Getting out of carrying balances

[Anonymous]

Hi all,

I live in one of the most expensive cities in the US and, unfortunately, wages haven't kept up with cost of living. I find myself basically living on zero interest credit cards and having to carry a balance of around $500 every month just to break even. This is with me having gotten two pay raises in my time at my current employer. My rent eats up a huge chunk of my paycheck. I pay $1150 for a studio apartment, all utilities included. 

I utilize cash back cards like Citi DC and Discover It to maximize the amount I get back, but it doesn't seem to be going anywhere.

Any advice on how to get out of this endless cycle of carrying balances? I despise debt and want to be able to pay my balances in full every month.

Thanks again 

[tonyjones]

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@Anonymous wrote:

Hi all,

I live in one of the most expensive cities in the US and, unfortunately, wages haven't kept up with cost of living. I find myself basically living on zero interest credit cards and having to carry a balance of around $500 every month just to break even. This is with me having gotten two pay raises in my time at my current employer. My rent eats up a huge chunk of my paycheck. I pay $1150 for a studio apartment, all utilities included. 

I utilize cash back cards like Citi DC and Discover It to maximize the amount I get back, but it doesn't seem to be going anywhere.

Any advice on how to get out of this endless cycle of carrying balances? I despise debt and want to be able to pay my balances in full every month.

Thanks again 

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1. Get a better paying job.

2. Get rid of unecessary monthly expenses.

3. Get a roommate.

4. When your 0% APR card is about to expire apply for another 0% card and keep doing this every 12-24 months.

[Anonymous]

This post is one that you are going to get some wild reponses to. My suggestion is to use something like mint to track your spending. Obviously when expenses>income something has to give. Is there something that you can cut or do cheaper? We dont have access to your lifestyle, what youspend your money on besides absurd rent (yikes I could buy a 2500 sq ft house here for less than that studio). At some point those 0 percent offers are going to run out and it will only get worse. I'm certainly not trying to be critical, but you seem to have a fairly untenable situation on your hands.

[Anonymous]

No, I totally agree that my situation is untenable. I'm especially concerned because my current TU FICO (thanks to Discover) is 768 and I want to keep it that way. The sad part is that i've already mapped out the next three or four 0% APR cards that I want in order to get by.

These are my fixed expenses:

1. Rent of $1150. Trust me when I say this is a cheap rent for the part of the country I live in. My lease is up at the end of May and i'm going to go month to month.

2. Comcast Cable & Internet $90. Tried getting rid of Cable, but it's basically the same cost if I just had internet.

3. Cell phone $200 a month. Parents give me $120 for their portion, so I only actually pay $80. 

The rest I plow into expenses like public transit (don't own a car because everyone takes trains here anyway), food (I always buy cheap deals at Safeway) and occasional recereation or medical expenses.

I basically decided shortly after I moved to my current location that it was too expensive for what it is (east coast, but not NYC) and that I need to move out of this city. 

[Anonymous]

How bout getting a very part time job. Even a couple days a month at a bar or restaurant could add 4-500 a month. I literally work 2 days a week at a very local bar in the winter and make enough to live on. (In the summer I work a ton, but winters 2 days a week is enough to pay all my bills and keep me afloat.) Even a crappy chain restaurant you can easily make 100 bucks a night, probably closer to 200 in a high COL area like that.

[bdhu2001]

The only thing I can suggest is get a part-time job until you can get out of your lease.  In the mean time, search for a room mate situation and cut down on your eating expenses. A slow cooker cook book usually helps so that your meals are ready as soon as you get home. 

My kids live in San Francisco and cheap studio apartments are $1500 per month in SF so I feel your pain. Because of that, my son lives in a room mate building (the owner rents out the various rooms.  With the city you live in being so expensive, I'd hazard a guess that your city has similar arrangements.

[TheGardner]

Are you over spending by $500 a month? So $6000 a year? Or do you pay off the $500 in a month or so them charge it back up while maintaining a revolving $500 balance?

[Anonymous]

The latter. I carry a revolving balance of about $500 every month by rotating between my Citi DC and Discover It.

[Anonymous]

Move.

[Anonymous]

You really cannot supplement your income with 0% APR credit card balances. It will eventually blow up in your face. 

For one thing there is an obvious problem that you can't just keep going further into debt. If you are carrying a balance that does not increase then you ARE able to make ends meet and you need to find a way to tighten your belt temporarily to get rid of the balance. If the balance is growing every month that is a game you can only play so long before the CC's figure out what you are doing.

Eventually the 0% offer won't be available and you'll be forced to pay the piper.

The other point is you REALLY need to be saving. Retirement may seem a long way off, but it's an expensive proposition that you need to be saving for. You may also eventually want to buy a home, and while it seems ridiculous now, one day it may be possible. If you find the discipline to start paying down your debt now, you can very naturally transition to making payments towards a retirement account once the debt is gone. Eventually you will be very glad you did.

I know it's tough, but it's something you've gotta do, and when you do, the long-term benefits all flow to you! Don't be suckered by the 0% offers. Get rid of that balance!