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Getting Out of Debt
Penguin_Otaku
Registered User regular
Registered User regular
So for the most part, my parents are paying for my college to which I'm very grateful for.
Stupidly I was left with a credit card at the beginning of school which I abused pretty heavily. I'm at about 5,800 in debt right now and I don't like it one bit. Mainly because I don't want to open another card, but at the same time in case of an emergency I'm completely screwed. I maxed the one card I have out and failed to receive a credit line increase.
This screws me over because I can't afford to buy a book for class and I think of all the needless times I've gone out to eat on the card and well it kinda fucked me over now. Live and learn?
Anyway, I'm working about 9 hours a week during school which comes to something like... 250 a month. That's for personal use so I don't have to ask my parents for money.
I'm considering selling plasma to have something else to help pay for things/the card. My parents currently are willing to pay this but I hate making them do that because they didn't screw around with the card, I did and I hate it.
So I'm having a bit of a guilt trip right now and I want to start making a movement to paying this off because I know this is not a situation anyone needs to be in.
You guys have been a great help before and I hope that you guys continue to give out great advice for this. Thank you.
Stupidly I was left with a credit card at the beginning of school which I abused pretty heavily. I'm at about 5,800 in debt right now and I don't like it one bit. Mainly because I don't want to open another card, but at the same time in case of an emergency I'm completely screwed. I maxed the one card I have out and failed to receive a credit line increase.
This screws me over because I can't afford to buy a book for class and I think of all the needless times I've gone out to eat on the card and well it kinda fucked me over now. Live and learn?
Anyway, I'm working about 9 hours a week during school which comes to something like... 250 a month. That's for personal use so I don't have to ask my parents for money.
I'm considering selling plasma to have something else to help pay for things/the card. My parents currently are willing to pay this but I hate making them do that because they didn't screw around with the card, I did and I hate it.
So I'm having a bit of a guilt trip right now and I want to start making a movement to paying this off because I know this is not a situation anyone needs to be in.
You guys have been a great help before and I hope that you guys continue to give out great advice for this. Thank you.
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$5,800 at 24% interest (which is probably conservative) means that you'll be getting about $116 a month in finance charges. That's going to extend the amount of time it takes you to pay it back by a fucking shitload if you attempt to do it on your own.
What will hurt you the most right now is the destruction of your credit score and paying the minimum balance each month. Receiving dedicated help towards the payment of the card will prevent these problems from hitting you as hard. Being in debt sucks, sure, but it is better to owe family than credit card companies because family debt doesn't impact your credit score for many years to come.
Just so long as you see that "holy shit I'm an idiot with credit cards!" and don't screw it up again, you should be fine. You will also be required to pay the family back (even if they argue with you, force them to take it because you have to learn from your mistakes).
Murphy's Paradox: The more you plan, the more that can go wrong. The less you plan, the less likely your plan will succeed.
Hell, if you were my kid I'd be ecstatic that the obligatory "I'm an idiot with money and credit cards are evil" lesson is only costing $5,800. I know some people who have graduated from college with credit card balances in the $20K range. Just convey to the parents that you understand the mistake you made and it's not going to happen again, and if does you won't expect them to bail you out. I'm sure your parents would rather make this a teachable moment in personal finances than let you be screwed by a credit card company for the next 10 years.
Seriously though, you made a mistake that basically everyone who has ever gotten a credit card has made. And you recognized you were in trouble WAY before most people do (myself included). Ask your parents for help and make sure they know that you know you were an idiot and feel bad about it.
They already pay for your college, which de facto guarantees that they can cover your $6k in debt. Yes it's a huge pain admitting to your relative that you've been a complete fool with your money, but, as it has already been said, this is actually a very common problem
Just be glad that you've learned that very valuable lesson NOW, instead of being waaaay deeper in shit. Hell, when i read the thread title, i was actually expecting much, much more than 6k.
Let them pay for it, reimburse them when you'll be able to, and from now, please abstain yourself from maxing a credit card.
I'd suggest drawing up a 0 interest loan and have you and your folks get it notarized, with the payments and expectations clearly laid out (I will pay x every month for x months by x date, etc). That way you will be contractually obligated to pay back the cash, just like with the credit card company, while not getting fees taken from your blood (literally) by the credit card company.
Have your parents pay off the card in full so you don't have the added cost of interest. Then, cancel the card, and get a debit card tied to your bank account. Problem solved, you can never pay for something you don't already have the money for. This is a good lesson to learn.
Here's an idea:
1. Sell that Macbook Pro, that fancy HDTV, and that iPhone. And your 360, since now you have no TV.
2. Take that money and pay as much as you can on your credit card. Beg your parents to pay for the rest and show them that you've done Step 1.
3. Stop buying shit you cannot afford. Cancel your credit card entirely, or freeze it in a big block of ice.
4. Work more. As suggested above, is there a reason you're not working >9h/week?
Can trade TF2 items or whatever else you're interested in. PM me.
I'm almost tempted to say NOT to let your parents pay the debt off, since that's not going to teach you any responsibility.
On top of this:
Your "personal spending money" is now your "get out of debt money." No more going out to dinner, no more toys, no more gadgets, no more hookers, no more shit you don't need. You should squeeze every once of your being that you possibly can into paying off your debts.
Eat cheaper. Cancel your netflix, start hocking your expensive crap.
Hell, maybe see if your city/college has any free "managing my money" workshops or something.
PO
1. Obviously, stop using the card.
2. pay over the min. every month somehow if you can. If the min is, say, 100, try to pay 150. You're going to do this until summer, and then you're going to get a real job for a few months and knock it down fast.
Depending on the terms of your card, making payments on it for the school year is going to cost you somewhere between 4 and 6 hundred dollars. It's up to you to decide if you want to deal with that rather than working more or going to your folks.
This isn't a crushing amount of debt. If you stop, you stopped in time. Grats.
One thing - I don't know what you drive, but if your car is paid and worth more then the debt, you could maybe secure a loan with it that has better terms. You could also, if you're getting lots of credit card offers, put it on a new card that offers you zero percent for six months or something. This can be an easy way to put off paying, though!
I host a podcast about movies.
If this happened without your parents in the picture, here is what would occur: Either you attempt to pay them by working more hours and sacrificing your college fun time, personal expenditures, and other things you can do without for probably a year (seeing as you don't work very much, I assume your job is minimum wage. 5k is a lot of cash at $7 an hour).
Or you don't, end up with fees that amount to what you earn each paycheck, have to drop out of college to pay for the debt, and possibly fall into bankruptcy should you be unable to make enough to cover your obligations.
In either case, you happily don't have to worry about that situation because you have a lifeline that is your parents. Suck it up, be thankful, and pay back every cent your borrow from them (plus interest, if you want to keep them happy with you). I'd seriously re-recommend that you draw up a loan agreement to insure you have to hold up your end. Just remember, if you abuse the parental lifeline, you lose it and next time you need to be bailed out they might not be so helpful.
Moral Police are Mobilized. There is no stopping them now.
I host a podcast about movies.
If your needs are being met, I would put that entire 250 on the credit card every month.
Even when your minimum payment goes down, I would continue to pay 250 a month on it.
If you want money for whatever else, donate plasma.
Blood money takes new meaning.
I did it for spending money in college. It's basically trading feeling like a dehydrated peice of beef jerky for twenty bucks.
Firstly, and believe me it was a bitter pill to swallow, I'm an impulse shopper of the highest order. I also like browsing ebay and newegg quite frequently. This combination, along with loving to eat out a lot led me to having a 8,000 CC debt upon leaving college.
Thankfully I had the luxury of living at home for a couple of years after leaving college, so I was in a sense, lucky to have my rent commuted somewhat.
What I had to do was cut out the temptations. I gave my 2 credit cards to my parents with the express instructions to keep them out of my hands until I go this under control. I did just what everyone else said, pared back my spending, sold a bunch of my electronics and whanot and eventually got my debt down. I'm still an impulsive shopper, but now when the paycheck comes, I'm a bit more cautious and effective with making sure I don't overspend myself into oblivion.
Wud yoo laek to lern aboot meatz? Look here!
It's illegal to sell body parts, so you donate plasma and they pay you for your time.
I've fought off the need to buy a new computer monitor for like 2 years now! Nice to have vs. Need to have.
dude I am at that point in your life where you think you can buy and house and a car and then you are hospitalized for a while and then your earnings go down to 1/3 of what you've been making, so the notion of being 5800 dollars in debt is almost quaint to me
I host a podcast about movies.
Credit card interest sucks and you are just going to have to suck it up and accept your parents' help because that's the best way out of this situation.
At the same time, I only buy expensive things knowing that I will be able to either pay for them immediately, or within a few months. Not just buyin them cuz I'm X$ below my credit limit. Gotta go into stuff like that with a plan and stick to it.
You're not getting out of this debt making $250 a week, unless that goes completely to your card. I'd do thanatos' idea. admit you fucked up, let parents pay it, and pay them back. It doesn't really make sense to sell your stuff for half what you paid unless you are truly in a pinch.
Now I know people do buy things that they can't afford to pay off, but is there really a segment of the population with more than two synapses to rub together that says "ooh, I'm $700 under my credit limit! Time to buy buy buy!"
CREDIT CARDS ARE NOT FREE MONEY.
$250/month is about what you're going to have to pay per month to get this paid off in any reasonable amount of time, you're going to have to either get another job or reduce the debt by selling your toys(not something I recommend since you will get the shaft selling them used). You're going to have to restrict your expenses and the tv is a cheap date.
Selling his stuff and using it to pay off some of the debt will at least show his parents that he realizes he fucked up and is trying to set things right. Otherwise, it looks like he went on shopping spree and wants his parents to give him a 0% interest loan.
I recommend you divide the money in thirds:
I suggest opening accounts for each one of these (or get a sort of multi-account), so that you don't accidentally spend more than you had budgeted. Keep only one card with you (your day to day card) and monitor your balance like a hawk. If you wish to make a large purchase with funds from your Spending Money, simply transfer the amount you need. This is also an impulse purchase brake... because you have to stop and think about why you're transferring money.
OP, you don't have to follow this advice, and it's not something you asked for in the thread, but your life is in need of a financial 180 turn. I really hope this experience was a revelation as to what it means to be a smart adminstrator of your finances.
Edit: In your particular case, I would advice that you calculate how much money you need every week. Use the rest to pay off the debt, once you're debt free, start your new personal finance action plan. Priority one, as of now, is to pay off that debt.
However, I also think that you're not being honest with yourself when you say that your large ticket purchases are not a part of the situation, because they are. Had you not bought them, you probably would have had the money on hand to pay for a portion the $5800 is on your credit card. Which means you wouldn't be nearly as far in debt as you currently are.
Credit Card debit is one of the easiest things to bury yourself without even knowing what you are doing. When I was a freshman in college I had no job, but I had a credit card - which I racked up $1500 in my first semester alone. I was able to pay it off and now I rarely keep a balance, because who likes to continually pay for stuff they've already bought?
How's that any better?
Except getting store credit like that makes your FICO score tank. So if your planning on getting a loan sometime that kinda stuff shoudl be avoided.
fuck up once and you break your thumb / if you're happy at all then you're god damn dumb
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