money for my life

Getting Help

Even though I am confident that any person can learn to deal with the credit card debt that they have, sometimes you need a little help. A year ago when I sat down and actually figured out the amount of money I owed and my minimum payments at that current rate, I was shocked when I saw that the figure was over $72,000. You would think that I would have a fancy car to show for that, or some great clothes, or pictures of some fantastic world-wide trips that I took…no, I still drove a used car with over 90,000 miles on it (and I still do drive that same car), my clothes were, at best, clothes that came from a mid-tier department store. What I did have, was debt. I was overwhelmed, as I am sure many people are. The worse that my credit score got, the more depressed I became. Sure, I started to receive the tons of email about “We Can Eliminate Your Debt, Legally” and “Need Credit Card Debt Help? We Are There“. Like an drowning man grasping for things to help him stay afloat in an instant, I poured through those e-mails hoping to find the instant cure for my problems.

Something to Look Out For

I finally settled on a company I felt that I could trust. Their website was seemingly legitimate, so I began to do a little more in-depth investigation. First I looked at their accreditations. Check. Then I looked at the Better Business Bureau website for any complaints against this company. Check. I “Googled” their name. Check. Everything seemed in order. I contacted them. I used them for about four months, but the more that I read in books, the more I became uneasy. First, they told me not to answer my phones or to talk to the credit card companies at all. They were going to handle it. I was to continue to make one monthly payment to them and they would set up a separate account through a third party from which the payments would be sent. They would take half of their fee out of the first four months payments ($2,800) and then they would put half of my payment into the third party account and when there was enough in there, they would negotiate with the credit card company. That was all good and well, but I didn’t really appreciate the fact that after six months, I had paid $4,200, but my credit card debt reduction was not happening. By this time, I realized that they were going to be doing for me what I was perfectly capable of myself. Needless to say, that was an expensive lesson using money that I didn’t really have in the first place. This will be continued. To learn more, click here or here.

As you will recall, yesterday I began talking about credit card debt elimination.  We left off with the suggestion of calling the credit cad company in regards to asking for relief.  Oftentimes, that is all that it takes is to ask.  There really is nothing to fear for asking for a lower interest rate (I have seen my initial interest rate on a certain, unnamed credit card) creep from the “teaser” rate of 0.00% to an astronomical 29.99%.  One could have a $1,000 balance which going from paying nothing for the convenience of paying with plastic to paying $24.99 per month for the same privilege, but only with the 29.99% interest charge.  Spread that out over a year, and that equates to $299.90 each year.  If it takes 10 years to finally get that balance to zero, it could potentially end up costing nearly $3,000.  Would you let somebody  “loan” you $1,000, but they wanted $4,000 in return?  I cannot imagine that you would. 

 

Having some sort of financial freedom boils down to saving money on things.  It all adds up.  Little by little, bit by bit, it accumulates until it is a seemingly insurmountable burden. One of the things that I learned after a few months with mint.com was that I was spending a percentage of my money on sodas at the gas station.  Sure, $1.28 a pop didn’t seem like much, but there were also accompanying occasional candy bars or snacks, but when I looked at the monthly summary, it was over $50.  (Over a period of a year it was $600).  I couldn’t imagine that if someone were to offer to sell me a card that allowed me to get a soda and some candy every work day for a year for $600, I would go for that offer.  (It gets worse if you were charging it to a credit card.) 

 

For credit card debt elimination, begin by asking for a lower rate.  The way that the economy is affecting everybody, credit card companies will be willing to keep you as a customer with a lower rate, after all, oatmeal is better than no meal.

 

For more, please visit http://www.money-for-my-life.com/.

As one who was/is riddled with the burden of credit card debt, I have often dreamt of the day (which is now approaching) that I will be able to eliminate credit card debt once and for all. What a rejoiceful day that will be! As I have often heard that “Rome wasn’t built in a day”, I realize that my enslavement to credit card debt will not happen in one fell swoop of somebody’s pen or a knock on my door from the Publisher’s Clearinghouse Prize Patrol. Just as I did not accumulate this mountain of credit card debt in one night (but, oh, how times does fly), I will not achieve credit card debt reduction in one night either.

One of the first things to do in this situation is to take the time to write all of your balances and corresponding annual percentage rates down in one place that can be eailty referenced (and updated as you progress). It will be a good idea to jot down the customer service telephone numbers as well. You will have to make some phone calls. Keep a firm voice and project that you are in control (because you are) of the situation and ask if the customer service representative will lower your interest rate. Remember, the credit card companies want to keep you ensnared, even if they perceive that they are receiving less money, it is still money (as it is said, “oatmeal is better than “no meal”). Do not be overwhelmed (and yes, I have asked myself “Can I Go To Jail For Credit Card Debt?”). This is a process that will get easier with time.

To learn more, visit http://www.money-for-my-life.com/.  More to be added later.

One of the things that really kept me from succeeding financially was a lack of budget. It wasn’t like the “old days” in which people played “beat the bank” with deposits and check writing (this is where you write a check on an account that doesn’t have the money in it at the time, but you know that you will be able to deposit into your account before the check that you wrote will go through the clearinghouse), but it was similar. I used my checking account to pay the major bills like rent/mortgage, utilities, car payments, etc., but nowhere did I have a written plan to ensure that I wasn’t living beyond my means. This lifestyle gives credence to the adage that if you fail to plan, you are planning to fail.

During my first round with credit card debt, I sought the help of Consumer Credit Counseling, a not-for-profit organization that negotiated terms with your credit cards. They would schedule an appointment with you for you to go over what you spend each month, and let me tell you, they were extremely thorough in expenses. When I had completed my survey of what I usually spent my money on, they worked with me to set up a budget. Included in that budget was an amount that I sent them each month to pay down my debt for me…more information can be found in future blogs.