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Any tips for paying down credit card balances?

Contributor

Re: Any tips for paying down credit card balances?

This may have already been said, and may not even be helpful, but here goes anyway:

One thing I HAD to do when I started my debt pay-down extravaganza was to REALLY SCRUTINIZE where my money was going.

Back in March of 2008, I owed $20k+ in personal and CC debt. I have since added $2.5k to that debt to cover some legal fees.

I was living paycheck-to-paycheck, absolutely overwhelmed by the idea of paying down debt - feeling hopeless.

The first thing i did was track my spending IN DETAIL for one month. I called every single one of my regular bills (car insurance, cable/Internet provider, etc.) and asked them how THEY could lower my bills. That saved me over $100 a month in discounts and promotions I never would have figured out on my own.

I cut out many non-essentials - canceled Netflix, stopped paying for my dead-beat friend's cell phone bill, etc. Those measures saved me over $200 a month.

I looked at my spending CAREFULLY. I spent a lot more than I realized on NOTHING. A pop here, a FF meal there, taking the check when out to lunch with a friend, etc. I estimated how much I could live on in terms of pocket money so I didn't always FEEL broke.

These things seem simple - elementary even. The result? Since March 2008, even with adding $2.5k to CC debt - I've completely paid off personal debt, and my CC debt is down to $10k. That will be paid off by the end of 2008.

Deciding to be disciplined, knowing where I actually stand with my finances, asking my creditors to find me some cost savings, and paying my bills before I make any purchases has made a huge difference in how well I sleep at night.
5/11/08 FICOs: EQ - 551
8/6/08 FICOs: EQ - 659, EX - 663, TU - 683
Regular Contributor

Re: Any tips for paying down credit card balances?



_andClimbing wrote:
This may have already been said, and may not even be helpful, but here goes anyway:

One thing I HAD to do when I started my debt pay-down extravaganza was to REALLY SCRUTINIZE where my money was going.

Back in March of 2008, I owed $20k+ in personal and CC debt. I have since added $2.5k to that debt to cover some legal fees.

I was living paycheck-to-paycheck, absolutely overwhelmed by the idea of paying down debt - feeling hopeless.

The first thing i did was track my spending IN DETAIL for one month. I called every single one of my regular bills (car insurance, cable/Internet provider, etc.) and asked them how THEY could lower my bills. That saved me over $100 a month in discounts and promotions I never would have figured out on my own.

I cut out many non-essentials - canceled Netflix, stopped paying for my dead-beat friend's cell phone bill, etc. Those measures saved me over $200 a month.

I looked at my spending CAREFULLY. I spent a lot more than I realized on NOTHING. A pop here, a FF meal there, taking the check when out to lunch with a friend, etc. I estimated how much I could live on in terms of pocket money so I didn't always FEEL broke.

These things seem simple - elementary even. The result? Since March 2008, even with adding $2.5k to CC debt - I've completely paid off personal debt, and my CC debt is down to $10k. That will be paid off by the end of 2008.

Deciding to be disciplined, knowing where I actually stand with my finances, asking my creditors to find me some cost savings, and paying my bills before I make any purchases has made a huge difference in how well I sleep at night.

 That is Fantastic andclimbing. It is such a great feeling when you are out from under that weight. You seem to be able to breathe easier, sleep beter. The next step to that program after debt is completely wiped out is to continue your same habits until you have a nice comfortable savings to cover you for 3 - 4 months in case anything happens (emergency funds).  Then comes investment stage. I am finally on this stage and it is just as challenging but fun.
 
 Don't fall into the downfall of when your clear of debt, it is time to celebrate my accomplishments. You celebrated already, thats where the debt came from. Don't put that same weight back on your chest. Breathe easy while you save for a rainy day.

 
Contributor

Re: Any tips for paying down credit card balances?

Wow, that's pretty inspiring man. I've definitely started keeping track of EVERYthing (thanks, Quicken software), and I'm gonna feel broke for a while...but it's totally worth it. Buying unnecessary stuff now comes with too much guilt to fully enjoy.
FICO (06/17/08): TU 691 - EQ 642 - EX 638 - Util 64%
FICO (07/23/08): TU 698 - EQ 653 - EX 644 - Util 50%
FICO (02/04/09): TU 694 - EQ 668 - EX 654 - Util 43%
FICO (05/18/09): TU 687 - EQ 675 - EX n/a - Util 39%
FICO (03/09/10): TU 666 - EQ: 691 - EX 644 - Util 54%
IDGuard (2/8/12): TU 690 - EQ: 710 - EX 710 - Util 72%
FICO (03/13/12): EQ: 696 (87% revolving to limits)
Regular Contributor

Re: Any tips for paying down credit card balances?

on a purchase before taking it to the counter to pay. Ask yourself "DO I NEED or WANT THIS?"
 
If it is Need can not do too much about it.
 
Want... if you have extra and want to reward yourself from time to time then indulge.
 
Credit is not extra. Savings is extra.
 
Ususally when I ask myself questions like this I start thinking how long will I use it till it is collecting dust and wind up passing on it now.
Established Contributor

Re: Any tips for paying down credit card balances?

if you do it the mathematically sound way, you make minimum payments lower rates then apply the rest the highest rate account OR if you need to play mind games to make you feel better, you do it the DR way, which to ally most of the money to smallest balance regardless of rate and make the minimum om the rest, there by knocking out one less obligation as quickly possible.
People say "Only apply for credit you NEED"

I say "apply for credit you have PRATICAL use of"

I don't have AMEX card because I don't want a card that suffers from PMS
Established Contributor

Re: Any tips for paying down credit card balances?


smoothjk wrote: Wow, that's pretty inspiring man. I've definitely started keeping track of EVERYthing (thanks, Quicken software), and I'm gonna feel broke for a while...but it's totally worth it. Buying unnecessary stuff now comes with too much guilt to fully enjoy.
problem with Quicken store all it does for you is show you where your money went after the fact, I use http://enjoy.finicity.com
People say "Only apply for credit you NEED"

I say "apply for credit you have PRATICAL use of"

I don't have AMEX card because I don't want a card that suffers from PMS