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  Topic Review (Newest First)
02-03-2013 10:31 PM
MamaArmadillo

Between DP and myself, we have roughly 8 grand spread out over five different credit cards (that includes typical Visa, and in-store financing cards). We both just got into bad habits with our spending, and were never taught by our families how to handle money. Thankfully, we'll be paying most of our CC debt back with our tax refund this year.

02-01-2013 09:21 AM
kitteh

If it gets paid in full every month, I don't think it can be considered to be debt. I mean, it's always possible that something bad can happen--job loss or illness or something else catastrophic--that could prevent the card from being paid in full before the billing period ends. But I think that the way around that is to never charge more than you have available  in liquid assets.

02-01-2013 08:04 AM
JoyFilled

I have never paid interest on my credit card.

 

We put $4,000 to $8,000 a month on our credit card.

02-01-2013 01:24 AM
BirthIsAwesome

No debt at all, here :) I chose the "0-$999, joint card" option.

01-31-2013 01:18 PM
Quinalla We don't have CC debt (we do have revolving debt that we pay off each month, so that is partially why the $8k figure seems high IMO because that usually counts revolving debt), but we do have two car loans with low interest rates (0.9 & 1.9) and a mortgage. We mostly use CC for convenience and tracking, though the cash back is nice too. We are privileged to have good paying jobs and also live below our means and have quite a bit saved for retirement because of that. I would like to get to the point of no car loans, but it is one area DH likes to splurge on, so I think I will have to be satisfied with getting rid of mine. At least we can get excellent rates, so we aren't paying much interest.

And I agree that paying off high interest CC debt quickly is ideal, BUT definitely have a savings cushion so that an emergency doesn't put you more into debt.
01-29-2013 05:29 PM
rightkindofme

Even when I lived on $14,000/year I always had $3,000 in the bank. You never freaking know what will happen. Beyond that I didn't worry too hard unless I had a goal. These days I'm trying hard to get to where we have six months of take home in the bank. My husband makes a lot of money. We don't have that much going spare. 

 

At this point I start freaking out if my checking account gets below $6,000. I don't like to be at $5,???. It's too low. We have months where our credit card automatically takes its own payment and it's $12,000. Mostly I like to keep our checking account above $15,000. That's almost two months of income in checking. Right now savings is at $19,000. So we definitely have four months of income in the bank. I have asked my husband to stop working any extra jobs this year. I need him to spend more time with the kids while they are little. He comes from a long line of workaholics but his dad has basically not ever worked. My husband's family used to basically own a town in Texas. Here sits in the silicon valley as a programmer. He's very antsy to really make a go of making a project of his own. I find this terrifying. I know the odds of him succeeding are less than 7%. Realistically. But if I never let him try then he will carry that ghost for the rest of his life. 

 

I asked him to give me till the baby turns three. Be *here*. Don't have other things on your mind. Think about us. Learn your kids. I feel weird about having to demand it. If you want a relationship later when they are more your speed then you have to put in the work to be nice to them when they need you. Mostly he's a good dad. His explanations are a bit long-winded. :)

 

It is interesting to experience the difference between literally not being able to spend money and trying to choose not to. It's a different kind of self-discipline. I find that knowing that I could buy whatever random thing makes it really hard not to. When I was a kid if I found money on the street I had to spend it before I got home or someone would steal it. Now being impulsive with money is antithetical to me reaching my goals. I have little bits of splurge money. But I get $100/month. My friends with jobs and real money of their own don't understand why I choose to be so restricted. 

 

Now I'm supposed to know how to act like an upper class person. No one writes a forking rule book for this stuff. 

 

It's really weird how in some ways I act like my mother and I act like the polar opposite of my mother. (I have a very bad history with her.) But I act like her ancestors. I act like her story of who she is.

 

And now the kids want me. :)

01-29-2013 05:22 PM
alaskanmomma

Credit card debt? Eh, it's about $800. Debt in general? I bet about $8k. $5k of that being student loans.

 

01-29-2013 03:43 PM
kitteh

I absolutely agree that having a grand or two in the bank while paying down debt is important. For me it is largely psychological, and fear like your husband's (which I totally understand and can relate to!) is debilitating and not empowering. I truly believe that when you feel empowered and free from insecurity/fear money tends to find its way into your life (and Suze Orman agrees!)

 

Another psychological aspect, and also a matter of habit--changing bad ones and creating better ones--involves not continuing to use credit as you are attempting to pay down debt. When you commit to not using credit, and have a savings account that can cover emergencies, I believe that the process of becoming debt-free is faster and easier.

 

I'm still sometimes tempted to give into the X-months Interest Free! marketing schemes, and dh is great about reeling me back in and reminding me that we can essentially get the same interest-free deal by saving up for the purchase and just using cash! So my own personal psychological paradigm shift is still a work in progress.

01-29-2013 03:27 PM
kathymuggle
Quote:
Originally Posted by journeymom View Post

 

Pfh. Listen to me, pretending to give financial advice.

bag.gif

 

That's Okay.  Experience is important. .  DH and I have agreed to keep 2000$ in saving for instant emergencies (car dies - that sort of thing). 

 

Anyway, Kathy, why would that drive your dh insane? 

 

It's emotional.  He has a fear of poverty (that includes a lack of savings in the bank) that I do not share.  Some of it is family of origin issues  - despite the fact we both come from relatively poor backgrounds, his parent craved money and felt its lack more than mine did .

01-29-2013 03:20 PM
Pepper44

We have about $6,000 in CC debt. Not from crazy purchases, just because there have been times when we didn't have enough money for a doctor co-pay or major house repair, and even some times when we didn't have enough for gas or groceries after paying all of our regular bills.  Being poor is no fun.

01-29-2013 03:12 PM
journeymom

Once again, my literal mindedness strikes again.  You're entirely right, you should be paying down the debt as soon as possible, with as much money as you can spare.  However, 1) don't sink your whole savings into the credit debt, keep some for an emergency.  Depending on the size of your savings, keep as much as 3 months living expenses, or at least $1000 for car repairs or plumbing disaster or whatnot. And 2) even if paying off the credit cards is a multi-month or multi-year affair, continue socking away a portion of your income every month. Pay yourself like you are a creditor.

 

Pfh. Listen to me, pretending to give financial advice. bag.gif 

 

Anyway, Kathy, why would that drive your dh insane? 

01-29-2013 01:48 PM
kathymuggle

Huh.  I figured most people would advise using the savings to pay the debt - as savings only have an interest rate of  2-3% a year, while my visa costs me 13% or so in interest per year. 

 

From a straight dollars and cents perspective, it makes sense to use my savings to pay off the debt.

01-29-2013 01:41 PM
journeymom
Quote:
Originally Posted by kathymuggle View Post

We also have some savings and a fair amount of equity in the house, so it is all good.  I know I should get rid of the saving and pay off the credit, but that would drive Dh insane.  I also know that if we used the savings to pay off the credit, we would not build the savings back up very quickly.  The debt, with its nasty interest rate, actually forces us to budget a bit to get it paid off.  

 

 

You lost me there! Sorry, it's that time of day, I need my second cup of coffee.  Why get rid of the saving(s)?  I agree, don't use the savings to pay off the credit.  That savings is your safety net, and any typical financial adviser (including Dave Ramsey) advises you to pay into your own account monthly. 

01-29-2013 11:22 AM
3timesamom

BennyPai, It was a long road to get out of debt. Still my husband tries to drag me back in. I wish you luck!

01-29-2013 09:16 AM
kathymuggle

Around 8000.  

 

About 2/3 of it was for a dog (who turned out to have fatal cancer and died anyways…..but I do not regret trying to save him).  Not my new doggie, for those who read about Cleo on another thread - she is fine. love.gif


The other 1/3 was for my daughters orthodontia - a well thought out and non-impulse move.

 

I am actually glad I can access credit when I want/need it.

 

We also have some savings and a fair amount of equity in the house, so it is all good.  I know I should get rid of the saving and pay off the credit, but that would drive Dh insane.  I also know that if we used the savings to pay off the credit, we would not build the savings back up very quickly.  The debt, with its nasty interest rate, actually forces us to budget a bit to get it paid off.  

01-29-2013 07:07 AM
mmace

No credit card debt here - no debt other than mortgages.  We both had first marriages that ended with us holding a big bag of debt, and we both dug out of that and had no credit card debt before we ever found each other.

01-28-2013 07:19 PM
journeymom

Does it count if we declared bankruptcy and have no debt?  We recently got a joint, prepaid card for $1,500.  We've used it once and paid it off, for the express purpose of building some credit.  Prior to the bankruptcy we had $12,000 - $15,000 credit card debt.  This whole bk process was/is just miserable and I'm scared straight.  I'm never going there again. 

 

2013 is truly a year for starting over for us.  I'm pretty excited!

 

 

Quote:
Originally Posted by BennyPai View Post

Ours is nowhere near that amount, but still much higher than we'd like, and the feeling is awful.  Right, now DP and I are making some hard life changes to put us on track to being debt-free and finally experiencing that feeling of freedom 4 years from now.  Please wish us well!

 

I wish you all the best! 

 

Really, everyone working their way out, working hard to stay out of it, go you!! thumb.gif

01-28-2013 02:02 PM
IngaAnne

In my late 20s, I had over 10k credit card debt, plus car payment, plus a mortgage on my own. I got married at 30 to a man who also had some CC debt, car payment and his own mortgage. Somehow, we managed to pay off all the CC debt shortly after marriage (and after carrying two mortgages for 7 months and paying for a wedding!).

 

Now at 36, we've had zero CC debt for several years. If we use the card, we pay it off within a month. Both our cars are also paid for now. The big problem is our house, which is worth less than we owe plus we've been paying off a loan for a sump pump and trench drain we had to have installed about 5 years ago. We have to work hard to stay frugal and not spend money we don't yet have, but it's very worth it not to have that extra debt hanging over our heads.

01-28-2013 10:24 AM
BennyPai

Ours is nowhere near that amount, but still much higher than we'd like, and the feeling is awful.  Right, now DP and I are making some hard life changes to put us on track to being debt-free and finally experiencing that feeling of freedom 4 years from now.  Please wish us well!

01-27-2013 08:00 PM
3timesamom

0

01-27-2013 09:48 AM
rightkindofme Heck yes. I never have to pay my October bill because cash back covers it.
01-27-2013 09:05 AM
A&A
Quote:
Originally Posted by rightkindofme View Post

We pay it off every month. In a month we spend between $1400 on credit and $12000. Some months really blow my mind.

 

 Hopefully you're putting that on a cash-back card.  

01-27-2013 06:27 AM
sarafi

I voted $8,000, BUT it's at 0% interest for another year and is all from current expenses so we didn't pay to transfer any money. Before this year we paid in full every month, right now we are aggressively saving and paying off a rather large car payment, and are using the money we would normally spend of gas/groceries/etc to pay off the car early. Four more months and that monkey will be off my back!

01-27-2013 03:10 AM
mcturner The number is high because it's an average, including Americans with no credit card debt alongside those with 35k.
01-27-2013 03:10 AM
mcturner The number is high because it's an average, including Americans with no credit card debt alongside those with 35k.
01-26-2013 09:14 PM
rightkindofme

We pay it off every month. In a month we spend between $1400 on credit and $12000. Some months really blow my mind.

01-26-2013 09:01 PM
justmama

Right now?  None.  It's been that way for about 3 years.  HOWEVER 6 years ago I had my single credit card maxed out at $5,500  I also had a car payment.  I cancelled the acct, cut it up, and started paying it down.  Took me 3 years but I paid off both and we've been debt-free ever since.  I haven't had a credit card since that day 6 years ago.  Credit cards scare me.  So total with credit card and car, I think I had about $15K in debt at the time.

01-26-2013 07:32 PM
esenbee2 DSp let me quit working my 3rd shift job before having found another one in order to finish school because I was so drained all the time and falling asleep at work. It took a while to find a job and we had to put half our bills on credit card for that time period. We were pretty good until that point. It's like quick sand. I have since finished school, gotten a much better job, and we are living more consciously. We have signed up for ReadyForZero.com and have paid off 1 of 13 cards so far. Our plan is to have 11 more paid off in the next 12 months. I am so happy to have found ReadyForZero. They make it very easy to visualize all of your debt, how long it will take, and how much you will save.
01-26-2013 06:40 PM
erinmattsmom88

Our debt is more than just CC's. We have about 9K out there right now total. Two-thirds of it is DP's IRS debt. The rest is broken down into 3 small CC's, a medical bill, and a furniture payment. By my calculations, all should be gone by summer 2014... at the latest. Hopefully this spring/summer will be busy at DP's new job, so maybe we can be quicker about paying stuff off.

01-26-2013 11:55 AM
TiredX2
Quote:
Originally Posted by LoveOurBabies View Post

I keep reading that the average credit card debt per person is around the 8k mark. That sounds a little high to me..

 

 

 

So, I dug into this number a bit:

http://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/

 

According to this site, the $7xxx number is actually *household* debt.  What I find more interesting, though, is that that is an average number. Only 46.7% of households actually carry a balance.  So, for 53.3% of households the credit card debt would be $0.  Then, for the remaining group, the average household debt it $15xxx.  So, the MODE (most common) amount of credit card debt for a household would be $0--- there is just a sizable minority that might carry a LOT of credit card debt.

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