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Regular Contributor
EandK23
Posts: 178
Registered: ‎09-12-2012

Re: Had to come to a realization tonight.

LS, it's a very humbling moment. I'm sure we can all say we've been there feeling our debt is out of control. Whether it's $500 or $10K, coming to that realization is a very unsettling feeling.  

New Contributor
cardslayer
Posts: 74
Registered: ‎01-08-2008

Re: Had to come to a realization tonight.

OP, it's good that you have recognized the issue and are willing to address it. Remember, cash is king, and all of these little revolving charges add up and eat away from money that we could save and use more wisely (i.e. invest). We can all get in trouble for various reasons that aren't as simple as not being able to handle CC's or overspending on wants.  Here's my story below -

 

I was in a pretty tough spot as well about 1.5yrs ago. It was due to taking heavy losses in business for the prior 1yr, and taking out a business loan to cover me which I PG'd. The loan is / was $120k @ 12.75% for 6yrs with a payment of $2650/mo :smileysad:. The loan reports to my personal CR as well.

 

Luckily, income other sources picked up, however that particular business never caught up to where it needed to be so I actually sold it (I was lucky to sell to a close competitor).  The amount I sold for covered about $200k in other business related debts, and roughly $15k of this business line. So, my current balance on this high-rate loan is $78k as of now. This sale was my version of "cutting my losses" and stop the bleeding, which is what it seems OP is doing in their own situation. Althoguh I still have this burdeon, I feel that I am in good financial health and more or less could stretch myself to pay off the balance with various reserves and emergency funds if something bad happened.

 

I personally feel that, at my income level, the debt is manageable and kind of the cost of being an entrepeneur. I'm glad I took action before it became unmanigable, which could easily happen to any of us in a tough spot. Looking back, I remember 1 fateful and timely decision that made the difference between cutting my losses when I did and probably being in dire straights right now, with my credit the least of my issues. Now, my FICO scores are inching up every month, and am currently between 692- 717 accross all three reports last time I got scores a month or so back. I am confident that I am on track to be 760+ over the next few years - especially when this big installment loan is paid off. I do have 1 derog which is an unpaid tax-lien (related to this whole fiasco) that I am working on.

 

I currently have 0% personal CC util since I sold that business, prior to that was about 30% - 60% util for 2yrs straight partly due to economic conditions. I do have about $4k on a Citi Business card @ 15.99% from an unrelated business. Unfortunately, this $2650/mo ($32k a year) is a lot of money to me, but I do have the means to pay it, and will continue to do so for the life of the loan unless I can pay it off sooner. In fact I've just made a payment before coming on here tonight :smileyembarrassed:

 

One thing I have learned that some of you may also have yet to realize, is that a little bit extra payment makes a big difference. I didn't always believe in this, and would generally go for large chunks or hopeing for a big lump sum coming my way and just paying what is required in the mean time. I got in the habit of rounding up to $3k/mo payment most months for this debt, and have seen my balance go down at a surprisingly accelerated rate. I mean, I'm sure i can add up the extra payments (-) interest saved and it would add up, but since I don't usually do the math and just pay blindly, it's just more like a pleasant surprise when I log in to pay in an otherwise sad situation.

 

Good luck to OP and any of you who are currently in a little too deep, and please take my advice and my example and immediately take action before it goes from a managable problem to a potentially dire situation.

Frequent Contributor
bluesnowman
Posts: 462
Registered: ‎10-29-2012

Re: Had to come to a realization tonight.

LS- I am very glad that you created this thread. Since I was a little kid, I have always seen my parents be in debt, and then they are able to pay it back, go up in debt again, and then pay it off again. Currently they have no debt other then their mortgage so I guess it is a good thing. With me, I never mentioned a credit card to my dad mainly because he is overprotective of me and he does not want me to be in any trouble whatsoever. However, I have been responsible thus far and the key thing is to not spend more then you make (i.e. I pull in 920-1000 a month, but I run about 400 a month through my cards and not more then that unless I have more money coming in that month in which it is bumped up an extra 100$.) It's all about discipline and if I fall on hard times, then I won't spend like crazy because I don't want the risk of my credit being damaged or ruined. The only thing I want to say is, just use your credit wisely and it will help you, and be honest with yourself, family, and your creditors when things happen or **** hits the fan. You can always change things and it is never too late, it's all about willpower, if you can conceive it, you can do it.

 

Linux- That sucks man. he obviously does not knpw where his money is going and he needs help. This is not good for him and if he ever gets sick or something else happens, how is he going to be able to pay the bills and the like. You have made some very big sacrifies I would say (I dont know how old you are but you sound young.) and I respect you more from what you have posted. I wish you nothing but the best. 

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Mega Contributor
LS2982
Posts: 15,434
Registered: ‎04-09-2011

Re: Had to come to a realization tonight.


Repo-ed wrote:

Man, I get jumpy when my CC debt gets around $500. 


I don't know how to describe it. I wasn't paying attention to it. I always make large payments on my accounts and 8K in CC debt didn't really 'hit' me at all, until last night when I actually sat and did some thinking on this and realized 'Hey, 8k is ALOT of debt then added my current balances that had not reported and that took it over 10k'.

 

I worked so hard to get where i'm at and i'd be crushed if I lost it.

 




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New Contributor
Posts: 58
Registered: ‎01-10-2009

Re: Had to come to a realization tonight.


LS2982 wrote:

Repo-ed wrote:

Man, I get jumpy when my CC debt gets around $500. 


I don't know how to describe it. I wasn't paying attention to it. I always make large payments on my accounts and 8K in CC debt didn't really 'hit' me at all, until last night when I actually sat and did some thinking on this and realized 'Hey, 8k is ALOT of debt then added my current balances that had not reported and that took it over 10k'.

 

I worked so hard to get where i'm at and i'd be crushed if I lost it.

 


LS, If this is all purchase debt how much of it is on low (under 10%) APR credit cards?

Valued Contributor
RockinRay
Posts: 1,931
Registered: ‎08-13-2007

Re: Had to come to a realization tonight.


LS2982 wrote:

Repo-ed wrote:

Man, I get jumpy when my CC debt gets around $500. 


I don't know how to describe it. I wasn't paying attention to it. I always make large payments on my accounts and 8K in CC debt didn't really 'hit' me at all, until last night when I actually sat and did some thinking on this and realized 'Hey, 8k is ALOT of debt then added my current balances that had not reported and that took it over 10k'.

 

I worked so hard to get where i'm at and i'd be crushed if I lost it.

 


Do not worry. You can and will bring this back under control. I have faith in ya!

 

Credit is good and credit is bad... You work hard to get these great lines and then that "weak" moment hits you and you make a purchase that you should not have made.

 

I keep my accounts in my budget software. If I am over-budget, the software shows me BIG RED NUMBERS and I hate those! This has really helped me control my spending.

 

At one time, we had over $72k in credit card debt. After working hard for the last couple of years, we are right at $3k remaining to be paid, and that is a 0 percent deal.

 

My wife has not liked me much while we worked on this and we did skip many thing that we like to do. But, in the long run it has paid off.

 

Good luck man - you can get beyond this.

Ray

** Every Card has a Job, and Every Card does its Job **

Valued Contributor
Repo-ed
Posts: 2,949
Registered: ‎02-09-2012

Re: Had to come to a realization tonight.


LS2982 wrote:

Repo-ed wrote:

Man, I get jumpy when my CC debt gets around $500. 


I don't know how to describe it. I wasn't paying attention to it. I always make large payments on my accounts and 8K in CC debt didn't really 'hit' me at all, until last night when I actually sat and did some thinking on this and realized 'Hey, 8k is ALOT of debt then added my current balances that had not reported and that took it over 10k'.

 

I worked so hard to get where i'm at and i'd be crushed if I lost it.

 


Remember that feeling of not being able to be instantly approved or be successful with recons.

 

Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Had to come to a realization tonight.

[ Edited ]

Thread is unlocked with a kind reminder for future posters to stay on topic.

 

Mod hat off......IMO, this is where I cringe on negative talk of cash and debit cards. They are very instrumental in keeping folks out of debt. And I also feel there's nothing wrong with using CCs provided you have the ability to PIF after each use. OP, I've been there more than once (slow learner). You'll pull through this. Engrain in your mind the negative feeling you feel when being in debt and make it emotional as opposed to staring at balances (works for me anyway).

Super Contributor
CS800
Posts: 6,542
Registered: ‎04-07-2008

Re: Had to come to a realization tonight.

Imagine going from $1900 CL to over $100K in one year?

 

It becomes overbearing no matter what anyone says. I went a bit crazy on my spending and shut it down fast. Now I'm paying it off as fast as I can. Lesson learned on my end. Boy that was a rude awakening.I'm even thinking about closing some cards with AF.

 

Even though my JP Morgan card has a hidden tradeline, I still have to pay it at the end of the month. So with that in mind, I have now totally shut down my spending. I just need a new TV and that would be it.

 

I'm glad I saw this thread. LS we are with you.






Frequent Contributor
JPersat
Posts: 299
Registered: ‎05-28-2012

Re: Had to come to a realization tonight.

After reading this thread, I sat and looked at my CC balances. Now, my limits are paltry compared to many on here :smileyhappy: but I'm still a student, and while my husband works for the railroad, it isn't as lucrative as most think. We got to the point where we'd make minimum payments, then charge more than we paid..never getting anywhere. Finally, we pulled from our savings to pay everything off. What a nice feeling! We're somewhere in the middle now - about $5.5k in credit lines and about $1k in balances. Most of which are on 0% or other low interest promo cards, so I don't feel too bad..but look foward to having all zeros again. My husband took a pay cut, so we're having to revamp our budget. Most of the cards are now banished to the sock drawer until we can figure stuff out.

 

Good luck, LS. You'll do fine!


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