Thread: Credit Card Debt

Originally Posted by JTH

I hope someone here reads this and learns from it...

If we were all gathered together somewhere (anywhere) and you shared this...


Everyone would cheer for you and show you the greatest support.

Originally Posted by JTH

I'm taking out a TSP loan and using it to pay off some credit cards with a higher interest rate. It's not something I want to do, but it doesn't make much since to be investing in the TSP or a Roth IRA, while having excessive credit card debt.

When my husband and I finally woke up to our long-term financial picture, that's the way we did it too. We paid off our 19% interest cards with a TSP loan.

I treated the loan on my personal spreadsheets as being invested in G Fund while we paid the loan off. We just adjusted the amount we would have had in G Fund anyway. For example, if the loan was 10% of our total TSP fund, and we wanted to have 50% of our TSP in G Fund, then we put 40% in our G Fund and counted the loan as the other 10%. That's a little simplistic from the way my spreadsheets actually treated it, but you get the idea.

Good luck with it!
Lady

The key thing is to not get back into revolving CC debt again. If you think may be an issue, then I wouldn't recommend taking out the loan at all and just sucking it up and paying it off with the high interest rate.

Originally Posted by ChemEng

The key thing is to not get back into revolving CC debt again. If you think may be an issue, then I wouldn't recommend taking out the loan at all and just sucking it up and paying it off with the high interest rate.

Big huge thumbs up to your comment, ChemEng!

When we started this, we had 4 credit cards. We got a debit card connected to our one checking account, cut up 3 of the credit cards and locked the fourth one up in the gun safe so that we'd have it in some dire emergency. And we haven't used a credit card since - in years.

That is the absolute total key to making it work!

Lady

Originally Posted by ChemEng

The key thing is to not get back into revolving CC debt again.

I completely agree with you. This is the second time in 12 years I've put myself in this situation.

Over the years I've gotten a bit wiser and since I joined this site over a year ago, I've learned so much and now I focus on the future more then ever.

Credit Reporting Agencies, Collection Departments, Company Attorneys
and Credit Card Debt are problems which I can relate to in my younger
years. Refinancing of your home to payoff your obligations is not the
best move, but it was my only option back then. When all else fails, you
can absorb $18k into your mortgage balance and make principle only
payments (additional to your normal payment) to get back to your pre
existing balance when better times arrive. Again, I don't believe it should
be your first consideration, but it is a option. Leave your TSP alone unless
you've exhausted every possible solution. JMHO.

Originally Posted by XL-entLady

And we haven't used a credit card since - in years.

I may have been unclear in my post. I have absolutely 0 problems with credit card debt--just as long as it is paid in full every month. We use a 2% cash back card that we put all of our monthly expenses onto and then make sure to pay it off every month. I would put my mortgage payment on there if it were possible.

Originally Posted by ChemEng

I may have been unclear in my post. I have absolutely 0 problems with credit card debt--just as long as it is paid in full every month. We use a 2% cash back card that we put all of our monthly expenses onto and then make sure to pay it off every month. I would put my mortgage payment on there if it were possible.

That is great for you and is a good way to get the 2% premium.

My problem, and I'm embarrassed to say it, is that I'm a credit card drunk. One is too many and a thousand aren't enough. Every time I've gotten myself into deep financial waters it's because the credit was too easy and the day of reckoning was ignored. So I put myself into credit card AA! I'm a credit card alcoholic with five years of sobriety a day at a time!


Lady

Good topic..

The bottom line, and I'm sure you are all saying it too..Is discipline!

I have the usual Lowe's, Home Depot, Sears, and gas..I pay them off every month...Also if you have any dormant CC accounts, my advise is to cancel or close those accounts NOW!..makes a nice difference on your credit score.

Well....a little caveat. You want to keep one long-existing card account open, lock the card away if you need to. If you don't have any credit accounts, or you closed everything at once, your credit score can be adversely affected.

About a year ago Bank of America changed my interest rate from 7.99% to 18% and they didn't tell us. When I called them about it, they wouldn't budge one bit. So I canceled the account and now they are banned for life!

I could continue to play the credit card swipe game where I'm constantly looking for the best interest rate. But I'd rather owe myself then someone else and I think TSP debt looks better then Credit card Debt.