how much credit card debt do you have?

amother

Tue, Apr 01 2014, 10:38 pm

we are a family of seven, and we currently are not making ends meet. My husband and I both have solid, stable jobs, however it still never seems to be enough. About 3 years ago we bought a house that needed renovations, which cost way more than we anticipated. We currently have $75,000 dollars in credit card debt that we are working on paying off. In the last 3 months I took all my credit cards out of my pocket book, and out of my husbands wallet and put them in a drawer, we haven't touched them, It has been a real struggle, even just getting groceries on the table, something always seems to come up (car fixings... school trips.... our urn broke, we needed a new one... etc...) and now before pesach, with new clothing season I am struggling....
So what I am curious about, is if this is a common phenomenon, putting things on the credit card, when you have no idea if and when you will pay for it...
and what is the average people have in credit card debt

Mimisinger

Tue, Apr 01 2014, 10:52 pm

Every financial adviser will tell you to cut up the credit cards, and cut corners everywhere else. The amount of interest that you pay on them is highway robbery. Do the absolute most bare minimum and keep it off the credit cards. You don't need new clothes for Pesach, etc. If you put them on a credit card, you will be paying for them long after they have been grown out of and you'll be paying double what you paid for them with interest.

So when you see a new dress on sale for $50, think of it as $100 and ask yourself if you'll still wear it 5, 10 years from now.

acccdac

Tue, Apr 01 2014, 11:08 pm

This is from Dave Ramsey.

You need to do a written budget.
Food, shelter, transportation, and utilities get paid.
After those 4 you save up $1000. That is used for emergencies (car needs a new belt, someone needs a root canal now and you don't have coverage).

Once you have your $1000. You start working with your full monthly budget. That means one category is CC payments. One category is school trips. When making the budget you would have sat down by Monday night the 31st and "spent" all the income for April on the paper.

Last days of April sit down and see if you followed through and if your assumptions were reality (may have put $3000 for food for the month - because of pesach and when you look at the end of the month you see you spent $5000).

If there isn't money to go into every category then you leave some blank, and you don't spend in that area.

After 3-4 months this will become easier.

amother

Tue, Apr 01 2014, 11:12 pm

Credit cards were a great way for us to postpone learning about bitachon. We pretended we were trusting in Hashem by putting it on the credit card even though we couldn't afford it, but really we were just procrastinating on learning that Hashem will provide us with our needs, and HE decides what those needs are.

If we don't have the money, and we still think we need it, we need to either make more effort physically, by trying to do another odd job (I.e. babysitting or other temp work) or selling something, or make more of a spiritual effort by doing mitzvos more carefully, davening for help, and generally improving our relationship with Hashem.

What was the epiphany here was that our effort doesn't necessarily have to be the METHOD Hashem will help us. For example, I babysat and made $15, and Hashem made a neighbor want to give away their old toddler bed which I would have otherwise needed to pay $100 for. I davened with more kavana, and the illness I thought I needed the vitamins for went away on its own. (Not these exact situations, but you get the idea.)

Oh, and sometimes accepting that Hashem can tell us NO. And He knows best.

(But we have $25,000 of debt from before we learned our lesson. Now we have no credit cards at all.)

amother

Tue, Apr 01 2014, 11:14 pm

We used to have $50,000 in CC debt. It was an insane way to live.
We spent money on real important things, but it was plastic money, in other words, money which we didn't have.
It was getting more pathetic by the day, and we saw that we must get out. Many a night, DH and I went to sleep crying.
These are the steps we took:

1. We closed every single CC account we owned.
2. We used cash only:
Every week my DH would withdraw his whole paycheck from the bank and divide it into spendings for the week. (tuition, grocery, bills, inc. small amounts each week to pay off CC bills, etc.)
There was no using money that we didn't have. If there was only $90 left for grocery, we only spent $90 on grocery that week. We ate bread all week. It didn't matter.

3. we borrowed from friends as much as we were able to, and paid off CC bills with that immediately, so interest wasn't so high.
We made an agreement with those people to return their money within a month, or year, etc, each one as to how long they agreed to lend the money for, interest free.
This way, we didn't have to pay so much extra on high interest rates. The CC bills were paid up quickly, and now we owed money to friends and family instead.

(DH and I have a very honest and clean reputation b"h)

It took about a year or two, but we paid back every dollar Baruch Hashem.
We are now completely debt free. My DH also took extra jobs here and there to fill in some extra money so we can pay debts.

It is now almost 5 years and we only spend cash, or debit card right out of our bank accounts.

CC debt accumulates so easily. Dont get caught in.
We always paid the full bill in the beginning, and promised we'llnnever charge the card any amount which we can't pay off. But it happened anyway.

amother

Tue, Apr 01 2014, 11:16 pm

Yada Yada Dave Ramsey

From where exactly should you pull the money?

From the air?

OP

I am the most responsible think ahead careful with my money person married to.....

whatever.

Our credit is KILLED.

We have [cringe sigh scream mope] about 30,000 debt on CC and 30 to people

I am a family of eight choking and working bitter hard

Hugs to you and good luck

I have no advice except to say I was told to pray

amother

Tue, Apr 01 2014, 11:27 pm

amother wrote:

I am the bitter sounding amother. sorry.

Can someone advise me how to close cc accounts.

Thanks for sharing your stories the amothers who were less emotional and more rational sounding than me

It's ok, this is how my DH and I sounded when we were still in debt.
Feels better to be debt free!
It seems impossible, but it's very possible.

doctorima

Wed, Apr 02 2014, 12:07 am

amother wrote:

I am the bitter sounding amother. sorry.

Can someone advise me how to close cc accounts.

Thanks for sharing your stories the amothers who were less emotional and more rational sounding than me

There should be a customer service number on the back of each card. Just call up and say that you want to cancel the card; it shouldn't take more than 5 minutes per card. Obviously you're still responsible for any outstanding balance you may have on the card.

amother

Wed, Apr 02 2014, 12:23 am

I am the amother above with the spiritual sounding post.

We also are a family of 8 KA"H. Sometimes things are tough, but the less I focus on the money or the things I think I need, the happier I am. I let DH do the bills because he gets less emotional about them, even though we accrue more fees - it's cheaper than a therapist for my anxiety!

I try to focus on WHAT DOES HASHEM WANT FROM ME?

One thing that really helped me, although it sounds silly, is that I fantasized what I would do if I had a million dollars. I "bought" the new furniture, "paid" the debts, chose the clothes, the jewelry, the shaitels, the house, the cars... and ran out of "money." I imagined what I would do if I had 10 million dollars. After all the tzedakah projects, savings for kids' tuitions and chasunas, I was still nervous about the "future."

Bottom line was that at the end of it all, I realized I would only feel secure if more money was constantly coming in. And that it would have to be A LOT of money to satisfy all of my desires/needs (high quality shoes, organic food, reliable car, appropriately sized house). And that I would only keep needing more.

So I reached "rock bottom" so to speak in my desires, and started realizing that it's Hashem's choice - to give me money for shoes and the ability to enjoy them, to give us a car and let it last for 3 years or have it break down after 3 months (this really happened), and that He's never let us down. We sometimes needed to accept help, but that was Hashem's way of giving us parnasa at that time.

We give tzedakah as much as we can, and although there are tough moments, we're living much better (when you factor in feelings etc.) than when we were using credit cards.

(Although I admit to still fantasizing periodically about my dream house - hey it's fun! Smile

)

amother

Wed, Apr 02 2014, 9:36 am

amother wrote:

I have no credit card debt. I pay it off each month. If we can't pay for it at the end of the month then we do without. I only put things in the cards for the points. There are many things that I used to think I need but I only wanted them. This is a much better way to live.

new amother here, I could havewriten this post exactly. BH we have no credit card debt, thanks to my dh's budgeting. before I got married I had made lots of mistakes and had credit card debt I couldn't pay for, but one day decided to stop using the cards and pay them off.

if you have an oursranding balance, call the credit card company and tell them you have been going through hard financial times and would like to work out a payment plan...even if it's only 10 dollars a week, get those payments in! or if you tell them you want to pay the full balance and would like a settlement amount you can pay much less than your balance. it may take some time being put "on hold" or transferred to many people but it's totally worth it! hatzlacha ladies!

amother

Wed, Apr 02 2014, 10:01 am

acccdac wrote:

Where does tuition come in? I pay in tuition each month as much as some of these categories combined (family of 5 children, $4k/month tuition)

amother

Wed, Apr 02 2014, 11:54 am

amother wrote:

I do the same, however I realize I end up spending more without realizing it. The value of the points earned end up being a wash after the extra things I buy each month. After reading this thread (thanks OP!!) I decided we are only using Debit Cards! We will earn less points, but will save in the long run.

amother

Wed, Apr 02 2014, 1:41 pm

amother wrote:

how do you just declare bankruptcy? also has it affected you in any way?

We contacted an attorney in our area that deals with bankruptcy. (Before this we went to a credit counselor to talk about consolidating/decrease our debt and we were recommended bankruptcy)

The attorney we worked with was amazing. We told them out situation. They took all our info and said it seemed we were eligible and started the paperwork. We could not have more than a certain amount of money in our bank account during the process. They asked about assetts (cars houses etc... you cant own new cars etc) It cost 1600 total attorney fees for us. We needed to pay about $60 more for required financial management classes. The process was very easy and painless and our attorneys were amazing throughout the process.

How it hurts us now. 6 months later
My husbands credit is 680. We can't get a mortgage for probably 4-5 years. We got credit card offers in the mail within weeks of it going through. We can't lease a car in the near future. Our car insurance rates went up slightly because of the credit dip.

It has only been good for us. We were paying $800/month to credit card that was mainly medical debt. And then going more into debt to pay for food etc because we needed to pay so much for card minimums. We can now meet our monthly living expenses and even save a little. We knew never in our life would we be able to pay off that debt. Now we have a saving plan to save for a house. We are living within our means. And we are so happy and more calm.

amother

Wed, Apr 02 2014, 2:03 pm

we have some debt not sure how much now since we just pad a good part with a tax return but we manage to almost never pay interest on our cards you can usually get 2 years no interest and then switch (to a new interest free card) or pay off I also had a ton of dental work done and thats all on dental creit card plan that we are slowly paying we also buguet and think before buying deff not fun but doable bigger shopping trips every few weeks =to less imposle food shopping we do use credit card for points dh get to go see his grandmother that way we took a small vac just me and dh and paid with points so it does help