How do you get out of debt?

Go to your bank and consolidate your cards. then tear them up – thats what I did. it took me 4 years to pay off ten grand (with a co signer) but I did it. I now have one card and I am commited to paying it off when ever moneys put on it. My husband did up an excel sheet for the bills and has them balanced so they are evenly distributed between pays. Yes you will be stretching your dollars for a while, but its all worth it in the end. I also have a savings account that takes 10 bucks off my pay and socks it away – not much, but once n a while I could buy a treat for myself. I have have way more money to myself now and I still sock a good chunk of it away to that savings account and only buy large things in cash. – you are supposed to go from small to large when it comes to paying it off, but really just get them consolidate its much easier.

Big disclaimer: I’m Canadian, I don’t really know how your credit score works in the States, the following knowledge is based on my Canadian experiences and may vary for you.

1. Stop getting credit cards. No new ones, period. No credit increases either. If you are given an increase, either don’t use them (requires a lot of willpower) or request that they lower your limit back down to where it was. If you are given a card, call them up and request they close your account, or cut up the card.

2. Consolidate your debt. Either do it on your own or get a financial adviser to help you out. Make a list of all your credit cards, the balance owing, and the interest rates. Transfer your balances as much as you can such that you have a big balance on a low interest card, and low balances on high interest cards. Close any accounts that are now empty, pay off the high interest cards as soon as you can and close them down as they empty too.
Pro Tip: It never hurts to ask for your interest rate to be lowered. Give your credit card company a call and see what they say.

3. Pay off that big credit card balance. Make a budget for food and stick to it. Stop buying shit you don’t need. Freeze your credit cards in a cup of ice and delete any saved credit cards on any online shopping sites – that way your card still exists if you need it, but you cannot make impulse purchases on them. Get a second job. Make a budget for your entire income, look truthfully at where you’re spending your money, and cut out the crap you don’t need to be spending money on. Reduce your TV bill by canceling premium channels, or cancel it altogether and find other ways to entertain yourself (hint: libraries offer free DVDs and often have a system where you can have other branches’ stuff delivered to your branch for free). Pay off the credit card with as much money as you possibly can and do not put even one penny back onto it.

The biggest problem with paying back debt is willpower. Willpower to not spend money on a take out meal and to be happy with beans and rice for dinner. Willpower to not buy that cute purse when you have ten others at home. Willpower to not pull out the plastic (that’s why you freeze it in ice!). As long as you can conquer your willpower, it’s just a matter of numbers.

It’s all about personal responsibiity. Your question reminds me of how teen mothers say it just happened.

Don’t get me wrong, it happens to most of us when we are young and oblivious (pregnancy and debt) I can remember America BV (before Visa). People still got into money troubles but it was more public and embarrassing. You could go to a finance company and take out a loan using anything you owed as collateral. If you got behind a truck would pull up in front of your house and take away the living room furniture or whatever.

Also there were usury laws that prevented double digit interest rates. 25% interest was for loan sharks. When your rates are that high it is like going on a starvation diet while living in a bakery. Sooner or later you will fail.

I couldn’t have graduated from college without plastic, but my idea of a treat was a meal in the mall food court and a movie with my daughter a couple of times a year. However when I cleared that debt, that was it. I still use my plastic but it is paid off every month. When my car died, I didn’t go in and take out a 5 year loan on a $25,000 vehicle. I took the bus for two years and paid $8,500 on a good used one which I am still driving 10 years later.

I haven’t had to worry about losing my job or stay in a job I didn’t like. Think before you swipe and you will be able to have anything you need and your biggest treat will be financial freedom.

Everyone ^^^^^ has given you some really great advice, so I will only add/reiterate a few things….

*Quit buying crap. Understand the difference between a want and a need. You won’t ever get out of debt until you embrace this concept entirely.
e.g You don’t need cable….

*There are two schools of thought as to what order to pay off your debt. Regardless of which one works best for you, you should be making minimum payments on all of you debt to stop the hemorrhaging.
1. Pay off smallest debts first. This gives you a psychological advantage in which you are knocking off debt and decreasing the bills you are getting quicker.
OR
2. Pay off the highest interest rate debt first. This ultimately is the best use of your money and will pay off your debt in the most financially efficient way possible.

Whatever you do, do something. Good luck.

I agree with snoopy about the two trains of thought, I would pay off the small debt first and apply that payment to the next debt, then you’ll pay off the next debt quicker, keep applying those extra dollars to all your debt. And freeze your cards, like dynamicduo said. Also, buy everything with cash, it is so much more tangible seeing your money disappear that way.

miasmom, that’s part of Dave Ramsey’s financial peace program and is known as the snowball effect.

Get rid of the credit card and learn to live within your means.
Go Op Shop shopping for clothing and visit you local fresh food markets.

@mij What is “Op Shop” shopping?

yes, dave ramsey has great wisdom if you are SERIOUS about getting rid of your debt, but you have to have a strong desire to implement it, not rocket science, but it does take determination

@Snoopy I know you asked mj, but they’re in another time zone.
Might take longer to get a reply. An op shop is like a thrift shop.

@Nimis. huh. I learn something new everyday.
thanks!
:)

Sure thing!. :)

If your need credit card help for huge debts, the agencies that can help you solve your problems are debt consolidation agencies, debt management companies, and don’t forget your relatives from whom you can borrow money to pay off your credit card debts. If you don’t know what to do, a credit card counselor is your best option to guide you how to solve your financial problem.