CC trouble

christians1September 6, 2007

Hello, I have really got myself into trouble with credit cards. I have maxed out my visa which had a pretty high limit. The issue now is the minimum payment is killing me. Its around 560$ and about 250 is being taken for interest. This goes along with two other ones for stores a month 50$ minimum payments.

I am really struggling making ends meet and this payment is not helping. One good thing is my car will be paid off 5 months. Thant 330$ a month. Since I used all of my savings to make ends meet. I have applied for a HELOC. Its still in the process of being approved. This way I will have something for an emergency.

I have started this month to write down everything my family spends every day to see exactly where the money is going.

I guess my question is does anyone have any suggestions on how or what is the best way to pay off credit cards when you can only bearly make the minimum payments? Should I transfer my CC to a no APR one? If so, any suggestions on which ones have a no APR for say the first year or so?

Also, I want to get a part time job to help out, does anyone have any suggestions on that. I currently have a 9 Â 5 job and can do nights and weekends.


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A part time job is a good start. Do you like being around elderly people? There is a growing industry that provides non medical assistance to the elderly (light housekeeping, driving them to the doctor's office, walking the dog, that sort of thing). You need to be absolutely honest, reliable, and patient. The pay ranges, of course, (where I live the starting pay is about $9/hr).

There is a huge demand for these kinds of services in the evenings and esp on weekends.

If you are interested, google "eldercare" or look in the yellow pages for companies that provide these services.

    Bookmark   September 6, 2007 at 1:03PM
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How about security guard?

They usually work nights, weekends and holidays.

Also, in the one that I worked for (a national firm), if they called and asked whether I'd accept an assignment, I could turn them down without everyone getting their shirt-tails in a knot. Whereas with most employers, if you don't show up for work ... you're not there long.

My suggestion is that you go on bare-bones living standard for a time.

Try your best not only to make minimum payments, but some extra besides.

Do you know what interest rates you are paying on each of those cards?

Regular credit cards usually 15 - 18%, and sore-issued (that should be "store-issued" - but I thought the misprint too delicious to delete) cards about 25 - 28% annualized rate.

So in most cases it makes sense to pay down the store-issued cards first.

I don't like working for no pay ... which is what I'm really doing when a lot of my income is going to pay interest on loans.

Good wishes for figuring out ways to reduce this crushing load on your back.

Come back to talk to us about how things are going.

We want to help you learn how to, and work toward, becoming debt-free.

ole joyful

    Bookmark   September 6, 2007 at 1:36PM
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If you're like most people, you will find that your HELOC has a much lower interest rate than your credit cards. If that's true, then you should immediately use your HELOC to pay off all your credit-card balances, so as to minimize the amount of money you're paying in interest.

Next thing to do is cancel those credit cards, or at least stop charging more than you can pay off in full each month.

Finally, if you can set up an automatic repayment schedule for the HELOC, you won't have to think about it any more and it will eventually be paid off.

    Bookmark   September 6, 2007 at 2:10PM
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Some other suggestions: Consider sharing your home with a roommate, have a garage sale to raise some quick cash, do you have stuff that you no longer use, but has value? Consider selling it on Craigslist or Ebay. (Craigslist is free).

Are you making a car payment? Can you rideshare or take a bus (or walk or ride a bike) to work?

I know the interest rate for a HELOC is lower, BUT, unless you change the climate that got you into CC trouble, you could be in worse shape down the road.

    Bookmark   September 6, 2007 at 2:51PM
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Thanks for all of the great information. I know I have to be much more discaplined going forward.

How do I find out about Security guard or working with the elderly. Is there any type of placement service for these positions? I am on the East coast.


    Bookmark   September 6, 2007 at 4:25PM
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As far as eldercare, google "eldercare". It will bring up agencies - look as if you were looking for service to find agencies in your geographical area.

You can also go to the Senior's Choice (google it for the website).

Most of the agencies hire the aides as employees.

Or look in the yellow pages under "eldercare".

    Bookmark   September 6, 2007 at 4:36PM
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Also, call your credit card company and see if you can negotiate a lower interest rate. If not, transfer your balance to a lower rate card and let company #1 know that you'll do it. You may very well get a lower rate out of the call. If you call, ask specifically to speak with someone about rate adjustments - don't just talk to the first person you get on the line.

    Bookmark   September 6, 2007 at 8:12PM
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Chemocurl zn5b/6a Indiana

Its around 560$ and about 250 is being taken for interest.
Zowie! What rate are you paying anyway?

Do you have enough equity in your home to be able to pay all 3 off?

The amount owed or interest (or both) must really be high, to have such a payment.

I wish you well, and also suggest you talking to the cr cd co to get a better rate.


    Bookmark   September 7, 2007 at 12:43PM
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I've heard on the "Nightly Business Report" and from other sources that switching your CCs around for no/low APRs can negatively impact your credit score (if that makes any difference to you at this juncture). Think you'd do better going to the your CC companies directly and negotiating lower rates with them.

Despite having bought and sold homes over the years, the HELOC is something I'm not personally familiar with since the idea of it never came up with any of my transactions. What I know is from reading around these forums, etc. It's always a good idea to have a back up plan, but isn't a HELOC just another loan/line of credit to be paid back in the event it's used? It's obvious that the answer is yes, but in the case of the OP, couldn't it be digging the hole a little deeper by playing one against the other and taking on more potential debt even if the interest rate is slightly lower?

Debt is such a personal thing - until we all get stuck with the tab when there's a default. I'm sympathetic when health issues are involved, or through no fault of one's own not making a living wage, or events beyond one's control come into play. I'm not so sympathetic for runaway spending for all the latest gizmos and gotta haves. There's a life lesson in here - credit is a wonderful tool, but you're definitely going to have to change your habits and use it wisely. And it seems that you know this.

Don't know where you live, but as mentioned above, in-home caregiving is a burgeoning industry and would be something to investigate. Here, the going rate starts at about $12/hr. There are an awful lot of seniors who aren't ready for assisted living or long term care but could use some help that they're willing to pay for. Your local newspaper probably runs ads for these kinds of opportunities. And the phone book listing would be under Home Health Care and Services.

I wish you well.

    Bookmark   September 7, 2007 at 4:14PM
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Here's how it is:

If you gotitsup the credit card company will get nothing. And they want to get something; ultimately, they want to get paid in full.

Fair is fair; you charged way more than you could afford to pay for. You effectively "took a loan" from the CC company, but you didn't read the "terms" of the agreement very carefully. And, THAT'S why your interest rate is so high... how much is it? do you really know?

Get on the 'phone to the CC company and tell them you're struggling with your payments. You need to tell them the interest rate is killing you and making you fall farther behind. Negotiate a lower rate and come to a reasonable amount that you can pay monthly. AND THEN PAY THAT AMOUNT RELIGIOUSLY. Make sure the payment is on time and never miss a payment. You've essentially "blown it" with respect to any credibility you had about handling money wisely. And now the bill is due. You must accept that the monthly payment is going to be a LOAD and a hardship for many months to come. But if you want to bail yourself out and salvage your credit rating, this is what you must accept.

I know how harsh that sounds, but it's the reality check you need. It's called "penance".

Remember: the CC company wants to get paid, and they WILL NEGOTIATE interest rates to achieve that. But you have to be tough and you have to be HONEST. And you have to stick to the bargain you make.

Check out the Oprah Winfrey show... she did a whole thing on getting out of debt a year/two ago. It will really help you a lot!

    Bookmark   September 7, 2007 at 4:16PM
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Go to This site is a life saver. Mary Hart puts out a newsletter and writes books that are so easy to understand. She's like a personal friend. You will feel so releaved when you get into reading her stuff. She was $100,000. in debt at one time so she knows her stuff. She's walked in your shoes. She'll calm your fears and walk you through step by step. She'll also say - stop the hemorrhaging (spending). You will be okay. Finding this website was a God-send.

    Bookmark   September 16, 2007 at 10:42PM
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Before anything, cut up the card. If you have other cards, ideally they should all be cut up until you get your debt to a more comfortable level. At minimum, lock a credit card in a safe deposit box for emergency use only.
Yes, of course you should probably transfer to a no-APR card, but read the entire disclosure. Some will charge you retro interest if the debt is not paid off during the teaser period. Zero APR cards are harder to find today than a year ago, thanks to tighter lending standards. If you DO score a zero or low APR card, transfer the balance and CUT UP THE CARD. Do not make any purchases with it! Any payments will be applied to the zero-APR balance first, and you'll ring up interest on the purchases until the zero-APR balance is paid off. This is pretty much standard.
Keeping track of your expenses is very wise. I began doing this 10 years ago after going bankrupt. I was surprised to see that I was spending $400-500 per month eating out!
Of course, a part time job is a great idea. Any additional amount you can pay will save you $$$ in interest. Strive to cut all your expenses by at least 10% and put the savings toward the debt. Ditto for the extra $330 after your auto loan is paid.
As to the HELOC, you can get approved but strive not to use this to pay the credit card debt, tempting as it may be. CC debt is mostly unsecured, while the HELOC is secured through your home. Many people get into trouble this way, rolling credit card debt and even auto loans into mortgages, then losing their homes when CC debt is rung up again. Be careful, and you WILL succeed!
When you get through this, set up a savings account at a bank whose nearest branch is at least 25 miles away. Do not get an ATM card. Then, arrange payroll direct deposits (if possible) into the account for whatever amount you can afford. This will be true emergency money.

    Bookmark   September 17, 2007 at 11:42AM
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Here's another suggestion.

Check what rate of interest you're paying on the debt that you have.

Calculate the total amount of that interest that you're paying monthly.

For example, if you owe $10,000. at 24%, that's 2% per month, or $200.

Calculate the number of dollars per hour that you get paid, then deduct the rate of income tax that you pay, e.g. if your get paid $10.00 per hour and your tax rate is 25%, you have $7.50 per hour, after-tax.

Which means that you're working about 26 hours per month for nothing.

Well, not for nothing - but to pay off that heavy interest on the loan that you made ... because it was so easy??

Actually, not for nothing ... but because you were impatient ... couldn't wait to have stuff till you could afford to pay cash for it ... at the time.

When you want to use other people's money to buy stuff ...

... there's a price.

And you chose one of the highest priced systems to borrow from.

Learn about how money works.

It's an interesting hobby ... and it pays well!!!

ole joyful

    Bookmark   September 18, 2007 at 9:46PM
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alphacat: "If you're like most people, you will find that your HELOC has a much lower interest rate than your credit cards. If that's true, then you should immediately use your HELOC to pay off all your credit-card balances, so as to minimize the amount of money you're paying in interest."

I have to disagree in the strongest possible terms with this advice - - especially for this OP who is struggling to pay his or her bills. In the current scenario, if the OP's situation worsens and she is unable to pay her CC bills, they will take away her credit cards. Or, she can file for bankruptcy protection and have the debt wiped out (Chapter 7) or a payment schedule set up (Chapter 13).

If the OP trasfers the debt to a HELOC and can't make the payment, the OP could lose the whole house!

    Bookmark   October 6, 2007 at 10:43AM
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The answer to debt reduction is both simple and complicated.

The simple part - quit spending your money!! Put more toward paying your debt. Seriously, many people in major debt are paying for things they consider necessities, but are in fact luxuries. If you have 3 pairs of shoes that are functional, you donÂt need another pair even if they are "on sale".

Do you pay for cable or satellite TV? Luxury. You canÂt afford it. Cancel immediately. Get an $8.00 set of rabbit ears for the TV and watch what you can get for free. Do you pay for high-speed internet? Yes, itÂs nice, but you donÂt NEED it. Choose a cheaper option! Do you have a cell phone in addition to a land-line? Cell-phones are a luxury! Cancel it or your land-line.

Do you go out for fast food, or get food delivered? Luxury. Stop doing it. Cook  it tastes better, itÂs cheaper, and itÂs healthier. Yes, it takes more time. This is time well spent with your family, preparing meals together.

Do you go to StarbuckÂs or a similar coffee shop? Luxury. Stop immediately. Make coffee at home.

Are your children involved in too many after-school activities? These can be very expensive, and I would put some of them in the luxury category. One or two a week is OK, but if youÂre driving every single evening to some activity or class, you canÂt have family dinners. It may look like the "right" thing to do, but these activities, if carried to the extreme, drain a familyÂs resources. Over-scheduled kids mean outlays for uniforms, fuel expenses, fast food and take-out meal expenses, and then you also have the stressed kids, too.

Do try to renegotiate a lower rate with your credit card company. Most of them just want their money and will be willing to work with you. If you choose to do a balance transfer to a low-interest credit card, just make darned sure you read the fine print on the offer and never use that card for anything! If you do, youÂll be paying massive interest rates on both the transferred balance plus any new purchases. Which ever option you choose  quit using the credit card.

I donÂt mean to sound snarky, but you really need to look at where your money is going, and reevaluate every single expenditure. It's difficult to get out of this kind of debt, but it can be done.

    Bookmark   October 6, 2007 at 11:14PM
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I agree with every single thing that Mary C has said.

I work with a person who has never had 2 nickels to rub together but owns every "toy" known to man! Within a couple of months, the latest "toy" is largely unused and the cycle of poverty continues.

CHOICES! "need" or "want"? Take care of "need" and indulge "want" only after you have carefully considered the amount of money and time required to indulge it.

I am teased routinely for what many perceive as a spartan lifestyle. But I'm OK with the choices available to me and want for nothing. There's big money to be saved by "brown baggin' it" and cooking at home! ditto, plugging all electronics into a surge protector and TURNING THE WHOLE THING OFF when you're done with the electronics. All it takes is understanding and discipline. When you really think about it, how important are the little clocks and lights that are always "on" and drawing power? We cut our electric bill by nearly 50% by doing that; more to invest or more to spend on plant material, or a nice breakfast/lunch "out".

"Need" and "want"... it's EASY. It's about choosing!

    Bookmark   October 17, 2007 at 4:14PM
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Chelone, If I turn my PC off, will my cordless phone be hurt by not having it plugged in. It's a lot of work to rewire it every time I turn off the surge protector. I turn the PC off during a storm and don't worry about the phone, but don't know about vacations of 2 weeks.

    Bookmark   October 17, 2007 at 7:53PM
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Hi again Christians,

It's been almost a month and a half since you first wrote.

One thing that you mentioned was that you were writing down every cent that you were spending.

What results have you found from that?

Have you found some places where you can save a substantial amount by changing your habits rather slightly?

I hope so.

We certainly hope that you can avoid being thrown to the lions.

And are willing to offer what help we can to assist you in keeping that from happening.

When you use a store-issued card, they let you use $100.00 of their money.

And they charge you $28.00 per year rent.

Not my idea of a good time.

Good wishes in your task of cutting those expenses down to essentials, to free up more cash to pay down those hugely expensive loans.

ole joyful

    Bookmark   October 18, 2007 at 7:50PM
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I can't answer your question, Jonesy.

We have a regular old, rotary dial phone that is plugged into the wall near the kitchen. Works all the time, unless a downed tree limb breaks the line.

We have one of the cordless phones that requires power to run the answering machine and ISN'T plugged into the surge protection strip we use for the computer and stereo equipment. But it's still tapped into the telephone line that powers the old rotary dial model.

We turn off the electronics and the computers with the surge protection strips. we unplug the toaster and the coffee maker when they're not in use. Ditto any battery rechargers.

When we lose power we lose use of the cordless telephone (the answering machine requires electricity); my BIL has digital phone through his cable provider and he loses his phone every time the cable is out, but I'm not sure about power outages. My guess would be that those affect his telephone, too.

    Bookmark   October 20, 2007 at 11:58AM
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