Credit Cards VS Me (pay, debts, rate, deposit)

[tcb]

Okay I'm going to keep this simple.

I'm 24 I have more credit card debt than I'm proud of, I have a car payment and a house payment.

I want to get rid of all my credit card debt and I'm trying to figure out a good way to go about doing it. Are those consolidation loans a good thing?

I have made it a point to never use credit cards for necessaries but still they have ways of burning in my pockets, I have since locked all of them in a safe deposit box at the bank that requires 2 keys to get them out, so I really have to think before I can use them.

Right now I'm building up my savings a bit and paying double minimums on the 3 cards I do have, but at this rate it feels like it's going to take forever.

Any recommendations on where I should go from here would be greatly appreciated.

[LeafsFan85]

Obviously, getting a interest free loan from family is the best obtion. But if not possible i would take what ever cash or investment I have and cash them all out to pay off the credit card, If I still don't have enought i will talk to my bank to see if we can work out a personal line of credit or loan.
Credit cards interest are a lot higher than you investment and saving.

You shouldn't lock up your credit cards, you should cut them up, keep only three (Amex,Visa and Master).
Good Luck!

[Donn2390]

I had the same issue when I was your age. I went to the local bank for a consolidation loan. I was lucky, and the guy at the bank told me to not to get a loan, just tighten my belt, lose the cards, and sacrifice until it hurts, and pay off the cards. I followed his advice and got out of debt on my own and never looked back. Now I'm o;d and giv eout, never bought anything I couldn't pay cash for, and in retirement, I have all the money I can spend, all because I got good advice and followed it.
I now have one credit car. I pay for everything eith that card, I mean everything, and then I have one bill at the end of the month, which I pay in full.
The secret of using a credit card, don't buy anything you don't absoletly need. Some people go craze with a card, and buy stuff they don't need. If you can't handle it, don't even carry one.

[golfgod]

tcb wrote;

I never use credit cards for necessaries but still they have ways of burning in my pockets

In that case the consolidation loan will NOT work for you. Inside of a year your CC debt will be back, ON TOP of your consolidation loan.

I'd suggest you check out Dave Ramsey, he has several books, a website and a radio show. He's as fanatical about getting out of debt as I am. He'll walk you through it, without a CONsolidation (as he refers to them) loan.

Beware though, it's not painless. It'll require some hard work and sacrifice on your part. But look on the bright side, you're very young and you can handle the extra work without any difficulty.

His recommendations will run along the lines of;

sell the car, get a cheap one, you obviously can't afford this one

cut up the cards, shop the debt around to find a lower interest rate one,

get a second job,

but out all "frills"

It can be done. But most people don't want to do it.

golfgod

[bhcompy]

i went to my credit union and took out a signature loan for my debt. kept 1 card with a 500$ limit for necessities if im low on cash and put the rest in a deposit box to keep the credit lines open.

[tcb]

Thanks everyone for the advice.

My cards have not left the safe deposit box since they went in, everything I've brought for the past few weeks has been cash only.

[stacylee926]

I don't have alot of cc debt, but I had maxed out the few I had (lower limits). I would pay $40 and then charge it back .

About 4 months ago I decided to lower my balances so I started paying $100 mo on each and my balances have come down nicely. Or, take one or 2 cards and pay $100 ea on those only. Once you start seeing the balances sink lower it is a great feeling! Just tackle 1 or 2 at a time - focus on the higher interest cards first.

[sean98125]

Yep, listen to Dave Ramsey. You can also read some of the posts at The Simple Dollar

Ramsey's plan is essentially:

1. Save $1000 as an emergency fund. Put it in a place you can access it, but you can't access it easily enough to use it for anything other than emergencies. This is an emergency fund. Needing a trip or concert tickets or a pair of shoes is not an emergency.

2. List your debts smallest to largest. Start a debt snowball. Pay minimum balances on everything other than your smallest debt, and attack that debt with every extra penny you have. You don't go out to restaurants. You don't buy $4.00 cups of coffee. You attack your debt with a vengeance. When you smallest balance is paid off, do the same with the next smallest balance. Except this time, your making the minimum payment on that plus the amount you were putting toward the smallest debt. Keep working on this until your debts are paid off. The payments toward the last debt will be huge since you'll be paying the equivalent of the minimum payments for the previous debts.

An alternative is to pay off the card with the highest interest rates first. This will save you a few dollars, but it doesn't have the psychological boost that paying off the smallest debts quickly does.

Consolidation loans are pointless if you really want to attack your debt. Just pay off what you owe now. If you need to get a second job for a couple of months to boost the amount you can pay, do it. It's better to get the debt off your back now so you can start making your money work for you instead of the banks and credit card companies.

[tcb]

I'm going to start going against my highest interest card first and work my way down.

Thank You Everyone!

[Humanoid]

I don't think this "hide from credit" strategy works very well. Its like trying to diet by keeping all bad foods away from you. But sooner or later you will be exposed again to credit (or bad food). The real issue is you need to manage yourself better.