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Scott,
I've been living above my means for years,
using credit cards to pay for the difference from what I make and what I spend.
I can't be in denial much longer as the cards are getting to their max. I currently
don't have any past-due payments since I still use the credit cards to offset
what I can't pay. What do you recommend I do?
I was thinking of going to the credit card
companies and letting them know that I'm struggling, to see if they would stop
charging me interest, but I'm afraid of losing a good interest rate or the
payments going up as they'll mark me as high risk. I just don't want to go
through the harassment I've heard other people have gone through with them calling
or trying to go after what you own or your paycheck.
I have 2 homes. I downsized with the second
one, but that backfired when I couldn't get rid of the first one. So it's renting
right now for the majority of the payment, and I have no equity in any of them.
Please let me know ASAP what you think, as I
need to do something before it's too late. : (
Kate
Kate,
Don't worry about the past. Just go forward today,
and make the best decisions for saving money. As Tony Robbins says, "The past
doesn't equal the future."
I would NOT call the credit card companies and
tell them you're having problems. They don't care. In fact, they would probably
stand ready to make things worse. You want the credit card companies to think
that you are in perfect shape--that you're the best possible customer. That's
the place to be when trying to negotiate with them.
You don't want to say, "I'm struggling and I have
no money so I won't be able to pay. Please, I beg you, cut me a break." Ha, ha.
Like they'll have any mercy. They'll be thinking to themselves, "The first time
she's late, we'll raise her rate to 30%. And, since she's in trouble with her
credit, she won't be able to get any new loans to pay us off. We'll have her
trapped!"
If you call, tell them this, "Gee, I'm tired of paying
your high rates. Either you give me a break on these rates, or I'll take my
business elsewhere. You can see that I'm never late, and I always use my card. So,
if you want to keep me, you must treat me better. I have many options because I
have good credit."
See what I'm sayin'?
If they don't give you a break, then you
should transfer your balances to other, lower-rate cards. You can find my
recommended list at
http://www.debtsmart.com/cards/
Next, you should take a super-close look at your
spending. Track it all. Make a list and find out where all the money is going.
Look for ways to cut. I know, I know, easier said than done. Just give that a try
for a while and see where it takes you.
Also, liquidate any unneeded or unused assets
like jewelry, bonds, etc. and pay off the debt. Get that monkey off your back.
Ultimately, it's best to handle everything
yourself if possible. Stay in control, and take back your financial life! You've
already taken many first steps--keep it up, and you'll see the results you want.
Best,
Scott
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Excellent! Why I've
been there and done that. Scott I purchased your books
and used them to great advantage. I've not had to pay
any interest on credit cards for two years now. I'm down
from $35,000 in credit card debt to $10,000 in 24
months. Thanks a bunch!"
--Rich
Garay |
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