Edgewood, MD · Member since 2014 · 283 posts · 59 votes
I have credit card debt that I'm desperately trying to pay off. I have a full and part time job but, it still feels like I can't catch up. I was debating about giving a certain credit repair company (I would name it but I'm not sure if this thread will get deleted if I do) a call. They have an option of debt settlement and credit repair. My question is what are the ramifications to my credit if I go this route? Are there any other options I can go with that won't affect my credit negatively?
Contractor · Seattle, WA · Member since 2014 · 25 posts · 13 votes
10y
You need to get your hands on Dave Ramsey's book "total money makeover" and get involved with a local church that is hosting a financial peace university. You got this but you need to believe you can do it. He has countless podcasts and YouTube videos that explain his teachings.
Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
9y
That's great, David! Sometimes, you just gotta talk to someone to see how they can work with you. Are you still applying the snowball method to your highest interest rate card (or balance, or however you chose the first one to pay off)? Do you have a general timeline of when you think you'll be debt free? Congrats on your progress!
Edgewood, MD · Member since 2014 · 283 posts · 59 votes
9y
@Nicole A.Thank you for your kind words. I'm paying the highest interest rate first but, it wasn't intentional. I originally planned on paying the lowest balance first just so I could have a quick win for myself. When I lined up all 6 of my credit cards from lowest to highest balance, I then found out each of my cards interest rates. It worked out that my interest rates from highest to lowest was identical to my balances from lowest to highest. I hope to pay off my 1st credit card by the end of May/beginning of June. I have to take care of my taxes in April and May and I have another obligation I need to take care of. I'd like to be at least 30% debt to income ratio by the end of the year. There's a lot of over time at my job that appears to be going no where for a long time. So its possible but aggressive at the same time.
Edgewood, MD · Member since 2014 · 283 posts · 59 votes
8y
Happy Thanksgiving to everyone! Just a quick update, I paid my car off and I paid 1 credit card off. Hopefully I'll be able to pay another 1 off by the end of the year. From May to October I raised my FICO score 30 points from 634 to 664. All my cards are up to date and I still haven't used them. As I pay off a loan, I increase the amount I save into my savings account. I'm happy with the progress but still have a long way to go.
Ronkonkoma, NY · Member since 2016 · 63 posts · 24 votes
8y
I also recommend Dave Ramsey. 5 Years ago we were $80,000 in Debt (Most of it was a HELOC on our home) and $120,000 underwater with our house. We took the Financial Peace University course at a nearby church. In two an a half years we paid the entire $80,000 and due to that, coupled with the market uptick, we were no longer underwater with our house. A year and a half later we were able to sell that house and upgrade to a larger, nicer house. Today we remain debt free except for our main mortgage, which is what Dave Ramsey teaches, and we are in a position to start investing in real estate. I know two and a half years sounds like a long time but short of bankruptcy, there is no magic way out of immense debt, and you have to change your financial philosophy to be successful.
Gardiner, ME · Member since 2015 · 190 posts · 177 votes
8y
Happy Thanksgiving to you too David! I remember this post from months ago and this is wonderful news!
People are going to say to take the money in savings and apply it toward the balance. Beyond a small emergency fund that makes a good deal of sense. But, I say stick with what is working for you.
Well done, David! Love following your progress. I was there also a few years ago. Paid off $87k in credit cards and personal loans.
I used DR 's debt snowball method. Attacked lowest balances first for 'wins'. Don't forget to reward yourself in small ways. How are you coming on the card paydowns?
Edgewood, MD · Member since 2014 · 283 posts · 59 votes
7y
@Steve Vaughan Thank you and congrats on you paying off your debt. Everything is coming along. I haven't missed a payment in over 2 years. I put everything on autopay and gave myself reminders on my phone's calendar that the payment was due. This year and hopefully from here on out I'm going on a vacation. Or should I say I'm going to start traveling. It can be in the next state for all I care.
@Chris Szepessy Thank you. For me bankruptcy just wasn't an option. Had to make some sacrifices along the way but bankruptcy just wasn't an option for me. I would advise everyone to consider all options and simply do whats best for them.
@Oleg Shalumov Thank you. Its funny that the more vocal I was about my situation the more others have opened up to me about their financial situation. Or, they ask for tips on how I did what I did.