# Credit Card Debt - how to get rid of!



## Oilers82 (Jan 17, 2011)

Hey guys

This is for a friend. 3 credit cards, none maxed, but about 18K in credit card debt in total. 1 card is at 0% (about $7000 balance) and 2 are at the standard like 19% interest rate.

Whats the best way to get rid of this? I would think a debt consolidation loan (at least for the 2 cards at 19%) and strict repayment plan but I've never had any experience with it so I don't really know how to help.

He's not a student so unable to qualify for student LOC.

Thanks in advance!


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## MrMatt (Dec 21, 2011)

Line of Credit if he qualifies
Then a debt consolidation loan.

Or simply put every penny he can spare on the high interest debt.


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## the-royal-mail (Dec 11, 2009)

1. recognize and address the spending problem that created the debt (stop the leak)
2. Pay off the debt starting with the highest interest cards first. (mop up the floor)

Don't expect instant gratification. It will take time to pay off. And there is no need to bother with shell games.


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## cannew (Jun 19, 2011)

Agree with above, but would insist that the person CUT up all his credit cards. No advantage to a consolidaion if he\she is going to continue to charge for things he\she can't afford and go further into debt.


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## uptoolate (Oct 9, 2011)

Royal Mail hit it on the head. Have to stop the bleeding first and foremost and then pay down the card with the highest interest rate first. I remember reading the idea of putting the cards in a water-filled Tupperware container in the freezer to stop the impulse buy. Very humourous! Cutting up the cards is a little extreme but what about getting rid of the two 19% cards and keeping the 0% one? Or was this just a teaser rate? If it is going to go up to 19% eventually then maybe getting a true low interest rate card. 

In the meantime, a LOC would be great to pay the two high interest rate cards down but obviously a very bad idea if the person is just going to run the cards up again. Get rid of them. The LOC then needs to be paid down aggressively and not just forgotten which is easy in this low interest rate environment. 

I have never understood the need for more than 1 or at most 2 credit cards.


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## dogcom (May 23, 2009)

Also maybe seeking debt counseling before any consolidation loans or whatever so they are ready and know what it takes to deal with spending and debt. It is hard to do on your own, it is always easier to have someone you don't know spell it out for you.


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## mind_business (Sep 24, 2011)

Everyone's suggestions above are good. This is how I would tackle it:

[edit] Cut up all but one of the cards. They may need it in an emergency.

1) Create a detailed budget to determine how much they can afford to pay off per month. This should be a no-frills, austere budget that they can stick to for a couple of years. This budget should allow for a monthly contribution to an emergency fund.

2) I doubt they will qualify for a LOC, however they should be able to get a consolidation loan. The term should be as short as possible based on what they determined the can afford monthly from their budget. This loan should only cover the amounts from the two high-interest cards.

3) Now for the difficult part ... STICK TO THE PLAN. Typically people who run up credit usually are not very disciplined. Spending for the sake of spending usually comes from something that's missing in their life. They should focus on figuring out what that is, getting professional help if necessary. Some shop out of boredom, depression, etc. The spending is just a symptom of something else.

4) Once the load is paid off, focus on paying off the 0% Credit Card. BTW, I've never heard of a 0% card. How did they manage this. Does the 0% expire after a period of time?

5) After everything is paid off, redo the budget with more money going into an emergency fund, general savings, and retirement savings. If there's anything left over, the could bump up their budget in other areas. 


*** Remind them how much freedom they'll feel once the loans are paid off. That may be incentive enough.


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## Financial Cents (Jul 22, 2010)

the-royal-mail said:


> 1. recognize and address the spending problem that created the debt (stop the leak)
> 2. Pay off the debt starting with the highest interest cards first. (mop up the floor)
> 
> Don't expect instant gratification. It will take time to pay off. And there is no need to bother with shell games.


Nicely said.

Keep one CC for emergencies only - but lock it away from him/her so they cannot get at this themselves.


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## Oilers82 (Jan 17, 2011)

Thanks guys! Seems like no magic formula, just gotta bear down and get rid of it. This is all solid advice and makes perfect sense.

LOL @ the-royal-mail I swear its not shell games, this is actually advice for a friend. I'm doing alright with my one credit card = ).


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## the-royal-mail (Dec 11, 2009)

You are correct in that this is a matter of simply paying back the money. That's the bottom line in any debt situation. It's painful, tedious, boring and very necessary.

Actually when I referred to shell games, I referred to all this consolidation and shifting around of debts etc. I find in many cases people get themselves in these situations and then immediately start shifting around the debt to various other accounts etc and not really adjusting their spending etc. My point was that I didn't want your friend to take such advice and that they would be best served by simply paying back the loans starting with the highest interest.


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## slacker (Mar 8, 2010)

This topic has been discussed numerous times, please use the "search" function to find more information before posting.


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## Oilers82 (Jan 17, 2011)

the-royal-mail said:


> You are correct in that this is a matter of simply paying back the money. That's the bottom line in any debt situation. It's painful, tedious, boring and very necessary.
> 
> Actually when I referred to shell games, I referred to all this consolidation and shifting around of debts etc. I find in many cases people get themselves in these situations and then immediately start shifting around the debt to various other accounts etc and not really adjusting their spending etc. My point was that I didn't want your friend to take such advice and that they would be best served by simply paying back the loans starting with the highest interest.


HAHA oh I thought shell games = you thought i was pretending to have "a friend" in all this debt trouble haha.


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## Guigz (Oct 28, 2010)

mind_business said:


> Everyone's suggestions above are good. This is how I would tackle it:
> 
> [edit] Cut up all but one of the cards. They may need it in an emergency.
> 
> 1) Create a detailed budget to determine how much they can afford to pay off per month. This should be a no-frills, austere budget that they can stick to for a couple of years. *This budget should allow for a monthly contribution to an emergency fund*.


I disagree with the bolded part.

What is the point of having an emergency fund if you are paying 19% on CC debt? 

When you get back in the black, you might consider this sound advice, until then , you are burning money away by doing that.


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## Addy (Mar 12, 2010)

We had 10K in consumer debt on our cards years ago. We found it a bit addictive to pay it off.... like losing weight... first have a small goal (i.e. cut up those cards) then take a bit bigger step like consolidating then a bigger step... and keep a log of what you owe each month, it helps instil a sense of success that is very rewarding. We paid off 10K in 1 year when we were both making a modest income, and it was so rewarding to see our debt go away and our savings start to grow.... to this day I still get a bit of a dirty thrill from checking our net worth


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## glenzacher (Aug 13, 2014)

*Get rid of credit card debt*

Hey!

In order to get rid of your credit card debts, i would like to suggest you to follow these steps:


Improve your credit score
Repair/obtain your credit reports
Ask for help from a financial advisory
Credit counselling
Learn credit management skills


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