Thanks to the School of Hard Knocks, our family has had a lot of experience on the Road to Debt and on the (hard, gravely) Road to Getting Out of Debt. We are now, thankfully, a cash-only family, but we know that at any time our one income could become no income. (Why, that would be downright familiar -- we were just there in the fall!) Even though credit cards are not something any of us love, they are sometimes, in our society, a necessary evil.
If you are realizing how badly you need to get out of credit card debt, but are under the burden of a high interest rate, this is a frustrating time, isn't it? Credit card companies are lowering available balances and making it harder for us to find a 0% credit card deal. This tightening of their corporate belts is due to the current economic crisis, but also thanks to the new credit card reform bill, straight from the White House (the Credit Card Accountability, Responsibility, and Disclosure Act of 2009).
The reform bill was designed to help us as consumers, but it also added a financial burden to credit card companies. As a result, they are becoming more strict with balance allowances and with lower interest rates.
Don't lose hope! We just need to do a little more homework than we had to do in past years. Here are a couple of ways to get out of debt faster:
- Don't use a credit card anymore. I know, I know, that's easier said than done, and it may not be possible right now. But I'm telling you from experience that when you wait and pray for something (and, sigh, wait and pray some more) , it will often fall right into your lap for free or for super duper cheap. You will be amazed! Sometimes - often - you find that you really didn't need that thing after all.
- Find the best balance transfer credit cards. A "balance transfer credit card" is, yes, simply another credit card, but one that offers a perk for transfering your existing credit card balance to their company. Often, that perk is a 0% interest rate for several months or so. When you transfer balances to a 0% interest rate, you'll be able to breathe a little easier as you save money on interest rates, and, happily, the time it takes to get out of debt is reduced.
There is so much more to be said about saving money while in debt! Lately, I've had a lot of ideas swooshing around in my head about finances, but I haven't wanted to blog about it because this isn't a finance blog or a saving money blog. But the nagging thought is, how can I live a "just, pure, lovely" life if my mind is overwhelmed with the debt load I carry? I'm not sure where it all will go, but I'm jotting down notes as quickly as I think of tips and tricks regarding finances. Maybe it will be a future blog series or an ebook (ack!). Meanwhile, I'd love to learn from you, too...
Do you have any tips on getting out of debt or making debt easier to bear?
Lori,
Right now I do not have a comment except to say I will be watching for tips on these subjects, paying off credit and saving money. Seems like every time we have come close, something happens to subtract from savings and add to debt.
Mac
Posted by: Mac McFatter | June 22, 2009 at 07:24 PM
getting out - spend less than you earn - save and pay it down. Get used to living with less & below your means. Oh and lowering your housing costs. We own a home and rent part of it. Yes, we have less room and less privacy and the hassle of tenants etc. but we are not house poor - all of our money going to the house.
Nothing profound but now that we're debt free except the house I can't imagine having a debt burden.
Posted by: renee @ FIMBY | June 22, 2009 at 07:56 PM
Each and every time you are given a $5 bill, put it away in one large envelope. No matter what --- do not touch the $5 Stash. Set a time limit of how long you want to save (a year, three months, etc.) and decide what that money will go for. I did for a year and saved $775 (all in $5). It was a very pleasant surprise. (This is a great way to save up for Christmas gifts.)
Posted by: Dina | June 23, 2009 at 08:26 PM
Dina! I LOVE your tip!! I can imagine how that would add up over time. And so simply! Thank you so much for sharing. ~ Lori
Posted by: Lori Seaborg | June 23, 2009 at 08:48 PM
Lori, I've been lurking for months but decided it's time to comment. I really enjoy all the things you write about. I know the debt road all too well, but have been digging out steadily over the last few years. Putting away the credit cards is a HUGE one. I didn't think it mattered...but it is a mindset and made a big difference for my family. It's gratifying paying cash for something you've saved for and wanted for awhile. A good lesson for kids too, I think.
As for waiting, I had a funny experience last weekend. It was city-wide garage sales and I found a purse that I had wanted so badly but couldn't afford. The garage sale price of $4 ( and then 1/2 off as it was the last hour of sale) was much better than the $45 retail tag. It's amazing how God knows just how to put a smile on our faces with little things...so he certainly takes care of big ones too. Patience and prayer.
Thanks for adding some fun and food for thought to my days!
Posted by: Josie | June 24, 2009 at 01:38 PM
Josie, I love the story about the purse! That is EXACTLY what I mean when I try to tell others that living by cash only opens up doors for God to bless you. Instead of taking it into our own hands, providing for ourselves (credit card), we can wait and see if He just might provide the thing we need or want (like the perfect purse!). Who knows, right?
Thank you so much for unlurking. You've made my evening!
Lori
Posted by: Lori Seaborg | June 24, 2009 at 11:45 PM
Lori,
I'm thrilled that you mentioned the Credit Card Bill of Rights Act. At a time when more and more people are getting hurt by predatory credit card practices, this legislation -- and your blog post -- could not have come at a better time. As for ways to find better credit card plans and get out of debt, I came across BillShrink.com a little while ago and it helped me save $800 over the past two years. I wanted to point readers to their Bill of Rights comparison page that breaks down the Act and shows how different credit card companies will be changing their ways because of it.
In case it helps, here's the link: http://www.billshrink.com/credit-cards/bill-of-rights/. Great idea compiling those finance tips; you can never have too many ways to save.
Posted by: Linda | June 29, 2009 at 05:41 PM