Debt

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42 Personal Stories of Credit Card Debt Hell

by Mark Lima on June 29, 2010

It may start out as a very small indulgence. The sale is unbeatable and money won’t be a problem at the end of the week because it’s payday. But the credit card bill doesn’t get paid off.  Or, perhaps it’s a true necessity. A medical emergency, car repair or house problem that needs to be taken care of so it’s put on the credit card. It may even be due to a sudden drop in income, savings are used up and the credit card is a last resort for making ends meet.

Whatever the starting point, the end result is massive debt. It is a self-feeding debt that continues to grow. These stories highlight the debilitating debt spiral. They also provide glimpses of hope and victory as people have started taking charge of their finances and building a credit card debt free future.

  1. Master Your Card :Are you a credit Card junkie?  Are you hooked on credit?
  2. Mother Jones: Credit card companies unwilling to help customers when victims of fraud.
  3. A Day Late and a Dollar Short: Paid off over $23,000 worth of credit card debt in just 18 months. This blog helps others to rid themselves of debt
  4. Ask Mr. Credit Card: Interview with a student drowning in $15,000 of credit card debt.
  5. Smart Balance Transfers: Credit card horror stories part 37.
  6. Get out of debt: Only making minimum payments and drowning in debt. This individual went bankrupt after economy tanked in 1990 and his real estate company failed and has worked back to financial freedom.
  7. Credit bloggers: The nightmare of co-signing a credit card.
  8. WiseBread: How debt fools people.
  9. New Credit Rules: Credit card horror stories.
  10. Americans for fairness in lending: Credit card horror stories from around the country.
  11. Fun Times Guide: Store credit cards and how they can hurt you. They offer rewards upfront but can hurt you in the end.
  12. Finance and fat: Follow the financial journey of an individual $265K in debt.
  13. Get rich slowly: Drowning in debt resorting to payday loans and paying bills late.
  14. The amateur financier: Confession time, credit car debt, lost job and the bills started mounting.
  15. Blogging Away Debt: When we finally decided to shape up our financial life in February of 2006, our credit card debt was over $37,000. How can someone let their debt get that high?
  16. Women 24 : Drowning in debt article and comments.
  17. The Simple dollar: In over her head in credit card debt and personal loan to tune of $60,000 and growing.
  18. Frugal Dad: $80,000 in credit card debt, wondering where to start?
  19. Maxed Out Generation: This blog explores the human side of debt, what the credit industry doesn’t want us to know, and strategies for survival.
  20. Personal Finance by the Book: Personal Finance by the Book: When this couple married they had an average income and $21,500 in debt.
  21. Learning Curve: a love hate relationship with credit cards
  22. Rich Credit Debt Loan:The average American household has $8,000 in credit card debt.
  23. Youth Success NYC: Maxed out and shopped until she dropped into debt. Her debt problems started when she went to college and got her first credit card.
  24. McClatchy: College students’ credit-card debt spurs concerns. 24 percent have used their cards to help pay tuition.
  25. Salon:Big fat unpaid credit card debt, $500 a month to keep up minimum payments.
  26. Stop payday predators: the vicious cycle of taking cash advances from major credit cards to try and pay off payday loans.
  27. Card Ratings: Student credit cards a recipe for disaster.
  28. Clearpoint Credit Counseling Solutions: Credit card problems affect the well educated with good incomes.
  29. Budgets are Sexy: Check your credit card statements to make sure no unauthorized charges.
  30. Bundle: His credit card spending was out of control. At $5000 and climbing.
  31. Legal Helpers: 10 bad habits that lead to financial disaster
  32. Dollars & Sense:Credit card debt a disaster waiting to happen
  33. Live Cheap: Debt is a monthly payment trap.
  34. Debt Free Adventure: How much the interest on their debt was costing this couple monthly and why they got mad at debt.
  35. Inside Higher Ed: Long distance Mom drowning in credit card debt after medical emergency
  36. Debt Kid: Digging out from under $300,000 in debt.
  37. Money Stance: Follow his progress as he digs out from under half a million dollars in total debt.
  38. Rather Be Shopping: How she got out of credit card debt up to her eyeballs.
  39. Opposing views: College students drowning in credit card debt
  40. Liberty Consumer Services: He remembers his first credit card purchase, but he doesn’t recall when things got out of control. Soon he had two or three Visa cards, several catalog and department store cards, and a gas card. They were all maxed.
  41. The Debt Hawk: During undergrad and law school, he put emergencies onto my shiny new credit card and racked up $20,000 in debt.
  42. Young Money Talks: Credit card companies exposed as they charge large fees to students already struggling to pay off $20,000 balance.

Categories: Credit Score

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How to Snowflake your Debt and Improve Your Credit Score

by Kerri Spencer on June 22, 2010

When it comes to paying off debt, there are a number of different approaches and theories. One method of paying off debt and improving your credit score, for example, is known as the “snowball” method. In this method, you pay a little bit extra each month to your credit card with the lowest balance. Once that card is paid off, you send it’s entire payment plus the extra to the next highest balance credit card. Thus you “snowball” your debt reduction.

Another method is known as the “Snowflaking” method. This method of paying down debt relies on a different tactic. It is somewhat based on the snowball method, but with an added twist. It uses something called “micropayments” to rapidly reduce your debt.

Here’s how Snowflaking works:

  1. Make sure it works with your credit card company. Snowflaking relies on making multiple payments to your credit card company each month. Usually, you can make these payments several times a month, and they will all go toward paying off your balances. Make sure, however, that you check the credit card agreement. Some companies may have a sort of fee associated with multiple payments.
  2. Use irregular snowflake payments. This is how you’ll really see things get moving. Let’s say you decide to pack your lunch instead of going to that deli and getting the $8.50 sandwich and chips special. Make a payment of $8.50 to your credit card right then. If you work an hour of overtime, send that one hour’s worth of extra pay to your credit card company.
  3. Turn snowflakes into a snowball. Follow the snowball principle here, too. Once you’ve paid off that lowest balance credit card, start sending snowflakes, as well as the minimum monthly payment, to the credit card with the next highest balance.

Snowflaking is quick and easy. If you’re smart about it, you’ll make your snowflake payments via an electronic draft from your bank. This way, you’ll save on the cost of stamps, too.

If you want to rapidly reduce your credit card debt and improve your credit score, start Snowflaking today.

Photo via Muffet

Categories: Credit Score

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Top Credit Score Myths

by Kerri Spencer on June 17, 2010

When it comes to your credit score, everyone has an opinion. Some folks tell you that you need to have many credit cards open in order to have a good credit score. Some folks tell you that you need to be wealthy in order to have a high credit score. Some might tell you that credit scores are almost random, and that there’s very little you can do to affect yours.

The fact of the matter is that you can’t always believe what you hear about your credit score. Some things just aren’t true at all, and knowing some of the myths will help you to do what you need to do in order to improve your credit score.

Here are some of the most common credit score myths:

  1. The more money you have, the better your credit score. This is utterly false. Your income has nothing to do with your credit score at all. Yes, if you have more income, you’re more likely to pay your bills and to have a better credit score, but no one looks at your income to determine your credit score.
  2. Having a good credit score requires a bunch of debt. This isn’t true, either. In fact, people who have the very best credit scores – over 800 – tend to have less debt than people with scores in the 700s and 600s. Instead, they paid their bills on time, and they held onto their accounts longer. In fact, you should never have more than about 30 percent of the credit available to you in use.
  3. You’re better off without any credit. This isn’t necessarily true, either. The fact of the matter is that even your car insurance company can look at your credit score to determine your rates. Having a good credit score can help with things like employment, too.
  4. No credit history means a poor credit score. Now, don’t misunderstand us. If you have no credit history, you’re not going to have a credit score above 800. Instead, your score will probably start somewhere in the 600s. This is an average or just below average credit score. To actually get a poor credit score, you need to miss payments and get far into debt.
  5. It’s almost impossible to raise a poor credit score. This is untrue, as well. Even if you’re down in the 400s or 500s, you can raise your credit score. In as little as a year, if you make all your payments and reduce your ratio of credit to actual debt, you could raise your credit score by as much as 100 points.

Photo via OliBac

Categories: Credit Score

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