DebtSmart® Column Home

(Begin Article)

Scott Bilker is the founder of DebtSmart.com and the author of Talk Your Way Out of Credit Card Debt, Credit Card and Debt Management, and How to be more Credit Card and Debt Smart. Send your questions about money, credit, loans, mortgages, or debt, to him at: Scott Bilker, PO Box 563, Barnegat, NJ 08005-0563 or online at: http://www.debtsmart.com/askscott

Scott,

Help please! I heard you on the radio and what you had to say made sense to me. I am so far in debt and can't seem to breathe. I have six credit cards with $25,000 of debt.

I know you hear this all the time, I have been paying for over two years not charging anything and still can't get anywhere. I cut them up two years ago, and called the companies to ask for a lower rate. They gave me like a year with low interest, and lower payments so my credit reports would not be hurt.

Bottom line, my credit report looks so bad, we can't even refinance our home. I am in so deep that if I had a pill I'd take it! When I called a company to help me all they wanted to do was charge me more money that I don't have. I am not sleeping, and just don't want to leave my home. I own my own business, and I am just asking for your personal help. Please, please help me.

Thank you,
Stephanie

Thanks for writing (and listening)!

Sorry to hear how much your debt burden is affecting your health. I can certainly understand how you feel. Knowing that you owe money, expensive money at high rates, can certainly stress-out anyone who wants to satisfy their financial commitments.

As you are probably aware, getting out from under this debt will not be an easy, one-step solution. It's an ongoing process that will take years of focus, attention, planning, and work.

The broad picture to getting out of debt is three-fold: (1) Get organized financially; (2) Manage your current debts efficiently; and (3) Get more money!

Since you own a small business, I have a feeling you are fairly organized. Briefly stated; files, worksheets, list of all the debts and bills.

It's number #2, efficiency with your current debts, that requires some more work.

You already mentioned that you have tried to call the banks and get them to reduce interest rates. You may want to call back and give them one last chance. If the first rep cannot help you, then ask to speak to a supervisor. If they do not lower the rate, then you need to punish them! You need to spank their bottoms, well, bottom lines.

Apply for new credit. Do it now. Another bank will give you a chance. Even if the rate is not that great, meaning that it is not lower than your current cards, get the new card anyway and transfer your balance to teach your current banks a lesson. After that it will not be long before all your credit card banks start competing for your business!

The key to all of this is taking action. Start applying for new credit right now. You need to have the same amount in available credit as existing debts, to create enough competition among your cards to keep rates low.

The best deals, and I mean lowest rate offers, will originate from your existing credit accounts. Don't cut up your cards, because when you do that you're cutting out your options.

You will need $25,000 of available credit so you can transfer all your existing debt to new cards. Believe me, when those banks that just got paid off realize that they're not making any money from you, they will send a low rate offer pronto!

Lastly, in the overall scheme of what is important, your debt should not make you feel unhealthy. Try to get back to sleeping. Relax. It will all work out. "Everything for the best," as Martial Arts Grandmaster Jhoon Rhee would say.

(End Article)

Reader comments about this article:

"I liked everything about this article, because I had a similar problem and I follow all the information that I was given and my debts are almost paid off." 
--Betty J. Campbell

"The advice is practical and down to earth. I am still paying off a credit debt my husband incurred without my knowledge on my account before he died. Thanks to tips I got from reading your newsletter in previous years I am repaying with low monthly payments interest free! DebtSmart is full of great ideas and handy hints. Everyone who ever struggled with credit will find at least one idea to help them climb out of debt and live debt free eventually. I have only $16,000.00 to go all debts combined and I am home free!" 
--Karen Cournoyea

Copyright ©2024 Press One Publishing. All rights reserved. Use or purchase of any material at DebtSmart.com including but not limited to books, articles, and software is subject to the following  disclaimer/warning.