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Getting out of credit card debt

I'm over 25k in debt and I know I can get out of it but I need help please. Who's done it? How did you do it? I feel so overwhelmed.

Tue. Sep 25, 10:04am

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One thing some people do successfully is take a second job, for instance an evening job. These usually aren't too glamorous, but if it's just for a few months.

Making two payments a month (which makes sense if you get a paycheck every week or two weeks) brings down the finance charges much faster.

Also, it depends on what the 25k went to. If you have a lot of stuff sitting in a storage locker, for instance, sell it on e-bay or through other ads. That way you get some money for the stuff AND you can stop paying monthly rent on the storage space. Ditto if you have >1 auto -- ask yourself if you really need a second one. Although not always practical, getting rid of a second vehicle reduces your reg. fees, insurance, gas consumption, etc.

Patience! It's just like losing weight -- you have to commit to lifestyle changes, and the debt goes down really gradually.

Good luck!

Tuesday, September 25, 2007, 10:27 AM

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My husband and I paid 40k in credit card debt in the last 2 years. Plus at the same time we bought our first home, so this is in addition to our mortgage. 2 years ago I wouldn't think this would be possible, but we did it. First of all, I we got a line a credit with interested rate at prime for first six month, then it went up, but it was still better than credit card interest. Then we set up regular payment plan. In additon to that ALL additional money we got we put toward this debt. Tax returns, bonuses etc...We have not gone for holidays for 2 years!!! Our house needs new windows, and funiture, and we postponed that until we have money saved, since we didn't want to start the cycle of debt all over again. What we've done was hard and not for everyone, but we wanted to have children and did not think we could aford having children with the debt we had. Our motivation was great, that is probably why this plan worked. For others maybe a little bit more relaxed plan would work.

Tuesday, September 25, 2007, 10:36 AM

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cut up all cards but one, and only use it for emergencies. Always pay off the full monthly balance and if, possible, double the payments in order to pay off the debt. When you write the check to the card company, add an extra $50-$100 to the check. You won't miss it and the $ is going to a better place.

Tuesday, September 25, 2007, 10:49 AM

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One of the most important things is to cut your spending! I don't know what your situation is like but many people are spending more than they can afford to. I've paid off 20k in student loans in 2 years, but I don't spend much on extras, and all extra money goes to loans. Don't even think about making the minimum payments!

Tuesday, September 25, 2007, 10:55 AM

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i used freedom point to consolidate my cc debt, around the same as yours. your credit score will lower a little for the first three months, but when your debt goes down and your available balance goes up, so does your credit score.

just make sure to keep on top of them--they didn't confirm a contract with one of my cc companies and it took 6 months and i finally got it resolved, but i suffered on my credit score because the cc company said i was late for 6 months.

on the other hand, one payment, lower every month for 5 years was worth it! they got my interest rates cut in half, therefore, more of my payment goes to the balanced owed, not interest.

with the laws that passed two years ago, they charge 3x the amount for the minimum payment--that's why i was forced to do something. now i'm two years into my payment plan and i don't have to worry about it.

keep in mind you will not be able to use those cards even if your have an available balance-they basically close them down. you also cannot apply for new cc's because that will void your agreement with the ones you are paying on. you also cannot apply for a car loan or a mortgage for 90 days.

let me know if you have any questions regarding this topic--i'd love to help.

disclaimer: i reserve the right to mispell, bring up old threads, change my mind, change my underware, and drink alcohol. ;)

Tuesday, September 25, 2007, 10:56 AM

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Well the first step is to write it all down and create a plan. Right out which cards you have, the balances and their interest rates. If you can transfer any balances to a lower rate card do it.

Set a budget and determine how much you can apply to your credit cards each month to work to paying them off. You want to set it high enough that you are actually paying them off, but not so high that you are strapped at the end of the month and need to put charges on the card to get through till the next month.

Then you need to make the minimum payment on all your cards and then the rest of the amount you can pay apply to the highest interest rate credit card.

For example:
Card A: $10K @ 12% min payment $250
Card B: $5K @ 15% min payment $100
Card C: $5K @ 22% min payment $125
Card D: $5K @ 18% min payment $110
Budget determines you can pay $750 a month to credit cards.

So you pay $250 to Card A, $100 to Card B, $110 to Card D, and the remaining $290 goes to card C. Once card C is paid off keep paying the $750 a month, now $250 to Card A, $100 to card B, and $400 to card D.

Tuesday, September 25, 2007, 10:58 AM

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Tuesday, September 25, 2007, 11:05 AM

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i'm the 10:56 poster using a consolidated credit service and my payments are $635/month for 5 years.

Tuesday, September 25, 2007, 11:11 AM

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11:05 - anyone who takes home more than $750 a month has the potential. Duh.

Tuesday, September 25, 2007, 11:25 AM

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1125-actually, you'd need to have $750 extra every month to afford that payment schedule. or have $750 being spent on "non-essentials"

the question was a bit rhetorical, an exclamation, an expression of shock.

duh. nice word to use. it furthers nothing but the notion that you are rude.

Tuesday, September 25, 2007, 11:31 AM

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