The Credit Blogger

Hello-

Just wanted to post a quick update to myself basically keeping track of how well my credit card debt repayment is going.

My Discover card is getting closer and closer to being paid off and I’m starting to get excited at that prospect.  It has been too long since I have seen a zero balance on one of my credit cards.

I have $1865 remaining on my Discover Card.  Hopefully I can get it paid off by the end of the year.  I’ve been making around $600 in payments each month to it so in three months it should be GONE!!!

And then I can celebrate and go buy a brand new 100 inch big screen plasma LCD tv!  Don’t even know if they make those yet or if that’s even possible. )

After I pay off my Discover card I have a decision to make, I have 2 cards that each have about $10k on them, one with $14k and one with $16k.  Since both Bank of America and ATT Universal Card have both treated me badly either by trying to raise my interest rates or lowering my credit line even though I’ve made all my payments on time, I think I want to pay off those two first so they can stop earning so much interest off of me.

I’ll have a couple months to figure that out, first things first, get the Discover Card paid off!

Here’s my balances:

Discover: $1865

USAA: $10071 – Been using it a little which is why it has not gone down.  Slap my hand.

ATT: $10683

Chase: $14776

Bank of America: $16759

Total Credit Card debt as of September 2008: $54,154

I’ve paid off $7970 since Feb 2008.

That’s all for now.

-Adam

The Credit Blogger

Hello-

When was the last time you really looked at your monthly credit card statement?  Do you know how much your balance is going down each month or is it even going down at all?

When you have over $50,000 in credit card, I imagine I am paying a ton in interest charges that I shouldn’t.  But what choice do I have?

Is bankruptcy really a choice?

There is debt settlement and debt negotiation but then I would not be able to use my cards anymore and my credit would get all screwed up just as much as if I did file bankruptcy.  But I digress.

The amount of money you pay in interest charges can get crazy.

You need to be aware of how much of your payments go to interest and how much go to lower your balance.  No one knows the value of compound interest as much as your credit card company.

They get to make interest off of the interest they are charging you when you fail to pay the balance each month.

And this just goes on and on for months and months and months until it becomes years and years and years.

Sigh.

That’s hundreds and thousands of dollars each year just basically washed down the drain that you’ll never see again.

How to minimize your interest charges?  Call your credit card company and ask, demand, plead, etc for a lower rate.  Check your credit report and see how many on time payments you have made in the past four years and point that out to your bank.

Show them how good of a customer you have been and ask them and then ask them again and then ask them even one more time to help you out and lower your APR.

My mom just told me about a $39 late fee she got charged on one of her statements because she didn’t get a bill when she switched over to paperless billing.  I told here to call them and have them waive that thing.  It was already 2 months later that I fould out about this.  I said it didn’t matter, you are a good customer and they should waive that fee.

She called and they didn’t hassle her at all and waived the late fee.

$39 saved and it took less than 5 minutes.

That’s the equivalent of earning $468 an hour!

When was the last time you made $468 an hour?  Make the calls and get the rates down.  There’s no need to pay the credit card company any more fees or high interest rates than they are already getting.

Now here’s the sick part that I didn’t want to see.  How much I am paying each month in interest charges.

Discover: $35 on $2345 balance.

Chase: $155 on $15121 balance.

Bank of America: $172 on $17176 balance.

ATT Universal Card: $120 on $11106 balance.

USAA: $104 on $9984 balance.

Total interest charges each month: Approx $586! #@#%#%!$@#%^&&*&*!

That’s a really nice car payment right there.

That’s also a decent sized mortgage payment right there.

How the hell did I ever get into this mess…

-Adam

Hell0-

The road to getting out of debt is not a short one when you owe over $50,000 worth of credit card debt.  Don’t you just wish you were a mega bank and you could just write down your debts when you make bad investments?

I wish I had that power.

I would write down a few thousand dollars worth of bad buys that I’ve made throughout the years.

Some people will think that bankruptcy is one of your biggest options when you owe so much money and you don’t even make that much in a year.  But for me, it’s more of a principle thing.  I spent the money, I made the good and bad decisions with the money I borrowed, so it’s my responsibility to pay off all the money I’ve borrowed and get out of debt.

Can you even compare the feelings of getting out of debt through hard work and being frugal versus getting out of debt using bankruptcy?

In one sense, you’ll feel total elation that you’ve climbed your way out of a huge hole and will have a tremendous sense of pride.  You’ll also have developed the financial habits that will lead to a very prosperous future.  You’ll be able to save money for retirement and for your kid’s college.

In the other sense, you might feel embarrassed that you had to file for bankruptcy.  You’ll struggle finding a job because your potential employer will be able to check your credit and see you have a bankruptcy.  You’ll struggle to buy a car or house because the lender will see you as a very bad risk.  This will go on for at least 7-10 years if not longer.

Don’t get me wrong, I have considered filing bankruptcy to just wipe out my credit card debts.

But for me, that’s not the best answer.  That would be the ultimate last solution.

There are plenty of other options available before bankruptcy is my choice.

There’s debt consolidation, debt negotiation and debt settlement.

Here’s my credit card debt as it stands now:

Discover $2696

USAA $9754

ATT$10856

Chase $14966

Bank of America $17154

So basically in a little over a month, I’ve reduced my credit card debt by about $1200.

I had a good month incomewise for the month of July so I’m looking forward to applying a good chunk of that to my Discover card so I can get that card paid off SOON!

I also had to divert almost $600 from credit card payments to help my girlfriend out with a dental surgery.  If not for that, my debt would have gone down by another $600.

I’m sure this happens to a lot of people out there, those unexpected expenses that take away from your debt repayments.

The key is to not let it get you sidetracked for too long.  Do what you have to do then get back to paying off your debts.

That’s all for now.

Thanks for reading.

Have a great day!

Adam – The Credit Blogger

Hello-

If you want to get out of credit card debt without using any type of debt relief program such as debt consolidation or debt negotiation you have to pay more than the minimum on your credit cards.

But you know this already right?

If you took the time to calculate your debt payoffs then you’ll understand why it is so important to pay off your debts quickly.  If you want to avoid paying thousands of dollars in interest charges to your credit card company you need to pay much more than the minimum.

I’ve been doing this a lot more lately.

When I get my Discover Card statement in the mail, the only transactions I see are my finance charges and several payments that I’ve made to them.

For the past 3 months, there has been at least 3 payments made for each month.  Two months also have me making 5 payments.  And the amounts I am paying are not huge either.

These are payments I made for the month of May for example:

$42.00

$46.61

$30.00

Those are the small ones, then there was a couple of bigger ones:

$130.00

and

$317.75

The minimum payment for May was only $76.  I paid over $567.  Hopefully, in just a few short months, I will finally get this card paid off once and for all.

Whenever you get any extra money I would suggest sending that to your credit card company before it has a chance to burn a hole in your pocket and get spent on another frivolous purchase.

When you keep hacking at your debts and making credit card payments several times a month, you always have the thought of getting out of debt in mind and it helps to control your spending in a way.

You get in a more frugal frame of mind which is required for paying off huge credit card bills.

If you need more tips on how to be frugal and reduce your spending, check out this post from Zen Habits that offers 50 tips for frugal living

Keep hacking away at your debts and we’ll talk soon.

Have a great day!

Adam – The Credit Blogger