[mcmama]

Recently the news media cited a report that many of us are using credit cards for our basic needs - groceries, gas, etc. This can sure lead to a real pile up of debt if you don't pay it off quickly, or if you have an emergency.

What have you done to reduce or eliminate credit card debt that you have? Did you do balance transfers? Did you cash out savings to pay it off? Did you take a home equity line? And if you did those things, did you find that you were in debt again within another year or two?

We're not talking about fancy vacations, swimmin' pools, movie stars....We're talking the blowout at Sams club, filling up the tank, or paying a bill.

[babydawn]

For the first 5 years of my husband's and my marriage we owned our own business. There were times that we lived, bought the necessities, with credit cards, because we felt we had no other choice. That only led to further financial problems, but still at the end of the 4th year, we turned a profit and were very excited about the prospect of the next year, and finially being able to have some financial security. We did really well for the first 6 months. Then my husband went out of town for 2 weeks to see his family back east. All of the work that he had scheduled before he went, fell through after he got home, we found ourselves in the worse possible situation. We had tons of debt, not for frivolious things, but mostly things to keep our business running and to buy groceries, gas and what not. And now, we had no work. His was able to find a job elsewhere several months later and at the end of the fifth year, we dissolved our business. Durring the first year of being employed by another company, we were able to write to our creditors and they took a settlement for less than what we owed. I am not saying that this is an ideal situation for everyone, but for us, it allowed us to still pay back a portion of what we owed and to avoid filing for bankruptcy. That was 3 years ago, and although we are mending our credit now, and things are improving, I don't think I will ever have another credit card. If I can't pay for it with the money I have in my checking account, then I can learn to do without. As for emergencies, that's what savings accounts are for.

[cocotbo]

Originally Posted by mcmama

Recently the news media cited a report that many of us are using credit cards for our basic needs - groceries, gas, etc. This can sure lead to a real pile up of debt if you don't pay it off quickly, or if you have an emergency.

OK, we do this. Not because we don't budget enough cash for groceries and gas but because we have our credit cards registered with Upromise. (For most purchases you make on a credit card registered with Upromise, you get a percentage of the purchase back to either pay off student loans or place in a college savings account.) We are sure to budget enough cash for these purchases so that we can pay off the credit card charges as soon as we make them - generally electronically which saves us money on postage.

Originally Posted by mcmama

What have you done to reduce or eliminate credit card debt that you have? Did you do balance transfers? Did you cash out savings to pay it off? Did you take a home equity line? And if you did those things, did you find that you were in debt again within another year or two?

We got to a point where we decided to go with a debt management company. It worked out very well for us and helped us get a good financial grip early on in our lives together. We were completely clear of debt within 14 months and were able to begin investing in our IRAs and a college fund for our son. Instead of paying interest, we're earning it now.

[simplechic]

My husband and I have used the Thermometer Method of debt elimination. That is, after taking a total of our consumer debt, including credit cards and cars, we drew a big thermometer onto some poster board to show how much debt we owed. As we pay it down we color in the thermometer. We keep this poster up in our bedroom so we can always have the goal in mind of getting out of debt. We don't go out to dinner much, so our reward for paying off one entire bill (i.e.one car or credit card) is going out for dinner.
Also we've payed off higher-interest loans first. Actually, we got a new credit card that offered 0% interest on balance transfers. So, we ended up paying off our car loans first because those interest rates were higher than our credit card.

[shoshanna]

Debt management has helped us greatly too. We decided to go with one of the non-profit organizations (we chose A Safe Harbor). They have been absolutely wonderful! You send them all of your most recent statements and then they tell you how much you need to pay each month. For us, it cut our payments in half. They also can get your interest rates lowered and if you have any bills that are overdue they can often get the overdue or late fees removed. Harbor is by donation only. Our "suggested donation" was only $15/month, which we were happy to pay. We could have paid nothing, though. Using the Harbor program has been wonderful for us. It took off the pressure and we have been amazed at how quickly our balance has gone down. We still have a ways to go, but we know we will make it!

[MsB]

Originally Posted by mcmama

Recently the news media cited a report that many of us are using credit cards for our basic needs - groceries, gas, etc. This can sure lead to a real pile up of debt if you don't pay it off quickly, or if you have an emergency.

What have you done to reduce or eliminate credit card debt that you have? Did you do balance transfers? Did you cash out savings to pay it off? Did you take a home equity line? And if you did those things, did you find that you were in debt again within another year or two?

We're not talking about fancy vacations, swimmin' pools, movie stars....We're talking the blowout at Sams club, filling up the tank, or paying a bill.

To earn point on our American Express card. I write each purchase in my check book and reconcile the bill against my check register when it comes in. It is a bit more work but that way I have already set aside the full amount of the bill.

[echo68]

My husband and I just started a David Ramsey Financial Peace University Course and I'm liking it immensely. He believes that credit cards shouldn't be used at all. We have put up all our credit cards and have been paying cash. He's pretty matter of fact by saying if you can't afford to buy something...then you shouldn't be buying it. There are several steps in the program that I couldn't possibly explain here, but it's worth looking into if you want to get out of debt, stay out of debt and have 'financial freedom'. I'm feeling better about our future already!
As for getting out of debt he recommends paying off the smallest debt first while making at least your minimum payments to the other debts and then snowballing the payments you would have made to the debts you have paid off onto the next one in line.

[MissyChrissy]

Never use a credit card for things I can't pay off at the end of the month

[angelic_ky]

we don't own any credit cards; i was raised that if you can't buy it out of your savings then you will have to learn to live without it (or start saving for it), DH parents have around a dozen cards, owing money on all, so he refuses to be like that... we have talked about getting a credit card as sometimes you want something that can only be purchased with a visa or mastercard, but with the new debit accounts we think that's the better option however we haven't really worried about that either

[MissyChrissy]

Originally Posted by angelic_ky

we don't own any credit cards; i was raised that if you can't buy it out of your savings then you will have to learn to live without it (or start saving for it)

AMEN!

I HATE that they try to make you get a credit card, threatening you that your credit score won't be so great without one. I hate to say-I got a really good mortgage deal and I had NEVER owned a credit card in my life at the time. Nor had I ever had a car loan, student loan, or any other line of credit. The mortgage was my ONLY debt at the time.

Honestly, they should just get rid of credit cards & make everyone live in the present. If you can't afford it, don't buy it. If it's really an "emergency" get a signature loan! Or better yet-SAVE! That's easier to do if you don't feel compelled to have the best of the best, and the 1st one to have it at that.