Anyone else have a buttload of credit card debt?

[amyli]

I wish I could say how much we have but it's a lot. More than 30 grand.

I want to do consumer credit counseling so we can get a lower APR but DH says no because he wants to buy a home in a few years. I read that while your credit score goes down if you use credit counseling, it will go back up after 6 months. Is this true??

We are commited to being credit card debt free with the next home we buy. We have 7 people in a 1500 square foot home (no yard, either) and I need to move ASAP!

Thanks for any advice of BTDT!
Amy

[DCJenn]

Re: Anyone else have a buttload of credit card debt?

Most of us here have buttloads of one kind of debt or another.
We have a lot of credit card debt and it truly does suck the soul right out of you. We will be credit card debt free by the end of 2008. That's the goal anyway.

Jenn

(this of course assumes that the 100 year old house doesn't have any more internal organ problems like she's had over the last year)

[PrincessFiona]

Re: Anyone else have a buttload of credit card debt?

Amy,

Stay away from credit counseling. I'm sorry. I know that isn't what you want to hear. We had more cc debt than that at one point during training due to multiple international moves, etc.

Here's my advice, for what it is worth:

1. If your credit card interest rate is above 12%, consider a SunTrust physician loan and consolidate everything into one debt....and then tear up your cards. They will let you pay the interest only for the duratin of training plus up to 2 years or so.

2. Sit down and do a serious budget.....make sure you are paying all of your credit cards on time every month.....If you pay over the amount in any month, be sure to include a note to have the money paid towards the principle and not interest, etc.

There is no easy way out...but you can get it under control in a quicker amount of time than you think.

We actually considered bankruptcy at one point during fellowship....and then we made a serious plan and got it under control.

3. Pay cash everywhere you go (including the grocery store)

4. Try and put extra money towards your cc debt....even xmas or bday money if you get some.

5. Make some extra cash having a garage sale, selling some stuff that you don't use on ebay or at once upon a child etc and put it towards cc debt.

Do what you can to just take control now...even if it means foregoing vacations, morning Starbucks etc for awhile.

you can do it!

Kris

[GrayMatterWife]

Re: Anyone else have a buttload of credit card debt?

Amy,

Stay away from credit counseling. I'm sorry. I know that isn't what you want to hear. We had more cc debt than that at one point during training due to multiple international moves, etc.

Here's my advice, for what it is worth:

1. If your credit card interest rate is above 12%, consider a SunTrust physician loan and consolidate everything into one debt....and then tear up your cards. They will let you pay the interest only for the duratin of training plus up to 2 years or so.

2. Sit down and do a serious budget.....make sure you are paying all of your credit cards on time every month.....If you pay over the amount in any month, be sure to include a note to have the money paid towards the principle and not interest, etc.

There is no easy way out...but you can get it under control in a quicker amount of time than you think.

We actually considered bankruptcy at one point during fellowship....and then we made a serious plan and got it under control.

3. Pay cash everywhere you go (including the grocery store)

4. Try and put extra money towards your cc debt....even xmas or bday money if you get some.

5. Make some extra cash having a garage sale, selling some stuff that you don't use on ebay or at once upon a child etc and put it towards cc debt.

Do what you can to just take control now...even if it means foregoing vacations, morning Starbucks etc for awhile.

you can do it!

Kris

SMART SMART SMART SMART SMART SMART advice!!!!!!!!

The only thing I might add is, go beyond just tearing up your credit cards. Cancel the accounts, and follow up with the three major credit agencies to confirm with their records that the accounts appear as "closed" on your credit reports.

--Abigail, a bankruptcy law clerk who deals with financially distressed, ordinary families EVERY DAY. (I may not know much, but I know about how crippling consumer debt can be--I see it day in and day out. Kris has given you solid advice!!)

Re: Anyone else have a buttload of credit card debt?

Here is a link to a Motley Fool article about reducing credit card debt:

http://www.fool.com/ccc/debt/debt03.htm

My MIL did use a consumer counseling organization and it saved her from what probably would have been bankruptcy or at least greater problems than she already faced. BUT (!!!!) I know that some of the "consumer" agencies are not acting on behalf of the consumer at all so if you go that route choose carefully. She did not have her new negotiated payment taken out of her wages -- I know that is an important point. Also, she was not able to use her credit cards any more and she had to make that new payment on time every month without fail otherwise every card would go back to the previous terms. Given the situation she was in, it was the best solution for her but might not be the best solution for you. I would suggest trying everything else first.

After DH took over her finances and paid off the total credit balance she did get a home loan at a reasonable rate a few months later.

[DCJenn]

Re: Anyone else have a buttload of credit card debt?

The only suggestion I have is to not close the credit account you have had the longest. Mortgage companies look at length of time that you have maintained open accounts.

Jenn

[PrincessFiona]

Re: Anyone else have a buttload of credit card debt?

We were told that keeping a card or two with a low balance/no balance was a good thing.....and to not cancel all of the cards.

Re: Anyone else have a buttload of credit card debt?

I'll just answer the intial question and say YES. We just paid it all off, but we're 2.5 years out of training, and actually cashed out dh's 403B to make it happen.

You are not alone. Kris & everyone gave good advice.

And your credit rating will NOT go back up in 6 months. That is a lie.

Re: Anyone else have a buttload of credit card debt?

I want to come back and add -- mil got a decent loan but that was probably due in part to having such a large down payment. DH used the proceeds from a house sale to pay off the CC debt and then put more of that down on her house. She was able to get a loan through a credit union (and held by the credit union) that wasn't one of the loans that is sold through a mortgage pool...or something like that. Probably not the common experience.

[amyli]

Re: Anyone else have a buttload of credit card debt?

(this of course assumes that the 100 year old house doesn't have any more internal organ problems like she's had over the last year)

Our house was built in 1917 and I know what you're talking about! In Octber we had to replace our bathroom plumbing. Four grand, and we still haven't gotten new subflooring.

[amyli]

Re: Anyone else have a buttload of credit card debt?

1. If your credit card interest rate is above 12%, consider a SunTrust physician loan and consolidate everything into one debt...

Kris

What did you put up for collateral? All we have is our house and we don't feel comforable using that.

[amyli]

Re: Anyone else have a buttload of credit card debt?

nak-nursing at keyboard

Thank you for everyone's advice!!

[GreyhoundsRUs]

Re: Anyone else have a buttload of credit card debt?

Kris[/quote]

SMART SMART SMART SMART SMART SMART advice!!!!!!!!

The only thing I might add is, go beyond just tearing up your credit cards. Cancel the accounts, and follow up with the three major credit agencies to confirm with their records that the accounts appear as "closed" on your credit reports.

[/quote]

I thought that this was a good idea as well, however, your credit score, amongst other things, is made up of a ratio of credit used to available credit, so leave at least one card open. I know it really sucks...I had the "credit cards aren't real money" mindset in college and a bit after - got me in HEAPS of trouble! I know that's not why you (or I) go into CC debt now - but it sucks just the same paying! Just don't "overpay" the cards and then run out of cash at the end of the month!

[PrincessFiona]

Re: Anyone else have a buttload of credit card debt?

What did you put up for collateral? All we have is our house and we don't feel comforable using that.

Amy,

SunTrust gives loans w/o collateral to docs in training based on their year of training...They let you pay interest only on the amount until a year or 2 after you finish up so that you can get financial solid footing. We're 7 years out and...we make our last SunTrust payment next month.....SunTrust saved our butts.

Kris

[MDPhDWife]

Re: Anyone else have a buttload of credit card debt?

I would recommend reading Dave Ramsey's Total Money Makeover book. It is inspiring and gives you an actual plan on how to tackle your debt.

Dave Ramsey also has a show on the Fox business network that airs nightly and a radio show you may be able to get.

http://www.daveramsey.com