becoming A credit card slave were did I go wrong?

Answer 1

First, cut up your cards and stop using them! Don't close the account though.

Second, call your credit companies and talk to the manager-or someone that can and WILL get your interest rates down to 0% or almost 0%. Don't take no for an answer. I had to tell them that I was going to switch to ------ company before they lowered my interest on my cards. your credit card companies don't want to lose you as their customer. Remember they've got you - they think!

Now that you have done that DON'T PAY LATE and ALWAYS pay as much over your minimum due as possible!

Also carefully check if they are charging for those so called "When you are out of work and cannot pay your bill---We will" insurance plans. They don't work I have tried it before, when my husband could not beg for a job I tried using this program and all I got was a black mark on my credit report and a closed account! These programs eat up your money also!

Make sure you don't have any credit card protection plans charging money from your cards also. credit card companies should to be doing that service for you at no charge!

Also, Don't use those credit agencies. They also leave a black mark on your credit report. They say they help you with your credit but try to buy a home after using an agency and no creditor will want to help finance you. (Been there - Done That!) You can get the same results as they do and save your credit report!

Last but not least - after you have payed off your cards then only use ONE or TWO - ONLY CHARGE WHAT YOU CAN PAY OFF EVERY MONTH and YOU WILL SEE YOUR CREDIT SCORE JUMP HIGHER!

And GOOD LUCK!

Answer 2

Credit card debt can snowball to the point where you end up paying double what an item costs when you charge it. Paying your cards off in full every month is the only way to get ahead. Try cutting your expenses to see how much extra you can send to your credit card companies. If you cannot send more than $100 extra each month, you may wish to try credit counseling.

Answer 3

As a former financial counselor, I know first hand the damage that credit card debt can do to a person's finances and family. Marriages end in divorce because of finances! But someone who uses credit cards repeatedly usually has a hard time "quitting the habit" so to speak without some major motivation. You recognize that you are in a little over your head with credit cards and thats the first thing you have to do, recognize the problem. I can relate. Almost 2 years ago, I was swimming in credit card debt. I was so close to the limits on my accounts that every month, not only was I getting the finance charge, but also an over-the-limit fee to boot! I too was asking myself, where did I go so wrong? I didnt' even have anything to show for it. It was at that point that I made a commitment to turn my credit card dependency around and realized I couldn't do it by myself.

I realized this for two reasons:
1) My monthly payments were hovering at $100 each month. Guess how much went to the principal balance? probably $8! Thats right. With the high interest and over the limit fees, my payments were mostly going into the creditor's pockets! If you do some quick math, you will see that even if I stopped charging my cards, it would still take me over 50 years to pay off the debt. Those DKNY Jeans that I bought on sale last month, probably would have ended up costing me 10 times their value. But why didn't I make larger payments?
2) Obviously the regular average joe/jane can't make larger payments. My income wasn't increasing, and I wasn't going to make company VP any time soon, so all I could do was pay the minimum, while I watched helplessly as the balances remain largely unchanged.

These two reasons combine for a real mean combination that would knock anyone out for the count! And the embarrassing fact, was that here I was a financial counselor, giving daily advice to clients about how to get out of financial troubles. Little did they know the trouble I was in!

It was soon after that I decided to make a change in my life and here's how I did it: I called a credit counseling company myself and joined the program. It's as simple as that. But there are some things you have to remember if you decide to take this route:

1) Obviously the person above feels strongly against credit consolidation, and the industry itself has gotten a black eye because of misinformed individuals and smaller companies taking advantage of their clients. But today there are a few larger companies that are slowly weeding out the smaller ones. This is a good thing, because there are rules and regulations now in place to protect the consumer from fraud. In fact the one I was working for had a contract with the Defense Department so that it would refer its financially struggling soldiers to us for counseling. So if you find a company, make sure to check their BBB profile and accreditation sources.
2) Do you have alot of debt? Usually these companies feel it's only in your benefit if you enroll at least a minimum amount of debt to the program. In other words, if you only have $1000 of debt, it would probably be more beneficial to you if you paid it off on your own whenever you can make larger payments. My debt was closer to $14000! So it benefitted me immensely.
3) Are you willing to go without your credit cards? When you enroll in a program, ALL your credit accounts need to go on there. MBNA especially is picky. If you don't put all your debt with the exception of an emergency credit card on a debt program, then they won't honor your attempt at getting out of debt. In other words, they feel that if you are making an honest attempt to get out of debt, you will enroll ALL your high interest debt on the program. Having extra accounts open will only tempt you to get into more trouble. Its a good policy and I agree with it. So today, I can't charge a credit card until I complete the program or quit the program. Either way, I've learned to save for what I want!
4) Are you planning on making a major purchase? Okay so you go on the program, and a beautiful house has been listed in your dream neighborhood, and you have saved up enough for a down payment because of the savings you have from being on the program. Well hold on, because many lenders won't grant you a loan for that home as long as you're on the program. The person above is right about that, but the thing is this--if you are trying to get out of debt, why would you want to incur MORE debt in the first place? So don't do this program if you are planning on moving or buying a new car etc. There are particular lenders such as Wells Fargo that will work with debt consolidation customers, but you should ask the lender first if this is your situation.
5) No new credit cards! Thats' right. Don't even think about applying for any form of loan (credit card, private etc), because creditors that you have on the program, will boot you off just as quickly. This shouldn't even be crossing your mind, as that's the reason why you joined in the first place!
6) Lastly, the credit report. Many people have confusion on how this debt counseling will show up on the report. Well the point is it's noted by lenders for other creditors to see. That doesn't mean that your score will actually drop, but it may take two steps back before making a leap forward. Your payment history and revolving balances are a huge factor in your credit score and they will gradually increase to a level greater than where you were before because of your reducing balances and perfect payment history! yay.

So I guess this is alot of information to process. The point is you recognize you want out and maybe want something to do about it. If the balances on your slavery are low, then go for it and pay it off yourself. Patience is key. On the other hand if your balances were astronomical like mine, you may need a little extra help in paying things off. Credit counseling is a good idea then but keep in mind all the factors above. Regardless, recognizing is part of the healing, now act! Good luck.