Home Forums Hunting & Shooting Hunter's Campfire How to pay down credit card debt effectively?

I'd like to get out of credit card debt. However, it is very difficult on my income ($29k per year) and wife's income as a hairstylist.

I have a mortgage which with escrowed taxes is $540 per month.

Just seems like every time I make some headway, something happens and I end up going backwards.

Derek

I'm assuming you have already destroyed and/or canceled every card? Keep chipping away.

It's akin to weight, quick to gain, slow to lose.

I dont think there is an easy way. You can call and speak with your credit card company and ask them to lower your rate. Lowering your interest rate will help. Your other option is to find a 0% interest balance transfer card and move your debt to it. Then, when there is no interest, or low interest, make extra on your payment and put a dent in it. The big secret is to pay more than the minimum. If you only pay the minimum, very little of your payment actually goes to reducing your debt. You have to cut corners anywhere you can and put the extra money towards your debt.

I should also add that you should never ever go the Campfire Classified Adds. That page takes all my spare money. I find that I have more cash in my pocket if I dont go there! Bet I am not the only one either.

Write down all your unsecured debt and monthly payments and select the one you owe and pay the LEAST. Double up (or as much as you can afford) on that payment only until you pay it off. Then pick the next lowest one and attack it the same way and so on. It's going to be TOUGH. While you are doing this, DO NOT incur any more debt and cut down to bare minimum all your discretionary spending (like Cable TV, dinners out, movies, etc). It's hard but it can be done. Good luck. jorge

I only go to the Classifieds here to sell, LOL. Which then I send the money to the credit cards.

I have six credit cards, of which three are paid off, and unused. Two have balances but are not in my wallet. One I use and pay off each month.

I always pay more than the minimum...The problem becomes that on the income I have, things like gas, etc., being more expensive, really impact me.

I drive a car that gets 30mpg average, however, I still have to fill up regularly.

I had a job teaching that paid $40k per year, but after you took out all the state-mandated retirement funding, I brought home no more in net pay than I do selling furnaces now. I quit that job because it wasn't worth the hassle.

I've been spending more than normal this year as I've gotten back into guns and hunting after a few years off doing other stuff.

you need a 'money makeover', a la Dave Ramsay. You are spending too much, have too many toys, eat out too much or a combination of the above.
Cut spending to the bone, get a second job, pay everything you can on the bills, and double up when possible on the mortgage payment.
Before you know it, you will be debt free, like me

There is no magic way out. Chip, chip away at it and I wouldn't use a single card.

I'd also limit the amount of cash you keep in your pocket.

Marry my wife! She won't let you spend!

On the other hand, I actually know someone who had to do what you are doing. They took a part time job and devoted the entire pay check to getting out of debt! The extra hours sucked, but so did putting off some of the gun buying, gun magazines, ammunition, hunting trips, extra cable channels, high speed internet, extra cell phones, and every other thing that one doesn't need but convinces themselves they do.

Dan

All the cards that are paid off cut them up and cancel the accounts. Keep one for emergencies with the highest credit limit or the one that's an Airline card you can use it if the purchase will literally save your life or a family members.

Dave Ramsey has an excellent program for eliminating debt. It's similar to what Jorge proposed except for 1 thing. He lines up your debts in order of interest rate instead of amount owed. Get rid of the highest interest 1st.

I have been basically following the Ramsey system, paying off the card with highest interest rate first, typically doubling min. payment, and shelving the cards after I pay them off.

I haven't cancelled any yet but I've read conflicting stories: Some sides say to keep the paid-off cards open, as it increases your credit limit which helps your credit score. Others say cancel them as it makes your debt to income ratio lower.

I looked at Dave Ramsey's site but only found the basics there available without paying for anything...Which I am trying to avoid!

Thanks for the advice so far.

And one solution I've seen used was to take that card and freeze it in a block of ice. It's still useable but takes some planning

As mentioned earlier, both you and the wife get a second job, it won't take all that long to get your head above water. Do not try to settle with the CC Cos for a lesser amount, they will charge off the balance and damage your credit rating. Just take the above advice, cut everything to the bare minimum, get a 2nd job and you will be free in no time. It feels great when you are completely free of debt!

I might also try looking for a better job, the one I have has not turned out to be what they promised me. Been here almost a year and it's OK but it's certainly not what they made it out to be.

If that fails a second job is as close as my neighborhood shooting range...Talked to the owner today, I worked for him before part-time also.

Derek

Its simple as noted, pay them off as much as you can, while not spending any more. Get a second job if you have to for some time.

I wouldn't dump the cards, simply hold them in case they are ever needed, and thats locked up in a safe.

I've never paid a cent on interest, simply because we dont' use a card as a bank, if we don't have the money we dont' charge it. Believe it or not they actually pay me money.....

And dont' forget once you've learned the only way to use one, to use them on big purchases for the cash back. We just put grandmas funeral on ours....

Jeff

scan all the ads you get in the mail for credit card, pick one that has a low FIXED interest, not the ones that have no intrest for a year , because they will have a varaible intrest at the end of the year for up to 22%.

the fixed ones should be less than 6% annual and pay off all your hi interest cards and burn them. never use the CC any more for anything. if you say I will only use for emergencys you are only lying to yourself, don't even carry it.

I did get a basically free 20-gauge MEC shotgun reloader from my Cabela's card. That was nice.

I have been able to use them on occasion to help out family. Sister-in-law's car got t-boned by a red-light runner, insurance didn't pay enough for her to get something decent, so I made up the difference for her with one card, about $1500.00. That's all long since paid for. It was nice to use the low-interest balance check that I had received to help get her on her way to and from work and college again.

extra jobs, sell everything, pay 'em off smallest to largest and cancel the ones you have paid off! instead of using a card you pay off monthly, try using cash-makes you stop and think when you start the day with a $20 in the wallet and come home with nickles...

Dave

Unless he changed in the last year or two (I moved out of listening range of his show), I think you meant to say that he has you line up debts smallest-to-greatest, pay minimums on all but the little one, kill that one with every dollar you can squeeze out of yard sales and extra jobs, then move to the next biggest debt, and so on. He calls it "The Debt Snowball"- you start off slow but gather momentum (packing more snow each roll) as you go along, as you wipe out a bunch of pesky small debts, that frees up all the money you used to pay to put on the next largest debt.

People regularly call and argue that they should be paying off the highest interest rate debts 1st- to which he politely suggests that if you were doing math you wouldn't be in the mess you're in calling him for advice.

The theory behind smallest-to-largest is psychological, if you don't get some success soon, you get discouraged and quit. He says that "personal finance" is about 90% "personal" (behaviour), and 10% "finance" (the simple math of spending less than you make).