$23,000 in Credit Card Debt

**tulog** · 11-30-2008, 10:27 PM

Originally posted by questions View Post

I have a question. I make about 40,000 a year (2400 per month) and currently pay no rent and still live with my parents. I'm young and 23 years old. But, I got into some serious debt issues and am about 23,000 in debt with Amex. What would you recommend me to do? Loan with Prosper/debt management program? Currently, I pay about 1.000 per month from my check to amex so I'm paying way above the minimum payment. My interest rate is 17 percent which is high. Any advice would be great.

I think you should demand the rest of your paycheck. 2400 a month is only $28.8K a year.

**maat55** · 12-01-2008, 04:05 AM

Your paying a lot in interest. Can you shift any of this debt to 0%. I do not recommend debt management copanies, you can do this yourself. Ask to get your rates lowered if possible.

Next, you should as tulog mentioned, make sure you are not having too much withheld from your check.

Third, find ways to increase your debt reduction funds through cutting expenses and increasing your income.(more hours, part-time jobs etc.)

Also, you need to address the mentallity that got you in debt. You need to make it your purpose to live a debtfree lifestyle. Get out of debt, then save money.

**Christophercarl** · 12-01-2008, 04:10 AM

Maat is right. See if you can get a rate reduction. One thing is for sure, you want to get rid of that debt ASAP. If you can reduce it through a lower interest rate great, otherwise pay it off as fast as possible.

**MiikeB** · 12-01-2008, 04:34 AM

Originally posted by tulog View Post

I think you should demand the rest of your paycheck. 2400 a month is only $28.8K a year.

After taxes and maybe health insurance 2400 a month sounds right.

**arthurb999** · 12-01-2008, 05:22 AM

I would try to get balance transfer offers... and hammer it down.

I have some credit card debt that are all on 0% and will play the balance transfer game till they are gone....

You also have to address the problems that got you into this debt...

**disneysteve** · 12-01-2008, 07:58 AM

Have you noticed that people often post how much debt they have but rarely post what that debt is from?

If you racked up this debt from eating out, traveling, going to concerts and other "experience" types of purchases, that's one thing. In that case, I'd do as others suggest and try to lower your rate and control your spending going forward. Paying $1,000/month is great and will have you debt-free in a couple of years.

If, however, the debt is from buying clothing, DVDs, electronic gadgets and other tangible things, I'd suggest selling as many of those things as possible on ebay or craigslist to recoup as much money as you can. Even if you could come up with $1,000 or $2,000 that way, it would put a nice dent in the outstanding balance. Then still do the lower rate deal if you can to speed along the repayment process.

**cesave** · 12-01-2008, 03:09 PM

I'm the individual who is 23k in debt. It was mostly from a failed business I tried to do and just racked up debt. I was uneducated and made a mistake and learned from it. In terms of balance transfers - do I basically open a card with any company and do the 12 month thing and ask AMEX if I can transfer it over? Is that how it works? Would I be able to transfer 23k? The 23k is on an AMEX

**cesave** · 12-01-2008, 03:10 PM

2400 per month is correct by the way after health and taxes.

**maat55** · 12-01-2008, 03:23 PM

Originally posted by cesave View Post

I'm the individual who is 23k in debt. It was mostly from a failed business I tried to do and just racked up debt. I was uneducated and made a mistake and learned from it. In terms of balance transfers - do I basically open a card with any company and do the 12 month thing and ask AMEX if I can transfer it over? Is that how it works? Would I be able to transfer 23k? The 23k is on an AMEX

If your credit is in good shape, you should be recieving offers through the mail for 0%. I've never tried to approach the CC company, but I assume you could google chase or others and apply online.

I'm glad to see you learning and taking steps to better your financial picture. You may have to open more than one account to get the full 23k transfered to 0% cards.

More important is to tighten your budget and focus on paying off the debt.

**cesave** · 12-01-2008, 03:29 PM

Thanks Maat. I really appreciate it. So I would probably have to open multiple credit cards to funnel the 23k to correct.

How would the process go?

1. Find credit cards with zero percent balance transfers
2. Apply for them
3. Hopefully be accepted
4. Contact amex to see if they accept me to transfer a balance transfer over?

**jeffrey** · 12-01-2008, 03:48 PM

There are quite a few credit cards that offer 0% but you need to be careful of transfer fees which are common these days. The common 3% transfer fee would come to about $700 for you, but it's still much better than the nearly $4000 you'd pay at 17%

Another is that some cards will charge 0% on the transfer, but any additional money you put on the card will be charged interest -- the pitfall being that when paying off the card, the transfer balance is deducted first so you end up paying high interest on any purchases that you do make with it. If you are still going to be using a credit card, you probably want to make it separate from the ones you use for the transfer. Always read the fine print.

Another option is to call up AMEX and ask for a lower interest rate. It won't save you as much as a balance transfer to a 0% card, but if you are in good standing, there is a good chance that you will get a much better rate than you are now.

**ScrimpAndSave** · 12-01-2008, 04:21 PM

you could also try to get a personal loan through a credit union

**brianj** · 12-02-2008, 12:12 PM

Is it possible to borrow the money from a relative?

**jIM_Ohio** · 12-02-2008, 12:19 PM

Originally posted by cesave View Post

I'm the individual who is 23k in debt. It was mostly from a failed business I tried to do and just racked up debt. I was uneducated and made a mistake and learned from it. In terms of balance transfers - do I basically open a card with any company and do the 12 month thing and ask AMEX if I can transfer it over? Is that how it works? Would I be able to transfer 23k? The 23k is on an AMEX

If the business was legit you can possible write the losses off on your tax returns. Did you file a schedule C in 2007?

Meaning when you file 2008 taxes, consider going to a qualified tax preparer and explain the business and what the expenses were which cost you money, then see if they can write off enough of the expenses to lower your tax liablity to 0. You may have a NOL (net operating loss) which could allow you to amend a prior year's return which would also end up netting an IRS refund for 2006 and 2007, as well as 2008.

I would contact a tax professional soon (in 2008) to see what they can do to help you.

the 23k might be erased soon
do your parents claim you as a dependant?
do you provide more than half of your own support?

if you do not provide half of your own support, you may want to move out before Dec 31 2008 so you can, that will open up other tax advantages to help you.

I would up the cc payment from $1000 to $1100 or $1200 in the mean time.

$23,000 in Credit Card Debt