I have credit card debt, and I need out!?
Hi, asking from Ontario, Canada. Due to being very generous with my friends, careless spending, lending out way too much money, and the cost of school, I am now up to my eyes in credit card debt (about $ 14,000 worth). I am much more responsible with my money now, and I can save money now that I got a full time job. I’m also now living on my own, and I am very responsible with how I spend my money. But, it will take [much] too long to pay off this debt, let alone make a dent in it. I also have about $ 5200 in student loans. I have *never* defaulted on a payment. Is there a way out that won’t be leaving me out [of cash for savings]? Can/does debt expire? What can I do? Fascinatingly enough, this is all on one credit card. I have a excellent enough credit score that I’ve been allowed a limit like this at the age of 21, but it is way too much money.Whatever you do, never go with one of those scam debt consolidation/negotiation companies. You pay and pay and they do nothing for you. Go to your local library or bookstore and get a book on debt. It will take you step by step on how to negotiate, lower rates, or reduce payments. Debt does not go away. In the US if you default it goes to collection and they harrass you for years even garnish your wages. During that time finding a job is hard since employers check. But, eventually after 7 years of it being in collection it can be removed. /
No, debt does not expire. If it did, MOST people would just not pay and let it expire. There are exactly two sides to the equation. Income and spending. You can take a second job and sell things for more income. You can probably cut spending somewhere if you try hard enough. Make minimum payments on all but the smallest debt. Place everything possible on he smallest. Once it is paid, add that payment to the next smallest debt. I single largest factor in getting out of debt is getting FED UP with being in debt. Someone once said your life will change when you are sick and tired of being sick and tired of your life.
No way out. You need to look at your overall situation and set a goal for yourself to pay a fixed amount each month. Keep in mind that your financial sitautoin will change over time and you will be able to modify the plot. I was once $ 30k in credit card debt. It’s all paid off and I am now driving a car I paid for with cash and working on my last debt…the mortgage.
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There is only one way to clear the debt, and that is to pay it all back.
It’s only on one card. First of all, look at the interest rate on that card, and then see if you can open a new card and transfer the balance to that card, to take advantage of a low interest rate on transfers.
Just doing that will reduce the amount of interest you’re accruing (although you have to be careful when the low rate expires, and you must not charge anything else to the card) which will help you pay it down. The lower the interest rate, the more of your payments will go towards the principle, instead of interest. That is what you want.
You should put a little money aside (about five hundred tops) for absolute emergencies. However, given the size of your debt, I would suggest that you pay it on the card instead, and then, in a legitimate emergency only, access the funds on the card.
Remember, even an extra dollar will put you in front.
This is the link to the Yahoo!7 Extra Repayments calculator.
http://au.pfinance.yahoo.com/calculators/extra-repay-simulator.html
You can use this tool to experiment with extra repayments on your loan. It will show you how even a small increase in your repayments can shave years off the debt.
For example, if you owe $ 14000, at 19% your repayments over ten years could be about $ 260 a month.
If you pay an extra $ 10 a month, that cuts eleven months off the debt. You’re ahead over $ 2000.
You’re stuck with the card and the debt, unless you apply for bankruptcy. Depending on your nation’s laws (I’m an Aussie, and our laws are different) you’d be committing financial suicide at your age to declare bankruptcy.
If you pay that debt back yourself, your credit will shine. You’ll have lenders throwing themselves at you like hookers on a St Kilda street corner. Just pay it back. Jeez, I have three times the amount you owe on my mortgage, and I’m paying it down in five years. I only have two to go.
Don’t have savings and the debt. Put all your extra cash on that debt and get rid of it quick smart. Set a goal to pay it off by a date, and then challenge yourself to do it. It’s the only way.
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