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).

Don't cancel cards, pay off and hold with zero balance---all affects credit rating, canceling actually damages fico score. Then use them once in a while, as long as you pay entire bal at eom.I now only use cards for convenience, never buy anything you dont have the cash on hand to pay off at eom, as others pointed out before. BTW, I used to work in the CC/Mortgage industry for 15+ yrs, know it can be difficult to get out of debt, but have some discipline and you WILL be successful.

That was what I was told although I've heard conflicting info on that. Some articles say it's better not to have the potential debt vs. your credit, others say it hurts your credit rating to cancel them.

I've even heard that it's better to let them run out due to inactivity than to cancel them...Don't know if that's true or not.

Derek

Having too much debt is worse.

I went to the bank 15-20 years ago, borrowed enough to pay it off and canceled the account. Got a debit card from the bank so there is no credit to lean on. Surprising how much stuff you don't need if you know you have to pay for it right then. These days I do have a Cabela's card but it only gets used on trips and I've never carried a balance. It gets payed usually before the bill gets here. I've only got $53 built up in credit on the account in the last 3 years, maybe I need to use it more often.

Yes sir, cash is king. If I can't do it with green, a check or my debit card I don't get it.

All this crap is the reason why I never spend more on the card than what I can pay off completley at the end of the month.

I have enough problems,last thing I need is debt.

WB.

My wife and I pay all our weekly expenses on one set of cards. We pay it off in full every month so there are no interest charges. We've been doing this for over five years. In that time, we've gotten $1000 in Shell gas cards and three round trip air fares totalling nearly $1500. These cards have payed us! On the other hand, we have the spending discipline to pay them to zero every month!

Having a card that pays is great. Not having the discipline to control spending is bad. Ummmmm I wonder if Congress is listening?

Dan

DO NOT CANCEL the credit cards as it will negatively impact your credit rating. Just don't use them. jorge

Fortunately I won't fly for vacations.

If your worried about your credit rating your already in trouble.....get rid of the cards that were part of the problem.

There are 2 schools on paying down credit card debt.

The mathmatical formula calls for paying off the largest debt at the highest rate first.

The other school of thought says to pay off the smallest debt no matter the interest so that when you get it paid off you have a sense of accomplishment that you actually are getting somewhere, instead of paying off the biggest which might take years to pay off and you get discouraged.

Sell all the crap laying around your garage/house. I paid off my CC with Ebay's help. Examples being selling a $75 piano for $1200, sold some old vacuum tubes for $600. Stuff like that.

One man's trash is another man's treasure.

Nobody will ever turn you down for a purchase because your CASH RATING is too low lol.

I can see a future where your FICA (Credit score) just fades into a memory afte this last debt fiasco we are now working out of.

Go ahead and keep charging, if it gets too bad someone will bail you out; you can't take it with you....

Seriously, pay off as much as you can afford and whatever you do CHANGE YOUR LIFESTYLE!

I'm glad you are pursuing it with vigor....you are helping yourself and your neighbor. Good luck!

I have been looking a credit reports for almost 15 years now, do not ever cancel an account.

Almost 30 to 40 % of your credit score is the amount of credit available vs. credit used. I have seen certain people's credit swing by 30 to 40 points based on what part of the month you looked at their credit.

If you close the account it looks like you have less available credit.

That is why your credit score is always lower the first couple of months after you make a big ticket purchase (House, Car, Boat, etc.)

Pay the bare minimum on all but the highest interest card, which you should pay as much each month on as you possibly can. When that's paid off, do the same for the next highest interest rate card, and keep paying the minimum of the others. Follow that pattern. It's mathematically the most efficient way to pay them down. Good luck.

First study the card applications that come to your house. Grab one that has 0% interest, and NO TRANSFER FEES! Then transfer all your debt to this one card and close out any others.

When the bill comes look at the min payment, and then add at least $100 to it.

At about ten months start looking for another deal. I had to do it a few times when times were tough, but the key is finding the 5% that don't charge you the transfer fee.

Also never be late with a payment, this nullifies the 0% in addition to a hefty late fee.


If you stay diligent with it you can pay nothing but principle, the card companies are banking that you won't be. Good luck with it.

If you will get dead serious about working your ass off and selling everything you can along with an extra j-o-b or two, then pay 'em off smallest to largest reguardless of interest rate. Don't worry about surfing them to a lower or no interest offer in the mail. If you get serious about this you will be amazed at how fast you can kill 'em off, and the interest rate will not matter!! Pay cash for everything from here on out-don't play with a credit card to get airplane miles or a new toaster...you will find yourself justifying a purchase that you are on the fence about to get your "bonus". Studies show you spend MORE when you use credit...read on where at McDonalds if you pay cahs the avg is around $4, but CC users spent closer to $7...why do you think they all are making it easier to "swip the card in the drive through".

Cancel all your CC's after you pay them off-if you pay cash for everything you won't need a credit score...


Dave

And people are shocked when our world economy is crumbling now because we based it on selling stuff to people who couldn't afford it. Couldn't last forever. People are in love with their credit score all the way to bankrupcy.

Forget about your credit score. Get rid of your cards. Change your lifestyle.

We have never carried more than a gold card from the bank for emergencies, car rentals on occasion, internet purchases, and overdrafts (Thank You, debit card! (wife) - I hate the damned thing!!!!) ), and my wife has an airlines card which we use for air travel and large purchases which builds milage, which balance we try to keep low as it has a higher interest rate than the bank card. The "free" milage is great however!

Both currently have zero balances, thanks to recent Alaska Permanent Fund dividends. It pretty much took both of them.... all $6,000 or so.
Now then, about my garage construction....

Nothing wrong with credit cards, just keep them few, and use discipline on both ends of that smokin' plastic. Paid off at the end of every month is best, tho we don't often get there, quite.... We always pay more than minimums.

When the balance gets too big, it takes pain to make it go away- second jobs, no latte's, pizza, Blockbuster, simple, cheap home meals, combine trips to town, cheap wine, etc. Every little bit helps.

If you are semi-underwater, it makes sense to me to pick off the little debts first, paying only mins on the larger ones, regardless of interest rates. This frees up capital so you CAN effectively attack the larger ones over and above the mins. Plus of course the encouragement factor.

If you have any kind of credit history at all beyond credit cards, cut up the ones you have paid off ( you need not cancel them- just get rid of the temptation!), unless their convenience value exceeds the risk- but don't use them again until other debts are under control. Personally I don't see the value in securing credit ratings by having a dozen cards paying mins, over two paid off ones, and an up to date house mortgage/ rental agreement and car payments. (Ours are all paid off, except for the 2003 Dodge Ram 3500 with camper- but the rental apartment is handling that...) A couple good ahead-of-the curve references would seem to me to be as, or more, valuable than half a dozen liabilities that you are only paying minimums on on your credit rating.

Credit unions are often a better way to go than banks....

When we bought our house in '88, it was during a local recession- and we figured we could marginally handle it. We were counting on a 90 day closure because of our schedules- two weeks later the Credit Union told us- "go move in" - apparently our credit rating was PDG! It was a bitch!

We took it on a 30 year mortgage, paid down a bunch of % points (11 to 8, as I recall) with about $10,000 cash, over and above the minimum cash down price, set up a payment schedule of about $200 a month more, and paid it off in 15 years. Well, not quite, as we refinanced some years later at 6.5 %, and took 30,000 equity out to take care of some things, which still only extended our buy out time by 2 or 3 years, at the same payment rate. And we saved about $100,000 in interest (on a $105,000 home) payments over the 30 year mortgage plan.

The point is, don't over-extend yourself, and if you do, bite the bullet until it's under control.

A 30 year mortgage will cost you 3X the purchase price- by adding a few hundred a month, which goes directly to the principal - you can save a third, and be mortgage free in 15- but you still have the option of not paying that little bit extra should chit hit the fan and you need it.

Credit cards should be considered "4-wheel drive". Don't use it to get into trouble- use it to get out of trouble. Or, carefully, for convenience, assuming you can handle it.

1. stop using the card - cut it up or put it away for use only in emergencies [as in plane tickets to attend a funeral]
2. decide on an amount you can pay EVERY month on the balance.
3. make monthly payments.

you can undoubtedly do this, you just need to decide to do it.
good luck........

I don't consider funerals as emergencies. They're dead. Who are you impressing? I didn't go to my parents' funeral, as I was in Alaska, during semester finals, and they were in No Dak, after a train/car crash. As a PAYG college student, I was already in debt. I saw no point...

Better one show respect/caring while they are alive, than beggar oneself for the funeral. Medical situations, etc. are of course different.

YMMV.

Some excellent advice already offered.

The "chip, chip away at it" & "focus on the one with the smallest balance first, then the next, and so on", strategy does work if you seriously do want it to. As you pay each debt off it frees up more money to throw at the next one.

When you do get your debts paid off start putting some money aside for upkeep/emergency repairs to vehicles, home, appliances, etc., and do all you can to pay cash as you go. Life can/does sometimes throw some unpleasant surprises, but when you think about it many of them really aren't too much of a surprise at all.

When your goals are achieved and all are paid off you'll be pleasantly surprized by the amount of extra money you get to keep each month instead of sending it off to pay debts. Sorta like giving yourself a fairly healthy pay raise.

When we were in a major pickle ~10 years ago, we did as Jorge mentioned and got out from under $18,500 of credit card debt and a bunch of medical bills!! We made the list of what we were bring in and every expense going out. After that, we got rid of cable, never ate out (that helped a TON), and I sold almost every gun I owned. I'd drop your cell phone and if you want to let the wife have a cell phone for safety purposes, make it an "Emergency Plan". We made very small but regular payments on the med bills and paid of each of the small CCs first and after we killed those, I paid on the "Big 3" according to their interest rates (mins to the lower two and max payments to the highest % card). As others have mentioned, we now use a CC for the cash back bonus (BP gas is 5% off!!) but pay the balance in full every month.

For a few years now, I've been keeping a running budget on an Excel spreadsheet that I keep on a flash drive in my pocket(and backed up on my laptop). I update this spreadsheet every day M-F and, for us, it's been a vital part of staying ahead financially (just looking at it is the biggest benefit). It's nice to see how spending today will effect our finances a 1-2 years out and the Excel formulas take all the work out it! In the past, we'd be running along fine and then have something like a car break-down, car plates, X-mas/birthdays sneak up on us and we'd have to break out the CCs. I now have funds set up and pay them regularly so when stuff like car/home repairs, X-mas, kids activities, etc. come along, we're paying for them out of the fund instead of going into debt.

Best of luck - you'll be very glad you took financial control of your life so KEEP IT UP!!!

good advice all, but the one I like best is adding to your income.



don't know where you are located or what price structure is at the salon your wife works at, but if she's any good, she'd be making 40-60K working for us.

PM if you want details and are up for a move.

If you don't have any cc debt, you can do a few things. I set up a 2d checking account at my bank online. I use a Costco American Exp card because they have a pretty good cash back thing (since I have a Costco membership, this card has no other fees, unlike many AX cards). Whenever I use it, I immediately go online and transfer the charged amount from my checking to the 2d account. When the bill comes due, the money is sitting there, already deducted from my checking and ready to pay the card.

Again, the trick is discipline. You MUST cover the charge NOW, not next month. If you can't cover it, don't buy it.

You still have to fund your retirement.

Derek, there's plenty of good advice here BUT, DO NOT, ABSOLUTELY, CANCEL CREDIT CARDS you've had for over 1.5 - 2 years... keep those lines of credit open. Freeze the darn things is a block of ice and put them in the freezer if you must, but canceling lines of credit you've had open for years will harm your credit score. Your credit score is your friend. Leverage is essential when used wisely, and your worst enemy when used unwisely as you know.

yea, this credit thing has worked out well for him so far...

Dave

Dave Ramsey, as in daveramsey.com, is great advice. Credit cards are poison and I'd kill them all but one which would get locked up. Lot of good advice on this thread. The rest is up to you and your wife to make the committment on.

Spend less than you earn and life is grand. Increase earnings or decrease spending. Your choice.

Derek,

I didn't see this until now. But Steely has it right. It's baby steps. I got rid of all my cards, not just put them somewhere, I cut them up and threw them away. Pay a little at a time, after some time, they slowly start to fade, as does your interest, and you payments take bigger chunks out of principal.

It takes time and work, but you'll get it.

Another thing my wife and I did was make a budget for each month. When you track you spending, it's amazing what you can live without. It has been working well for us, we have more disposable income, and don't really miss the stuff we "had" to have.

Good luck.

I note you posted that you were a teacher. In my area,Northern Va., many of my retired friends(I can't afford to retire) gain good income as a tutor. Many were not teachers, some were, but most specialize in a specific subject area. Typically, math English, history, etc. In addition to word of mouth they post at grocery stores, local newspapers, & even use hand outs at kids sports fields. Hand outs at sports fields has been very effective for them. Good luck.

And...if you get out free and clear...DON'T LEND MONEY TO RELATIVES! You'll be put on the bottom of the list. Ask if they might consider giving you a payment ocasionally and you'll become an instant A$$HOLE! Once..my brother-in-law was jailed on drug related charges. He wanted us to bail him out. I suggested he get in touch with a bail bondsman and maybe put his home up for security. I was labelled a PRICK by my-sister-in-law. It's funny when a relative who drives a better car, has a more expensive home, takes frequent vacations, etc., tries to put the bite on you.

If and when we use our credit cards the balance is immediately paid off. We have a car payment and utilities. Took a long time to get there...second jobs, etc. but it can be done.

+1,000
Been there done that have the T shirt.
The warm fuzzy feeling of helping someone supposedly better off than you and then being forgotten when times get better wears off fast!
Doug

Very true. I lent my brother some money once, with his promise that he'd pay it off within a few weeks. Few weeks past, and nothing. Every time I approached him on it, he'd say he'll pay back when he can, and become annoyed. When you have no leverage, you are on the bottom of the pay back list. It only causes family strife.

It's about impossible to get by with out at least one credit card because just about every gas station in the world requires you to prepay at the pump.

I use my Cabelas card to buy gas. Very soon high gas prices are going to get me a free scope. My wife uses hers to get free lodging at the Days Inn chain - we haven't paid for a motel room in years. A co-worker uses a credit card that builds frequent flyer miles to pay for everything, mortgage, groceries, utility bills, etc. He just flew his family to the Dominican Republic -free. The deal is you PAY IT OFF EVERY MONTH.

One delightful evening I called every company but two and cancelled their cards. That's when I found out they have a stop loss manager and their credit rates will drop from 29% to 5%. You can get 0% for a year.

On average it took me about 10 min. to listen to their speel before getting the card cancelled. With one exception. When I cancelled my CITGO card it went like this:

" I'd like to cancell my card."
" May I ask why ?"
" Your company is owned by a crackpot South American dictator who hates us."
" Your card has been cancelled, Sir."

Did cancelling my cards hurt my credit? Dunno, don't care. Still get 5 or 6 "You've been pre-approved for our credit card" letters every week.

O

Some good advice here.
So good it's a shame some of you guys aren't heading to Congress to get this nation straightened out.
As we all know the current blue suits are killing us!!!!

Just curious about something that keeps getting mentioned.
Why does cancelling a cc that no longer carries a balance hurt your credit??
I was fortunate to pay off my home last year and my truck the year before that and was actually contemplating getting rid of three of the four cc's i currently own.
Now i dunno??
Explain please.

That is absolutely rediculous advice. If I were you, I'd first of all get a 2nd job and apply all of that to the credit card debt, after having destroyed all of my credit cards (debit cards are) OK. I'd pay cash for everything, make a written budget, and have the discipline to stick to it.

The way I understand it, it's about your debt to income ratio, and the percentage of your available credit.

Say you had $10,000 total limit in four credit cards. You have one card run up to $2,000 but the banks can see that you have $8,000 available credit. Your percentage of credit available to credit used is 80%/20% or 4:1.

Now, if you cancel three of those cards, you have $2500 credit, and you have the same $2,000 charged. Your credit is now almost 1:1 which is bad, because you have almost maxed your available credit.

I've heard it explained also that a card is considered negative to your credit when the total balance at time of checking is over 50%. It's considered "maxed out."

So if you have $2,000 spread across all four of those original credit cards in $500 chunks, you look much better than if you have one card with $2500 available and $2000 charged.

Make any sense?

Texas Hunter - I was just going to ask the same question.. When I got divorced most of the cards the ex used were in my name so I got to pay off the balances.. Back then the card companies offered 0% for 6 to 12 months so I just kept transfering the balances to another 0% card and used the money from a second job to pay off the balance... Took me 3 years to get it done.. Never Again..

If your goal is to qualify for more debt, then by all means chase the credit score. If however your goal is to be debt free, and you already have a mortgage, then credit cards be damned, pay em off and tear em up.

If I'd had a bit more financial savy and self control I'd be a very different predicament financially. We're down to one cc, and hopefully will have it paid off by year end.

The only reason I want to keep a good credit score is that we will either be building a bigger house/adding on, or will be moving upstate to get a larger house cheaper, so I want to stay in the good graces of the banks.

I tear up all of the "credit card offers" that come my way in the mail.

I can assure you, if you're out of debt and have a good income, you can get all the credit you need, period.

Canceling long-established lines of credit can really screw up your credit score. I'm a Mortgage Broker... I pull and look at credit reports for a living. More than once I've seen someone get the brilliant idea to cancel all their credit cards and the dip their credit took put them out of the range for a conforming loan.

As I said, keep one or two of the longest held cards. Freeze them in a freaking block of ice and put them in the freezer. Cancel the rest if you must, but don't put your credit more in the sheitter than it already may be.

No. 1, DON'T be 30 days late on anything!

But you're obviously an expert...

How to pay down credit card debt effectively?
+++++++++++++++++++++++++++++++++++

Get a card in your ex's name!

Well, there is that too but paybacks can be deadly...

Brad,

if all you use is a credit score to approve or reject a loan app, then you are doing your clients a disservice....

let's say I am a millionare x 2, but I have not borrowed money in the last 10 years, and have no credit cards. What would my credit score look like? probably close to zero. Would you loan me 100k to re-model my kids house? If all you did was base it on my credit score, then I would get no loan. Is this a smart business practice on your end? I'm just saying...

Dave

Dave, my "end" has nothing whatsoever to do with it... it has everything to do with the Lenders Criteria.

We live in a world of credit... wise people use credit, but use it wisely.

I've never claimed to be an expert, but I don't live in a credit world because I don't owe anyone a dime, I don't use credit cards, and I can still get my hand on an awful lot of money if I ever chose to borrow (which I don't).

Credit isn't all about credit cards. Regardless of how a few people feel, some of us may want to buy a bigger house, buy a 2nd home, buy property, etc in the future and a high credit score can make that way easier and cheaper. Not to mention credit score affects things besides borrowing money. When I was shopping for boat insurance last year a LOT of companies took credit score into account. Not sure I understand the logic of that or agree with it but thats the way it is. To say you'll never need credit in your lifetime is pretty naieve IMO.

A lot of places are also starting to check credit scores as a condition of employment, which I think is wrong, but it's a fact.

No, you're not an expert obviously.

You do live in a credit world, you just don't participate. Your ability to access cash to finance anything and everything puts you in a VERY tiny minority of people on the entire planet. Count yourself very fortunate.

You got that right.

About 15 years ago, I when out on a Tuna boat, in my pocket I had an AMEX card, before I left to go fly I paid the bill in full as per tradition when you have an AMEX card, I charged a lunch it was not on the bill when I paid it an I forgot about it. It was 6.75 cents. When I got stuck on Gualalcanal, my card was no good because of the 6.75 outstanding unpaid charge. So much about don leave home with out it, I was able to secure transport another way, and when I go home I canceled the account. I was at the time a card member in good standing for 24 years. They called me once a week for the next six years asking if I would come back. I got rid of all the others as well. If it hurt my credit rating, I would not know I don't borrow nothing, and have not done so since 1998. Yea right now I do have a little cash flow problem,with being out of work, but this is a short term problem. I was dumb enough to use a payday loan once and that was enough. I should be all caught up by Mid Jan if not sooner, once I start getting paid for my services in my new gig. I was sold the bill of goods that you build credit with cards and its a good thing to have, well I learned that the whole thing about Credit Cards is to get you into debt, with a small amount of money and you stay there for 20 or 30 years paying interest. Its a stupid thing to sign on for. About the only thing I would borrow money for is a car, my last car loan was in 1991 and well I am still driving the car, I may just buck up some and buy one out right when this one dies.

"Building Credit" with credit cards is a moot point. There are many ways to build credit, with a credit card waaaay down on the list of ways to build it.

My point is canceling a long-held credit card is an excellent way to harm your credit if you're on the bubble between good/bad credit.

If your credit score is 800 then cancel away... if it's 701 you'd be unwise to cancel cards.

It is going to be tough, but you need to take care of this and get out of debt. Good luck!

4 yrs ago I was in a similar boat, I'd always made decent money, but was widowed and broke from her spending, funeral, etc. When it looked like the present wife and I were going to make a go at it, she was shocked at my bills and the way I had ignored them. She set up a budget and asked "Who owes you money?" Turns out there was a big list, so she got on the phone and started collecting. She also asked what I could sell, so I went to a gun show, sold off a lot of good stuff, started selling vehicles. Astounded me what I could actually raise on short notice. She negotiated with the debtors, and the bills started going away. When I could see what she was accomplishing, it was easier to come up with more money. I started working almost as much in the off hours as the on, but when you have a goal and it is getting closer to reality, you get the burn!

The wife set up a 5-yr plan to be out of debt, at that time we owed on 3 houses. I also took a job with a 40% pay cut. In 3 1/2 yrs we were out of debt. We don't take credit for it, God blessed us, we just took advantage of it.

You can do it, too. The most crucial thing for us is it was a mutual goal. Go after it hard, make extra money any way you can and slam it on the small, high-intrest bills first. Talk with your wife about how it will be to be out of debt, visualise it, write your goals down and post it on the refrigerator.

If we (one awful smart motivated women & a meathead man not afraid to work) can do it why can't you?