In article <yobfypgraqn.fsf[at]panix2.panix.com> ,
BreadWithSpam[at]fractious.net wrote:

- quote -

I didn't have any problem with anything in that statement.
I was debating the point that you said the original strategy
was "arguable" when it clearly isn't for the vast majority
of people. There is a huge difference between rewarding and
forming a habit. Drugs can be rewarding, brushing your teeth
is a habit.

-john-

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John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
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SD wrote:

- quote -

IMHO, it's important to treat that one card that you transferred
everything onto as an unsecured loan rather than a revolving credit
account (cut up the card or stick it in your safe deposit box so you
won't use it; the company will send you a new one eventually) until the
transferred balance is paid off completely.

Cut up most of the other cards too, but don't close all the accounts.
Close some of them -- especially the department store cards.

Keep one credit card for new purchases and pay it off every month.
There are a lot of advantages to using a credit card instead of a debit
card if you can be diciplined about it.

Best regards,
Bob

clemster wrote:
- quote -

This is debatable. I would say transfer all your balances to one card that has
both of these conditions:
1) Low interest rate
2) No balance transfer fees
Try to apply for one of these if you don't have one. From now on, use only one
credit card that has a low interest rate.

Here is another tip:
If you have multiple credit cards from the same bank they will let you merge all
your credit cards into any one of your choice. Select the one whose benefits are
the best.

- quote -

Now that in Step 2 you have moved everything to one card, you have only one bill
to pay every month. Pay as much more than minimum as possible.

- quote -

"John A. Weeks III" <john[at]johnweeks.com> writes:
- quote -

Jeez, John. What part of "not the most economically efficient
... but most psychologically rewarding" did you have trouble
reading? You even quoted it.

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In article <yobr794b68j.fsf[at]panix3.panix.com> ,
BreadWithSpam[at]fractious.net wrote:

- quote -

That might make sense for a mathematician. But most
humans are emotional being, not logical being. When
you pay off the smallest balance first, you get reinforcement
right away. Forming a new habit takes a lot of reinforcement.
If you pay off the highest rate card that happens to have
the highest balance, you don't get that boost and good
feeling soon after starting the program, so you are almost
doomed to fail.

Dave Ramsey has fine-tuned his program over 21 years working
with real people, not mathematical models, so consider going
with what works, not what some wanna-be punches up on their
calculator.

-john-

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John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
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"clemster" <clemster[at]maine.rr.com> writes:

- quote -

Unless one actually has trouble with the discipline that
it takes to pay off the card in full at the end of each
month, it's better to get a credit card.

- quote -

They are free, once per year, from each of the three agencies
now, per the recent law. See
https://www.annualcreditreport.com

- quote -

Arguable - again - as a matter of personal discipline.
If you need the positive reinforcement of a bill that
is paid off completely, then pay the smallest balance
off first. It is not the most economically efficient
means - but it may be the most psychologically rewarding
way, inasmuch as this does require discipline and is
not an easy process. Nevertheless, if you want to save
the most money and/or pay off everything the fastest,
then pay down the debt with the highest interest rate
first, not the debt with the smallest balance.

None of this is new, and we've talked about these
things many times in this newsgroup. I highly
recommend taking a few minutes and reading the
archives of this newsgroup via groups.google.com:
http://groups.google.com/group/misc....financial-plan


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Step 1. Cut cards, close all accounts.
Step 2. Get a debit card. There isn't anything I can think of that you
can't with a debit card that you need a credit card.
Step 3. Forget CCCS etc.
Step 4. Get a credit report, so you can make sure you are on top of
everything.
Step 5. Make all minimum payments. Starting with the smallest balance
put any extra available towards that one. When that is paid off, roll
that amount on to the next smallest balance. They will go down fairly
quickly if she can stay disciplined.
Step 6.Start saving for those things you might want in the future and
credit won't be an issue.
Step 7. If 1-6 aren't going fast enough, making more money is never a
bad option (sell stuff, extra job, etc.)

Check out Dave Ramsey on the radio or online for some good resources or
drop me an e-mail and I'd be glad to help. I work overnights and have
plenty of time to surf and study.

I agree with John's insight/opinion and would like to these additional
points:

1. Using your equity in your home allows you to convert non-deductible
consumer debt to tax deductible mortgage interest. Under current tax
laws, you are allowed to convert 100K of consumer debt to tax
deductible interest. See IRS Pub 936 for further details.
2. Consider the use of a 2nd mortgage instead of a HELOC (home equity
line of credit); HELOC's a pegged to the Prime Rate, in other words
when Greenspan speaks, your payments go up. A 2nd mortgage can be
interest only (like a HELOC) or fixed interest rate, but it is fixed
for the life of the loan and not prone to increases like a HELOC.
3. Stay far away from any of these debt consolidation companies, they
do more harm then good as the other writers have indicated. (Even
those that claim to be non-profit)
4. Ideas to raise your girlfriend's credit:
a. Have her pay her balances down to 30% of the available credit.
(i.e. she has 5K on a credit card with a 10K allowable credit; pay down
to 3K)
b. Have her call all of her active credit card cos. and have them
raise the available credit (This will change the debt ratio and will
get her closer to 30% of available credit without the need to make
additional payments)
c. Have her apply for additional credit cards but don't use them.
d. Transfer current outstanding balances to a 0% interest credit card
offer.
e. Do not close the accounts as this will have a negative effect on
her credit as she will be erasing the credit history she has
established with those credit card companies.

One other possibility is to use your 401K/Retirement plan; you will be
borrowing money from yourself and the interest you pay on the loan will
be paid back to you. (This works if you don't have the equity in your
home)

Please be advised that my advice is for those that are disciplined and
not for those that are going to recreate the very problem you are
looking to rectify. As the other writer has already elluded to, the
problem is not the debt (money, budget and a discplined attitude can
clean this up) it is her high consumption lifesytle or behavior.

Hope this helps.

Regards,

Scott

"Jim Eckert" <eckertusaf[at]hotmail.com> wrote
- quote -

Tell her you can't date a woman who doesn't want to learn
how to manage her money. Lack of money management skills has
ruined many a relationship and contributed to many a
divorce. Tell her, with a hug, you do a disservice to her
by doing her homework. If she really wants help, make her
come here by her lonesome and ask the questions. You can
literally hold her hand, while she's fighting through this
learning process, but no more. Like another poster said, if
the spending habits that got her into this morass aren't
cured, then simply consolidating will do nothing. Get that
gal putting her monthly income on one spreadsheet and
outcome on another. There should be a several lines of the
outcome spreadsheet dedicated to paying off each doggone
credit card bill. Let her discover the joy of becoming
debt-free and accumulating wealth. Bloody addictive and good
for the relationship.

How many people don't plan financially and lose control of
their lives is amazing. Put her back in control and, ya
know, maybe discover newfound respect for each other. Hang
in there. You two could either come out much richer (on at
least two levels) for this, or the relationship probably
should end, lest you both dig yourselves further into the
proverbial black hole of debt.

- quote -

That will also help her drive up her credit score significantly because of two
factors:

1) Her credit limit is higher for the same amount of credit
2) A whole bunch of creditors are now paid off.

In article <1132167125.091116.119750[at]o13g2000cwo.googlegroups.com> ,
"Jim Eckert" <eckertusaf[at]hotmail.com> wrote:

- quote -

It depends. If she uses a service to consolidate and make a
payment plan, that is like dropping a nuke on your credit file.
It is just like a bankruptcy. If you use a home equity loan,
then your credit file is likely to improve since secure debt
looks a little better than credit card debt.

The problem with doing a consolidation is that it often frees
up the credit cards so she can rack up a whole new set of bills.
Then she is in even worse condition back in the same spot of
massive credit card debt, plus the consolidation payments, and
now being out of options.

The question boils down to her behavior. Has she stopped
spending? If so, then a consolidation might work for her.
If she has not broken the spending habbit, then a consolidation
will backfire and make things worse.

Even worse is the idea of a home equity loan to solve credit
card debt. What this does is (a) put your house a risk to
pay for trinkets, (b) converts a pizza bill into a 30 year
payment plan, and (c) converts unsecure debt into secure
debt. Those are all bad ideas.

I would consider the H/E loan if you still have lots of equity
left, and you get a much better interest rate. I'd avoid
the consolidation companies--they are blood suckers out to
to drain you of anything you have left. Perhaps the best
thing to do is tough it out one card at a time, and learn
this lesson painfully well so it doesn't happen again.

-john-

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================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

Jim Eckert wrote:
- quote -


What to do depends a lot on the interest rates and the balances, and how
much money she has for debt retirement each month.

She probably gets 20 or 30 preapproved credit card applications in her
mailbox each month. Find the one with the most generous balance
transfer terms (0% or 1% interest for the first 18 months, little or no
transfer fee, etc.) and transfer the big high-rate balances onto the new
card. Do not actually use that new card for purchases until the
transfer balance is paid off, and make sure she pays at least a week
early every month. (if she's ever a day late with a payment, the rate
may jump to near 30%. If she pays just barely on time, they may hold
the payment until it's a day late).

Make small payments on the accounts with low interest rates (unless the
balance is low and can be paid off quickly) and make big payments on the
accounts with high rates. When the introductory rate is about to
expire, hopefully it'll be almost paid off, but if not she can apply for
a new introductory card and play the same game again.

Cut up the cards as they are paid off or transferred, and close some of
the accounts.

That's my system anyway.

Best regards,
Bob

Hello everyone, Well I have a quick question maybe someone can help me
with. My girlfriend has about 6 different credit card bills that she
racked up when she was younger. She is now at the point where she would
like to possibly consolidate all the debt and pay a low monthly few.
She called a debt consolidation company and they said this does not
effect her credit. I heard from a good friend that debt consolidation
of credit cards will ruin her credit for 7 years?? Is this true.Also if
this is the good thing to do can anyone suggest a reliable debt
consolidation company I can set her up with. Also if this isn't the
best thing to do for her what is? Thanks alot

Eckertusaf[at]hotmail.com