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Old 03-11-2010, 12:33 PM
Piedmont Piedmont is offline
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Join Date: Mar 2010
Location: MA
Posts: 6
Default Re: $15000 credit cards debt what do i do

I just don't think $15,000 is means to call for bankruptcy. Not when there's a person in another forum posting $140,000 in debt and going to commit suicide and wants to know how it will affect the family. The typical person is I believe $28,000 in debt, you are already ahead.

Here's how to do it. And the numbers are priorities, if say #5 will cause you to break #1, you can not do #5.

#1) Your goal is to avoid having to use the credit card, it is not to pay it off as soon as you can. Remember that goal... if you avoid using it the rest falls in line automatically.

#2) Make sure you have 100% direct deposit to your debit account.

#3) Build up a cash/debit account. You can not avoid using the CC until you build up cash in your debit account (checking/debit). Don't even think about it. Keep using your credit card, paying the minimum until you accrue 3x more than you typically spend/month in your debit account. It's going to cost money to save money.

#4) Once you have 3x more in your debit account than you typically charge/month setup an automatic fixed online payment and make it conservative. If your minimum payment is $300/mo setup an automatic payment to pay $400/mo even if you deposit well over that. Remember the goal, it's not to pay it off soonest but to avoid using it.

#5) Your debit account should on average grow each month, if it's not growing you need to reduce your payment (but not below minimum). You will have things like Christmas, birthdays, surprise car repairs. It never fails when your debit account grows to $2,000 you'll get hit with a $1000 car repair. It's okay, as long as you didn't need to use your CC.

#6) Use your debit card for all purchases.

#7) If your debit account accrues a lot of money like $3,000 that's when you enter a manual additional payment to the credit card and don't be crazy like put $2,200 to it bringing you back to nothing. This is lower priority than #5.

#8) If you get in trouble like have $2,000 in your debit account, and you must make a $3,000+ purchase put $800 from your debit card towards it (don't break rule #3) and charge the rest. Then stick to the plan it will all work out.

Cheers!
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