Can I be saved, or am I in deep s**t?

[Anonymous]

Here's my story:

I'm a 24-year-old shopaholic. I have always been good with my money until recently. Lets say... the past year. I'm actually not looking for any personal advice since I already know I have a problem. What I want to know is if someone in my position can dig out of the mess I've made. So here we go...

Here are my credit cards:

Citi Card: $23775/$24850 (pretty much maxed out) - On top of that, Citi decided to send me a letter stating that they will be increasing my APR from 11% to at least 29.99%. I had no choice but to opt out. I don't understand because I have never NEVER been late on a payment ever. Now that card is closed and nonusable. Good choice, or bad choice?

Amex Sky: $13800/$14600 (pretty much maxed out as well) - This one is in good standing. They haven't thrown anything crazy at me... yet. I've heard a lot of crazy stuff with Amex and I'm afraid they are about to do the same thing as Citi did to me. Needless to say, this card is in a drawer, untouched. I have been paying this one off little by little. Slowly but surely. 

US Bank: $4500/$4600, $1500/$1800, $8500/$8600 (All three are maxed of course) - So basically I have three different bills to pay with US Bank. I don't know how it got this bad, but apparently I had no idea I was living off my credit cards over the past year; they just keep going up. Now these I have a problem with. I've noticed that every time I pay them, I keep using them again because I either need gas, or food, or vet bills, etc. It just won't go down. 

These aren't the only credit cards I have. I also have a Capital One ($500), HSBC ($350), Discover ($4000), Amex Gold - All of these carry $0 balance. I'm just afraid to use them. I don't want to use them at all. I only make about $35k a year. Enough to get by for now. My rent is $600. I have a car payment that is $425 per month. My cell phone bill is about $70 per month. I have cable TV/internet that is about $130 per month. How much is left? Not a whole lot. As far as making payments on everything, I have NEVER missed one single payment on anything. Not a credit card, not rent, not my car, NOTHING. So now is my time to ask/beg of everyone, if you know what I need to do, please let me know. I just feel like the hole I dug is getting deeper and deeper. I just don't know what to do anymore. And yes, if you're wondering, I have not been going out for a while now. 

On top of all that, I recently got a student loan because I want to go back to school for a different degree. So my first loan will be given to me and what's left will be about $1400 for books/supplies and what not per quarter. 

Again, if you can help, PLEASE DO! I feel like I'm going to lose everything here soon.

[smallfry]

Stop using your cards and pay them off as quickly as possible. There is no magic bullet. Sorry you find yourself in this position but maxxing cards out is one reason for AA.

[Anonymous]

Create a written budget.

Eliminate ALL non-essentials (no eating out, no movies, no impulse buys, no gadgets).

Select generic or store brand for grocery and personal care products.  Pack a lunch.

Have you accumulated anthing of value that can be sold to begin paying down these debts?  Have an ebay/craigslist sale, garage/yard sale?  Sell the stuff you don't need, don't use, can live without, is a luxury, under the bed, in the closet/attic/garage and most especially if in paid storage.

Get another part time job.  Even just earning $300 to $600 extra per month goes a long way toward paying this off over the course of a year.

Initiate the "snowball" payment system.  Either pay down your highest apr or lowest balance card first with all extra cash and make minimums on all else.  Once that card is paid off, roll everything into the next high apr or low balance card.  Continue till out of debt.

[Anonymous]

That's easier said than done, smallfry. I pay my cards every month, but I always end up using them again because if I don't, then I won't have gas to get to work, or I'll starve. Those are the only things I've been doing lately. I've done nothing else in the past month.

I guess I don't really have any other options but to keep doing what I've been doing. Unless somebody's got some tricks up their sleeve, do tell! Thanks! 

[Anonymous]

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@Anonymous wrote:

Create a written budget.

Eliminate ALL non-essentials (no eating out, no movies, no impulse buys, no gadgets).

Select generic or store brand for grocery and personal care products.  Pack a lunch.

Have you accumulated anthing of value that can be sold to begin paying down these debts?  Have an ebay/craigslist sale, garage/yard sale?  Sell the stuff you don't need, don't use, can live without, is a luxury, under the bed, in the closet/attic/garage and most especially if in paid storage.

Get another part time job.  Even just earning $300 to $600 extra per month goes a long way toward paying this off over the course of a year.

Initiate the "snowball" payment system.  Either pay down your highest apr or lowest balance card first with all extra cash and make minimums on all else.  Once that card is paid off, roll everything into the next high apr or low balance card.  Continue till out of debt.

---

The Snowball system seems like the best choice for the smaller balances. As far as selling my things, I can probably do that... but it can only help so much. Most my credits went to going out buying drinks and food and traveling. I don't really have any crazy gadgets that I can give up, really. 

Getting a second job is impossible at the moment. Especially when I'm going back to school in the fall. 

Any other suggestions?

[Anonymous]

I do have a lot of clothes, and have tried selling them to Plato's closet and what not. I don't buy those expensive name brand stuff or anything. I just get whatever I like and if they happen to be expensive, it doesn't mean I can resell for the same or even half the price. Clothes get cheaper by the season now.

I just don't think selling my things will help that much. 

What do you think about me going back to school? Is that a bad idea at the moment? 

[DI]

You are virtually bankrupt.  With the interest so high, its impossible to get ahead.  No advice I give will help. How much does it cost to file bankrupt?.  By all means I'm not advocating filing bankruptcy, but those balances and your salary is not enough to get ahead.  You will have to spend all of your salary just on credit cards, and I don't think anybody is able to do that. 

[Anonymous]

You are only 24 years old.  Sometimes you have to face reality before you can achieve your dreams.  Fix your behavior first, then start worrying about going to school.  Seek out professional debt management counseling.  When you start behaving more responsibly, you will be able to exercise better judgment.

Bankruptcies are much easier to explain if caused by medical or marital problems (then you blame it on your spouse).  If you tell a potential employer that you found yourself in deep s**t from inattention to your finances, they will assume that you lack the judgment to take on responsibilities that come with higher salaries.

[Anonymous]

it's a little weird you didn't know you were living off your credit cards.  surely you knew you were charging regular expenses to your card.  i think that getting a grip on your finances and your life ahould probably come before school.  get a second job and stay strong.

i wouldn't lie to anyone, future employer or yourself for that matter on how things happened.  if you can't take personal responsibility you simply aren't ready for a job with increasing job related responsibilities.

you should probably get a less expensive cell phone plan and drop the cable and internet for now

i know it's tough and i'm really pulling for you

[Anonymous]

You don't have many choices. When you stop and think about it...you will not get out of this unscathed. You created this debt and you will pay for it, (one way or another). The good thing is that you are young and have your whole life ahead of you. It will take time and a lot of personal and life style changes but you can recover even if it means recovering from bankrupcy (which can be done). Good luck.