topic Re: Creepy high amount of credit card debt. in Credit Cards

Creepy high amount of credit card debt.

tcbofade — Wed, 26 Nov 2014 03:36:56 GMT

As most of you know, DW and I are carrying a LOT of credit card debt this year.

It's been a wonderful year. We bought a home via short sale on Black Friday last year...363 days ago roughly. In the year since, we've put a LOT of sweat, dollars, and credit into rebuilding this home. It's gorgeous, we're broke and exhausted.

We have essentially returned the home to its former glory and nearly doubled it's value. We'll refinance early in 2015 and pay off all of this debt...or most of it anyway. As needs and goals change, I decided to reformat my CC excel sheet that I track every week, because we're about to go in a different direction with it.

When you add up "his" cards, "her" cards, "our" cards, and DD's cards, you get an astonishing 55 open accounts, more than $142k in credit lines, and more than $90k in debt.

It's been an expensive year too apparently....

Re: Creepy high amount of credit card debt.

CreditCuriosity — Wed, 26 Nov 2014 03:39:33 GMT

wow alot of debt there... Best of luck contolling it before the interest eats you alive, although you stated you have a plan!

Re: Creepy high amount of credit card debt.

TheGardner — Wed, 26 Nov 2014 03:40:01 GMT

Very! When you pay it off via lower interest refi your wallet will be thanking you!

Re: Creepy high amount of credit card debt.

tcbofade — Wed, 26 Nov 2014 03:40:44 GMT

@CreditCuriousity wrote:
wow alot of debt there... Best of luck contolling it before the interest eats you alive, although you stated you have a plan!

The vast majority of it is at zero percent interest....and January is 36 days away....tick, tock....

Re: Creepy high amount of credit card debt.

Luscher — Wed, 26 Nov 2014 05:42:44 GMT

You should try and pay it down before refinancing for the better rate. But Im assuming that is not possible.

Re: Creepy high amount of credit card debt.

Anonymous — Wed, 26 Nov 2014 07:00:04 GMT

@tcbofade wrote:
@CreditCuriousity wrote:
wow alot of debt there... Best of luck contolling it before the interest eats you alive, although you stated you have a plan!
The vast majority of it is at zero percent interest....and January is 36 days away....tick, tock....

Do I smell a run on AMEX backdating?

Or are you implying your income tax return (if not a liability) will help?

Re: Creepy high amount of credit card debt.

taxi818 — Wed, 26 Nov 2014 11:10:37 GMT

@Anonymous wrote:
@tcbofade wrote:
@CreditCuriousity wrote:
wow alot of debt there... Best of luck contolling it before the interest eats you alive, although you stated you have a plan!
The vast majority of it is at zero percent interest....and January is 36 days away....tick, tock....
Do I smell a run on AMEX backdating?

Or are you implying your income tax return (if not a liability) will help?

Well at 90k in the hole. No income tax on earth will help but I'm sure op planned it out for 2015 as he would not be telling us. Good luck. That's very brave and tough. But that new house. Excellent.

Re: Creepy high amount of credit card debt.

chalupaman — Wed, 26 Nov 2014 11:20:09 GMT

Wow that really sucks. I have some CC debt myself that I've been paying down but have a lot of available credit as well. Trying to get utilization down from like 9% to something lower. I think at least half of it is at 0 interest right now cause I have several cards with long intro APR offers thankfully.

Re: Creepy high amount of credit card debt.

tcbofade — Wed, 26 Nov 2014 12:09:52 GMT

@Anonymous wrote:
@tcbofade wrote:
@CreditCuriousity wrote:
wow alot of debt there... Best of luck contolling it before the interest eats you alive, although you stated you have a plan!
The vast majority of it is at zero percent interest....and January is 36 days away....tick, tock....
Do I smell a run on AMEX backdating?

Or are you implying your income tax return (if not a liability) will help?

None of the above. We are going to refinance the house and pull out the equity to pay off the credit card debt that we built up rebuilding the house, as was the plan. We've got somewhere between $85k and $135k in equity....it all depends on the appriasal.

Re: Creepy high amount of credit card debt.

CreditCuriosity — Wed, 26 Nov 2014 13:35:55 GMT

@tcbofade wrote:
@Anonymous wrote:
@tcbofade wrote:
@CreditCuriousity wrote:
wow alot of debt there... Best of luck contolling it before the interest eats you alive, although you stated you have a plan!
The vast majority of it is at zero percent interest....and January is 36 days away....tick, tock....
Do I smell a run on AMEX backdating?

Or are you implying your income tax return (if not a liability) will help?
None of the above. We are going to refinance the house and pull out the equity to pay off the credit card debt that we built up rebuilding the house, as was the plan. We've got somewhere between $85k and $135k in equity....it all depends on the appriasal.

Hopefully you didn't over-improve the house for the neighborhood ... Parents own an appraisal company mainly commerical, but some residential. Use to work for them while in college.. Anyways, sounds like you bought a fixer-upper and made it similiar to ones in your neighborhood as it was probably in need of some improvement? Hopefully you didn't overimprove for you neighborhood. Best of luck in knocking that debt down!

Re: Creepy high amount of credit card debt.

Anonymous — Wed, 26 Nov 2014 13:42:25 GMT

As long as you like the new house and plan on living there for the foreseeable future, it sounds like it was a great use of your intro financing and credit limit. Congrats, tc!

Re: Creepy high amount of credit card debt.

Anonymous — Wed, 26 Nov 2014 14:18:16 GMT

@CreditCuriousity wrote:
@tcbofade wrote:
@Anonymous wrote:
@tcbofade wrote:
@CreditCuriousity wrote:
wow alot of debt there... Best of luck contolling it before the interest eats you alive, although you stated you have a plan!
The vast majority of it is at zero percent interest....and January is 36 days away....tick, tock....
Do I smell a run on AMEX backdating?

Or are you implying your income tax return (if not a liability) will help?
None of the above. We are going to refinance the house and pull out the equity to pay off the credit card debt that we built up rebuilding the house, as was the plan. We've got somewhere between $85k and $135k in equity....it all depends on the appriasal.
Hopefully you didn't over-improve the house for the neighborhood ... Parents own an appraisal company mainly commerical, but some residential. Use to work for them while in college.. Anyways, sounds like you bought a fixer-upper and made it similiar to ones in your neighborhood as it was probably in need of some improvement? Hopefully you didn't overimprove for you neighborhood. Best of luck in knocking that debt down!

No kiddin'

Better to have the cheapest house on the most expensive block you can afford, than the most expensive house on the cheapest block.

Re: Creepy high amount of credit card debt.

s_haliz — Wed, 26 Nov 2014 16:43:15 GMT

I am going to suggest extreme measures.....I hope you would not be offend edor feel bad.

This kind of debt is very high. You need to alter your life style significantly. How?

1. Try not to eat at restuarants (other than fast food joints where things are not so expensive);
2. No movies/theatres;
3. Cut cable if you have;
4. Start cutting coupons to save $$ in grocery and everything else;
5. Don't host lots of parties;
6. Save, save, and save....

The goal should be to spare about $1,200 to $1,500 month extra that can now help to pay your debt.....You can save it and you cann do it. It is tough. But it can be accomplished....

Re: Creepy high amount of credit card debt.

Anonymous — Wed, 26 Nov 2014 16:54:52 GMT

@s_haliz wrote:
I am going to suggest extreme measures.....I hope you would not be offend edor feel bad.

This kind of debt is very high. You need to alter your life style significantly. How?

1. Try not to eat at restuarants (other than fast food joints where things are not so expensive);
2. No movies/theatres;
3. Cut cable if you have;
4. Start cutting coupons to save $$ in grocery and everything else;
5. Don't host lots of parties;
6. Save, save, and save....

The goal should be to spare about $1,200 to $1,500 month extra that can now help to pay your debt.....You can save it and you cann do it. It is tough. But it can be accomplished....

While its a high amount of debt, I disagree with the level of extremeness. This isn't the result of lifestyle choices, but home renovation. Ordinarily, somebody would take out a second mortgage to cover improvements like this, which would have an interest rate of 5+%. I think tc did the responsible thing in putting it on 0% APR cards, which bought a free year to try to pay it down and get everything done before he goes for the low interest loan.

Re: Creepy high amount of credit card debt.

s_haliz — Wed, 26 Nov 2014 17:00:48 GMT

@Anonymous wrote:
@s_haliz wrote:
I am going to suggest extreme measures.....I hope you would not be offend edor feel bad.

This kind of debt is very high. You need to alter your life style significantly. How?

1. Try not to eat at restuarants (other than fast food joints where things are not so expensive);
2. No movies/theatres;
3. Cut cable if you have;
4. Start cutting coupons to save $$ in grocery and everything else;
5. Don't host lots of parties;
6. Save, save, and save....

The goal should be to spare about $1,200 to $1,500 month extra that can now help to pay your debt.....You can save it and you cann do it. It is tough. But it can be accomplished....
While its a high amount of debt, I disagree with the level of extremeness. This isn't the result of lifestyle choices, but home renovation. Ordinarily, somebody would take out a second mortgage to cover improvements like this, which would have an interest rate of 5+%. I think tc did the responsible thing in putting it on 0% APR cards, which bought a free year to try to pay it down and get everything done before he goes for the low interest loan.

You can certainly disagree all you want. The debt is NOT accumulated because of lifestyle. Agreed. But lifecycle changes is needed TO REDUCE/ELIMINATE debt. There is no other way around. Unless one declares bankrupty, wins a lotto, or have significant earnings jump.......

The cause at this point is not as much important as to how you can get out of this debt. Please suggest some golden ideas, if you have.

Re: Creepy high amount of credit card debt.

Anonymous — Wed, 26 Nov 2014 22:25:06 GMT

@s_haliz wrote:
@Anonymous wrote:
@s_haliz wrote:
I am going to suggest extreme measures.....I hope you would not be offend edor feel bad.

This kind of debt is very high. You need to alter your life style significantly. How?

1. Try not to eat at restuarants (other than fast food joints where things are not so expensive);
2. No movies/theatres;
3. Cut cable if you have;
4. Start cutting coupons to save $$ in grocery and everything else;
5. Don't host lots of parties;
6. Save, save, and save....

The goal should be to spare about $1,200 to $1,500 month extra that can now help to pay your debt.....You can save it and you cann do it. It is tough. But it can be accomplished....
While its a high amount of debt, I disagree with the level of extremeness. This isn't the result of lifestyle choices, but home renovation. Ordinarily, somebody would take out a second mortgage to cover improvements like this, which would have an interest rate of 5+%. I think tc did the responsible thing in putting it on 0% APR cards, which bought a free year to try to pay it down and get everything done before he goes for the low interest loan.
You can certainly disagree all you want. The debt is NOT accumulated because of lifestyle. Agreed. But lifecycle changes is needed TO REDUCE/ELIMINATE debt. There is no other way around. Unless one declares bankrupty, wins a lotto, or have significant earnings jump.......

The cause at this point is not as much important as to how you can get out of this debt. Please suggest some golden ideas, if you have.

Its quite possible that no lifestyle changes are required in order for tc to pay this off. I have $250k in debt right now, in the form of a mortgage. Once he adjusts the debt to something with a reasonable interest rate, it falls into an additional/larger mortgage, which would only require a lifestyle adjustment if tc planned poorly. From his posts, it sounds like this was reasonably planned out, and now he can go back to paying $700 per month or whatever this works out to on a 30 year basis. It all depends on what tc has already budgeted for. Since he's been paying off the cards from the high points of the renovation, he can probably afford the extra $400 or so a month that the second mortgage is going to incur.

Re: Creepy high amount of credit card debt.

Chris679 — Wed, 26 Nov 2014 22:34:13 GMT

@Anonymous wrote:
@s_haliz wrote:
@Anonymous wrote:
@s_haliz wrote:
I am going to suggest extreme measures.....I hope you would not be offend edor feel bad.

This kind of debt is very high. You need to alter your life style significantly. How?

1. Try not to eat at restuarants (other than fast food joints where things are not so expensive);
2. No movies/theatres;
3. Cut cable if you have;
4. Start cutting coupons to save $$ in grocery and everything else;
5. Don't host lots of parties;
6. Save, save, and save....

The goal should be to spare about $1,200 to $1,500 month extra that can now help to pay your debt.....You can save it and you cann do it. It is tough. But it can be accomplished....
While its a high amount of debt, I disagree with the level of extremeness. This isn't the result of lifestyle choices, but home renovation. Ordinarily, somebody would take out a second mortgage to cover improvements like this, which would have an interest rate of 5+%. I think tc did the responsible thing in putting it on 0% APR cards, which bought a free year to try to pay it down and get everything done before he goes for the low interest loan.
You can certainly disagree all you want. The debt is NOT accumulated because of lifestyle. Agreed. But lifecycle changes is needed TO REDUCE/ELIMINATE debt. There is no other way around. Unless one declares bankrupty, wins a lotto, or have significant earnings jump.......

The cause at this point is not as much important as to how you can get out of this debt. Please suggest some golden ideas, if you have.
Its quite possible that no lifestyle changes are required in order for tc to pay this off. I have $250k in debt right now, in the form of a mortgage. Once he adjusts the debt to something with a reasonable interest rate, it falls into an additional/larger mortgage, which would only require a lifestyle adjustment if tc planned poorly. From his posts, it sounds like this was reasonably planned out, and now he can go back to paying $700 per month or whatever this works out to on a 30 year basis. It all depends on what tc has already budgeted for. Since he's been paying off the cards from the high points of the renovation, he can probably afford the extra $400 or so a month that the second mortgage is going to incur.

Totally agree. OP was not a cry for help on how to get out from under this debt. It was an example of a well thought out plan to take advantage of credit to improve your lifestyle while saving on interest. Refreshing to see this rather than another post about an app spree for a bunch of store cards with $500 limits to "help with utilization."

Re: Creepy high amount of credit card debt.

tcbofade — Thu, 27 Nov 2014 11:38:18 GMT

Good thoughts all, thanks for your input.

No, I'm not offended, and we're not having a lifestyle issue.

We didn't overbuild our neighborhood, we bought a nearly 20 year old house that had fallen into disrepair, most homes in our subdivision sell for 200-300k. We bought for $115k.

We researched the price history on our home, it's been valued over $300k before, and our insurance agent wouldn't insure it for less than $200k.

We'll get another appraisal in January, and we'll see what they say then....

Re: Creepy high amount of credit card debt.

elim — Thu, 27 Nov 2014 12:09:27 GMT

@tcbofade wrote:
Good thoughts all, thanks for your input.

No, I'm not offended, and we're not having a lifestyle issue.

We didn't overbuild our neighborhood, we bought a nearly 20 year old house that had fallen into disrepair, most homes in our subdivision sell for 200-300k. We bought for $115k.

We researched the price history on our home, it's been valued over $300k before, and our insurance agent wouldn't insure it for less than $200k.

We'll get another appraisal in January, and we'll see what they say then....

congrats on the new home!

take some time to enjoy it while you knock out the debt!

Re: Creepy high amount of credit card debt.

CreditCuriosity — Thu, 27 Nov 2014 16:57:27 GMT

@tcbofade wrote:
Good thoughts all, thanks for your input.

No, I'm not offended, and we're not having a lifestyle issue.

We didn't overbuild our neighborhood, we bought a nearly 20 year old house that had fallen into disrepair, most homes in our subdivision sell for 200-300k. We bought for $115k.

We researched the price history on our home, it's been valued over $300k before, and our insurance agent wouldn't insure it for less than $200k.

We'll get another appraisal in January, and we'll see what they say then....

Glad to hear you bought cheap and other comps. in your area are going for that price... You should be in good shape then. I have just seen to many times where people have overimproved in the certain neighborhood and we couldn't give appraisal value to them for the value they thought the house was worth. Anyways you did you research and it will work out for you nicely you made 0% interest work for you! Happy gobble day.