Hi everyone, I'm working to try to get my finances in order. About a year and a half ago my wife finally sold our house, and due to depreciation, a buyers market, and realtor fees, we ended up losing about $30,000. We had to move for our jobs, and we were just paying the mortgage on an empty house. There's other details involved, but the bottom line is we lost a ton of money on it. We had to put a good chunk of that on credit cards because no banks would issue us an unsecured loan. The house was our only collateral, and since we sold it, we obviously couldn't use it anymore. My wife's parents lent us some money, so it wasn't as bad as it could've been, but we still had to put some on our cards, which we really didn't want to do. We were doing good with making payments, but then my wife, who was a teacher, lost her job on the 2nd day of school back in September. She went about 6 weeks without working, and finally she found a part-time job which will hopefully go full time July 1st. In the mean time, we both teach online for the University of Phoenix, she supervises a student teacher for Walden University, and I picked up a course as an adjunct through the local community college. Even with the extra work, we're still struggling to make ends meet. We're basically breaking even. I'm trying to figure out how to handle my credit card debt. I've been monitoring my score on CreditKarma, and it's been going downhill since we sold our house. I was at myFico today, and one of their suggestions was to actually apply for a new credit card that offers a low transfer rate and transfer my balances. I'm not sure how I feel about that. I suppose if I could qualify for one it'd be okay, but wouldn't opening up another card hurt my score? Or will it be a wash if I can pay my debt down? What are the thoughts of the folks here? Surely there are some people "in the know" that might be able to shed some light on this for me, and I would greatly appreciate it! Thanks, Matt
Seriously, go to Hulu - Watch your favorites. Anytime. For free. and watch Dave Ramsey. It's free. (or you could watch him on TV but I don't know when he's on) He is alllllllll about how to get right side up. He isn't about investing- he isn't about stocks- he's about getting out of credit card and other debt. I know this is a public forum, so I won't get too personal, but we have used his "7 baby steps" and became debt free except for the house last year. You can do it! He has a website and book- we never bought any of that, he also has a class, we never attended - you can follow the suggestions easily on your own. In a nutshell, his suggestions that I found the most helpful through the years: beans and rice, rice and beans sell all your crap get another job you don't see the inside of a restaurant unless you're showing up for work sell more crap If you are going to bed from exhaustion every night you really won't miss not having entertainment *with 4 kids- of course we didn't cut out everything, but it's a lifestyle choice. STOP using credit cards. PERIOD. From this day forward. Cut them up. Lastly- debt snowball. Read about it, understand it, do it. We paid off around $75,000 in 3 years while earning about $45,00 per year. You can do it. It will be painful,but you can do it!
Thanks, Jennifer. I've been a fan of Suze Orman. I've read a few of her books, and I've been trying to follow them. The problem is that we keep getting screwed over. Yeah, we're trying to have an "emergency fund" but it's a little hard to build up when something else keeps happening. We really don't use our cards now, and we're just trying to pay them off. I called some of them today and asked if they'd lower my APR and they refused. It seems like since the gov't passed their credit card legislation last year, they've been even more of a pain in the neck to work with. I applied for a full-time history gig at one of the Virginia community colleges. If I get it, it'll be one heckuva pay raise and MUCH better benefits than I'm getting now. That would be a step in the right direction. Either way, I've realized teaching high school isn't for me. I like it, I do, but I've realized I can't be a good parent and a good teacher. One has to give, and I'll be damned if I put someone else's kid before mine. Call me selfish, but I don't want my kids to end up like some of the heathens I teach. -Matt
Jennifer's advice is very valid, and I agree wholeheartedly. However, if your concerns are more about salvaging credit score, then I can probably share some of my ill-gotten knowledge. The algorithms that drive credit score do not always make sense. Sometimes this works to the consumers disadvantage, sometimes vice versa. It sounds like you are probably carrying high balance-to-limit ratios on the cards. This hurts your score. You want low balances on high-limit cards to drive your score up. Additionally, too many separate like trade lines (read: credit cards) can drive your score down. So, if you have multiple credit cards and they are all close to balance, then that is one of the contributing factors that is leading to your fico declining. Consolidate some of the balances. Shop introductory offers. Many times you can find cards that offer a 6-month 0% or some other attractive offer. Consolidate. Jump to the next one. Keep the balls in the air. This method sucks, it's not fun, it's demeaning, and it's not right. However, it can help you keep your head above water until things improve. If the card you pay off doesn't cost you anything to carry a zero or negligible balance, then keep it open. If you pay off more than one, keep the one (or two) that has the highest limit and cancel the others. You don't want a ton of open accounts with zero balances. Pardon my indelicacy. Generally, the bureaus can smell a sinking ship. Based upon financial activity, balances, trade lines (credit cards, house, car, etc...), balance transfers, etc, they generally do a pretty good job of properly assessing an individual's risk for default. That's really all a fico score is: the level of risk attached to loaning somebody money. It is riskier to loan you money now that you are experiencing financial hardship than it was when you were on more solid ground. This is not a character judgment; it is simply a risk assessment. There are times that the system behaves irrationally; inanities occur. And, as stated above, there are some things you can do to influence the score. I've been where you are (not far from there right now), and I know it's not a lot of fun. Good luck! On another note, I'm curious about your experience teaching. As I am an aspiring teacher, remarks such as yours always make me wonder what the circumstances are that prompt such a reaction. I won't totally hijack your thread here, but I think I'm going to start a thread seeking opinions.
OMG Matt, you're not selfish- you might remember we already had that conversation when you guys were preggo with your first child. Seriously though, you can do it- it just takes patience and dedication. Make a WRITTEN budget and stick to it- every dollar has a name. Sometimes, you DO have enough money (not extra- but enough) and you can just wait it out. Tighter budget- nothing new, everything used. Think of it as a game, be creative. And, if I can be a little trite- you don't need a credit score unless you're seeking credit. The last thing someone in debt needs is more debt.
This is both true and not. Again, Jennifer, I agree with your principals 100%. However, a low (or nonexistent) FICO leads to higher insurance rates, higher utility rates, larger required deposits on many items, inability to secure apartments, and can have implications on one's ability to secure employment. Ramsey advocates a zero FICO, and I have to say that is a great goal (I hope to be there someday myself). But, one must acknowledge that a subprime credit score has more repercussions than an inability to secure credit. It is a lot easier to eat these ancillary increases in the cost of living if you are a multimillionaire with a radio show. Just ask Dave Ramsey.:tongue:
Ramsey is unrealistic, IMO. Having good credit is very helpful in many ways. I don't advocate the wanton use of credit, but the appropriate use of credit can be beneficial.
Matt's drowning, that's not "beneficial" to his FICO score. Also, not debating what Ramsey's credit score is- don't care. Matt needs to get right side up- then he can worry about the rest of it later when he has time to breath. Philosophy on how to run one's financial life is for another day. Today- tighten expenses to the minimum, 86 the cards, get a debt snowball rolling and get another source of income. Pay for groceries, keep the lights on, and buy that baby diapers. Get on track then figure out which guru to follow.
We did the Ramsey program a few years ago and got rid of a ton of Credit card debt but we didn't follow his plan 100%. It worth getting his book and start attacking the debt but we didn't get rid of all our credit cards like he tells you to and we didn't only keep the 1000.00 for an emergency as at that time my husband's job was not so stable (is now) Having said all that I would say that if you think you can get a card with 0% and transfer then I would go for it but DO NOT close the card that you clean the balance off, cut it up so you wont use it but don't close it. Part of what hurts your credit score is having credit cards that are completely maxed, its better to have some available balance. What really matters though when it comes to any kind of loan other than credit cards is your debt to income ratio so its better to start paying off as much as you can as quickly as you can. Good luck!
I've always been a fan of Clark Howard and his advice. His advice is pretty simple and straightforward. Paying Off Credit Card Debt | www.clarkhoward.com If you think you need more face to face help, I would recommend seeing a counselor from the non-profit NFCC - National Foundation for Credit Counseling. AVOID places that advertise on the radio and TV that say they can get you out of debt for a fee. They are only trying to rip you off.
Nah, don't worry about it, if you don't know you just don't know.The cardholder is you, since your name is on the card. You hold the card.
A way to earn a small amount of money if you qualify. The qualification is a rare bood type. I had a friend in graduate school with a rare blood type that was making $200 per month selling his blood. This was back in the early 90s. He had to stop after a while as they told him his antibodies were getting low. It might be worth a try.
I know it's not directly relevant to this situation but at one point I was close to drowning in debt, at least unable to move forward in any real way, and what saved me was rolling my debt (credit cards, student loans) into the refi of my home. I know that there are negatives attached to this strategy but under my circumstances it worked. Since then I've sold that property and I am very close to being debt free (a modest balance on one credit card). I live a very "no frills" life but I love the feeling of not worrying when the bills arrive in the mail and being able to put some money aside. I'm even buying some silver like b4 suggested.
I wouldn't say I'm drowing! hahaha I'm more just treading water and gradually working my way towards the shore... -Matt
