now - with everyone and their uncle offering Visa or MasterCard accounts now. Keep in mind, this will only work if you have an excellent payment history with the company - and you have to demand it, not ask. Tell them, if they don't lower the interest rate, you will switch your balances to other cards that are offering no interest on balance transfers. Usually, they will agree to drop the rate a bit, which means more money toward the principal debt each month. If they don't agree, then all you've lost is the time it took to call them, since you don't actually have to switch your balance to another card. Also, if the first customer service person refuses, ask for a supervisor - sometimes that can make the difference in getting a "yes" answer.

[Coney]

It always helps to talk to a supervisor. I've gotten pretty good deals that way.

I need to call my massive balance card and ask about a lower rate. We've had it for years, its the one we've had the longest. They're usually good about giving you a better rate if you've had it a long time.

Lately, I've been good about not spending any money on eating out for lunch during the week. I don't usually, but any of the $5 amounts all add up. The only thing I've gotta buy in the near future is maternity clothes, but there's a re-sale shop I can go do downtown.

We don't own a car, so we can't sell it.
We don't own our home, so we can't re-mortgage.
We don't have cable, so we can't cancel it.
We do have some things we could put in a yard sale.
My husband's got some books we could also sell.

We're working on it. If we can just knock it down to half, I'll be happy.

[purrpelle]

can you guys barter for services? and if you work at your local co-op you can get a discount.

[Coney]

I've got 2 jobs already. My husband is a full time musician, goes out on tour, and has no time to spare, so an extra job is out of the question for us.

Nice idea, though.