Wonder What to Do

Try watching CNBC. There is a great advice show at 8 pm. On The Money, I think. She answers people's questions if you call, email or text.

personal finance is a passion of mine and I spend alot of time reading about it and listening to radio programs. almost all financial experts will strongly warn against debt consolidation or borrowing to try to get out of debt, neither adresses the problem of changing your habits and usually people end up with more debt. And most experts say that debt cons ruin your credit anyway. Dave Ramsey is awesome and has 7 baby steps to follow and a radio program that I listen to every evening on 103.5 FM from 7-9 pm. He also has a great website daveramsey.com and a book called the total money makeover. He has free podcasts available on the internet and alot of people call in with their debt free stories in which they paid off 10s of thousands to 100s of thousands of dollars in debt following the baby steps and living on a "dreaded" budget. the plan is not a gimmick but education on changing your financial habits and takes months to years because you are actually getting to the root of the problem and not doing a bandaid like debt con or borrowing more money. I am also reading a book called All Your Worth and the principles they teach are very similar to Dave Ramsey. Trust me it can be different you don't have to live like this. We have no debt and our home is paid and we live on a budget that we do at the beginning of every month. It allows me to only work 34 hours a week and my husband to quit his job to stay home with our one year old. We don't have new stuff, drive cars that are 8 and 5 years old but we have freedom in our time and no stress about finances. I feel so passionate about this because I see how others struggle and their lives are being hijacked by finances when life can be so different with a plan and the belief that you can change things. email me if you want any more info. Good Luck ____@____.com

I wish I had the same thought years ago. I started listening to Dave Ramsey, go to www.daveramsey.com My new goal is no debt, and he's my inspiration. He'll also tell you how to work the "Debt Snowball", so you can start seeing movement on those evil cards!

RIght now, all I have is the house to pay off. Thanks to him :)

Pay the minimum on 4 of them and pick one (usually the highest interest rate) and pay that one off. If the one with the highest rate is also your biggest balance, then pick the one with the lowest balance to pay off - it will help to keep you on track if you can see that you are making progress somewhere. Once you have one paid off CUT IT UP! Then start on the next one. You cannot keep paying the minimum on all of them as you quite rightly noted, you will be doing that forever but you have to start throwing every bit of spare money you have on getting them paid of ONE AT A TIME. Put a budget together (I use an excel spreadsheet) to see what money you have coming in and what money you have to pay out (bills, motgage/rent, utilities, credit cards, groceries etc)anything else, eating out, entertainment, coffee, lunch, clothes hair etc etc need to be put on hold or drastically reduced. After you have one card paid off you can have a little celebration (cash not credit) then buckle down again until the next card is gone. You can do this, it takes some willpower in the short term (even if we are talking a couple of years) but you will feel a lot better in the long term.

Good luck (you may want to read the MSN Money message boards, the WOMEN IN RED have been finding different ways to get themselves out of debt and they celebrate and comiserate with each other)

Maybe you should consider paying off the store cards with the major credit card. This way, you'll only have one payment. :)

I'm no expert but we have watched the balances rise and find ourselves owing after years of 0 balances. We simply have had to stop using them, and use cash only. In short, live w/in our means. We're finally seeing progress but its slow and has taken giving up things we took for granted. I'd guess the interest rates on your store cards are very high, so getting a new card to pay off those (and then never use that card!) is something we did. I never go for the 15% off offer to sign up for their card in the store. The interest rate is usually a lot more than that so you don't really save anything if you ever carry a balance. These days it usually costs 3% to use a new card to consolidate, so you have to do the math to see if a different loan would work better. Most store cards are well over 15% so its better than that anyway. Sounds like the references you got are good ones. Good luck!

N., I have not done the debt consolidation, so I cannot give advice specifically on that, but I have done a debt management program, and I highly recommend that. We went thru the non-profit company called Green Path Debt solutions. I do not remember the exact website address, but if you google the title, it will come up. It sounds like we were in the same boat you are, and this company really helped us to pay down some of the balances on our credit cards. Give them a call, they do free consultations, even if you decide not to go with them. Good luck.

N. ~
First off, debt consolidation is a form of bankruptcy and will show negative on your credit report.

Store credit cards usually have a really high interest rate ~ over 20%. You need to get rid of them, transfer them to another card. Do you ever get any of those 0% offers in the mail? Those are great for transferring balances. Then close the store accounts. With the transfer card, make sure that it doesn't have an annual fee, and how long will it be 0%?

Also, don't pay the amount they ask for each month, pay more. For example, if they ask for $25, send them $125, that way you take more from the principal, instead of just paying the interest every month.

Do you pay them online? The payment gets there faster if you do. Make sure you avoid the late payment fee. Another thing you can do is make a payment every week (or two if that's when you get paid.) If they want $100, pay $25 each week. Once more, it takes down the principal faster and you get less interest.

good luck!
D.

If it was me I would go with debt consolidation. One payment seems more humane to me. But I don't know the ins and outs.

Go to the library and get "The Total Money Makeover" By: Dave Ramsey. It will tell you exactly what to do!