Oprah's Debt Diet

i have been pushing my wife to do away with all our credit cards, and go to something like an american express card (charge card). that way we HAVE to pay it off each month. i hate having outstanding debt and cant wait to get those cards paid off.

should be a required class for high school seniors - Personal Finances, including how to manage your debt and your credit and all of this stuff. High schools focus so much on college prep, but this is just as important if not more important in the end!

I so agree, especially today when I was growing up they didn't send you credit cards.
Erin, I am in no  way smarter than you or anyone else on this board just older. And please listen to me on this, everyday from now  on your earning power goes down, so when you are ready to retire, if you  have not saved and set yourself up, then what? It is so scary, the thing that did it for me was when I started selling houses in the adult communities, I was 40 then, I saw them w/ doors closed and the heat on in one room, A/C not on much, and the worst thing yet was standing behind them at the pharmacy and the pharmacist telling them their pills for this month is $800, and they said just give me half,  these are not drugs to make them happy, they are to keep them alive. I said oh, no I am not going there, and I stopped spending. Luckily DH and I were on the same page at the same time. An older lady once told us take care of the pennies and the dollars will take care of themselves. and they do, we buy big ticket items on sale and  even if it's the summer they will be our Christmas gifts. I am not deprived of anything, I just don't want to blow my hard earned cash on stupid stuff.  Now if a car breaks or the AC goes or one of the dogs gets sick I don't have to sweat it and I can sleep at night and answer the phone.
Oh I'm sorry I seem to have gone off on a tangent,lol yes I am watching Oprah's debt diet and it's good and it will work.
Also get the book Wealth w/o risk
and Rich dad Poor dad, it will teach you about money.
I also like "Think and grow Rich".
Go to the library, the pennies Buy them used on Amazon.
You can keep one credit card and pay the balance off at the end of the month.

I called up the company who has my small, zero balance card this afternoon. Whew, they were not nice. Every step of the way they tried to scare me off and convince me they couldn't do anything... starting with the low-level reps saying "the system won't allow me to transfer you to anyone who can help you" (yeah right!) to the supervisor-sounding guy who told me he couldn't offer me a new rate because not enough time had gone by since my last late payment. I pushed, "how long am I supposed to wait?" He said "6-12 billing cycles." I pointed out, "Well, okay, it's been 11 billing cycles AND I paid off this card 6 months ago." He finally conceded only this - "I might be able to offer you a new rate at the end of August." I said, "Okay, I'll call back in August" and hung up. And that was the little card ($500 limit)!
 
This has been the biggest eye opener of my life... this economy and system of credit is set up like a game, you have to play to get anywhere, but the deck is stacked against you and you don't know any of the rules, let alone the tricks of the game. Ten years ago all I knew about credit is that you have to have some to be able to buy anything major (cars, houses). I'm not excusing myself - I feel like the person who buys a pet store puppy and then freaks out because it's peeing and biting all over the place. I'm getting educated REAL FAST now.

Don't beat yourself but pat yourself on the back that you're taking charge of this now.  Many people never, ever do.  I'm guessing you're young, so you've got the time to turn things around.  Like Deb, sometimes it takes seeing something that scares you to wake you up.  For me it was hearing about people who never could afford to retire.  I love my job, but I don't want to do this forever.  So, that's been most of my focus (along with saving and staying as debt-free as possible) and I should be able to retire at 55.  I may stay until 59 to get full medical benefits, but I'll decide when it gets closer.  Knowing my goal, I know that my state retirement won't be enough and I'll need savings too, so I've saved as much as I can.  I've still been frivilous at times, and I think you need to be or like dieting, it's just too painful and you give up.  So, save what you can and reward yourself too, but do it wisely.
 
 

Erin, I am in awe of you, that you caught on and won't play the game anymore at your age is so awesome, like Cathy said some, most people never get it . you will be fine, you sound like you are on a mission and you should be, screw them.It's your cash, we can't do anything about the way they rip us a new one everytime we turn around w/ taxes, but we can control what goes out of our pocket.
You go girl! keep us informed and if you need help ask. Hubby is a finacial wizard.

In my mind, it would be better to cancel that card, but honestly I don't know for sure.

 
Having worked in mortgages, with the scenario you described, depending on the available credit left on the remaining cards, you'd actually look better to leave the line open, particularly if the others are near their limit.  Sounds weird, but it works in some cases.  You can argue both sides of it, though, because I've seen it work for and against people in similar situations.  HOWEVER, if you had several lines of open zero-balance cards, that would look BAD because you could go out tomorrow, charge them all up and have $10000 in debt overnight.
 
Jones, my dear, if you want a debt diet buddy, I'd be happy to join you.  [] I just made the decision this week to pull my head out of the sand and deal with the fact that I've been paying hideous overdraft fees on my checking account because I'm not vigilant in what/when I spend.  STUPID reason to lose money.  But setting up better spending habits (like eating habits) can only be a GOOD thing.  It's not like you're going to regret having your finances in order.  lol!  I give you credit for facing it and will be happy to support you!

ORIGINAL: cakana

Amy - I think we're talking about the same thing, but in a different way.  If you have no credit balances or history, and you have a zero balance credit card, you're right that it won't reflect any payment responsibility.  I was thinking more of Erin's case of having credit balances already.  I'm pretty sure both lenders and credit reporting agencies see that say you have a Citibank balance of $7000, a Sears balance of $5500, and a Chase Visa balance of $3200.  If you also have a Discover Card with a zero, but available balance of $7,500 then that would be considered a negative, right?  In my mind, it would be better to cancel that card, but honestly I don't know for sure.

 
Right... better to cancel it than leave it that way... better still to get some balance on it and leave it open... along with paying down the others a bit.

ORIGINAL: jones

I called up the company who has my small, zero balance card this afternoon. Whew, they were not nice. Every step of the way they tried to scare me off and convince me they couldn't do anything... starting with the low-level reps saying "the system won't allow me to transfer you to anyone who can help you" (yeah right!) to the supervisor-sounding guy who told me he couldn't offer me a new rate because not enough time had gone by since my last late payment. I pushed, "how long am I supposed to wait?" He said "6-12 billing cycles." I pointed out, "Well, okay, it's been 11 billing cycles AND I paid off this card 6 months ago." He finally conceded only this - "I might be able to offer you a new rate at the end of August." I said, "Okay, I'll call back in August" and hung up. And that was the little card ($500 limit)!

This has been the biggest eye opener of my life... this economy and system of credit is set up like a game, you have to play to get anywhere, but the deck is stacked against you and you don't know any of the rules, let alone the tricks of the game. Ten years ago all I knew about credit is that you have to have some to be able to buy anything major (cars, houses). I'm not excusing myself - I feel like the person who buys a pet store puppy and then freaks out because it's peeing and biting all over the place. I'm getting educated REAL FAST now.

 
Now your getting it![]  Yes, its a game... the more you "play" it the better off you will be.  Unfortunately all too many people sit back and let the system handle it all and just go with it... bad idea.
 
Good for you for calling them!!  Sometimes it can also depend on whos working that day (manager) and who you talked to.  I would honestly call back in a week or so and try again.  If they tell you August again ask if they will put a note on your account about it... that sort of thing.  Keep at it.  Im so glad you pushed it even though they gave you a hard time.  DH always tells me Im "nervy"... hey, I get things done, lol!  He does always say hes glad Im that way.  Of course this only pertains to stuff like this.... not every day life with family and friends... but when dealing with this sort of thing, its the only way to go.
 
You are doing wonderfully by fixing this problem.  They are a pain to deal with but having good credit will be worth it. 

You can also call your CC companies and request that they NEVER up your limit without your request.  My CC's did that, soon I had, combined, over $20,000 in available credit.  I kept using it too!  Stupid me.  Last year I went on a debt diet.  From my approx. $19,000 in CC debt alone, I'm down to about $2,000.  Can't seem to get any lower though.    I set up a debt reduction plan, paid off high interest rates first, then moved payments.  If one CC offered a good deal on balance transfers, I consolidated all my CC into one, canceled a couple (I had like 5 at one point), and now have 2.  One has zero balance and the other has the remaining $2,000.

Also, you can get 1 free credit report from EACH of the reporting companies(there are 3) every year now I believe.  If you do it right, get all 3 at once, check them each for anything wrong, fix what's wrong, then going forward, after the 1 year time, get one every 5 months or so.  One from comp. 1 this time, one from comp 2 next time, ect.  This will help you keep track of your credit report over time and also help prevent you from getting your identity stolen!!

Jones, my dear, if you want a debt diet buddy, I'd be happy to join you. I just made the decision this week to pull my head out of the sand and deal with the fact that I've been paying hideous overdraft fees on my checking account because I'm not vigilant in what/when I spend. STUPID reason to lose money. But setting up better spending habits (like eating habits) can only be a GOOD thing. It's not like you're going to regret having your finances in order. lol! I give you credit for facing it and will be happy to support you!

 
Thank you, that would be cool! It's true what you guys are saying, I do feel better already just having decided to tackle this. I tend to be an impatient person and once I decide to do something I get frustrated when there aren't swift results... but I'm going to take a long-term optimistic view. I just turned 28 and I feel that it's a reasonable goal for me to have paid off my remaining credit card before my 31st birthday so that's what I'm aiming for.
 
Amy - the way you decribed yourself is much like me... I am easygoing to the point of passive with family and friends, but I can be firm and assertive with corporations and companies when I have to. I know they're not going to get their feelings hurt if I put my foot down. [] They don't really care what happens to me, they just want to make money... so I have to step up and take care of myself.

I have not always been the most prudent money manager and that is being VERY kind.  I have changed my ways.
 
It is critically important to save money, but you can't do that while you are paying 30% interest on your credit cards.  The best way to "save" money, in that circumstance, would be to pay more on the CC balance.  You might play the game, as someone else suggested, of balance transfers to get the rate down.  I am always getting offers in the mail of 0% for a few months.  Take advantage of those offers, if you get them.
 
I applaud you for trying to tackle this problem.  You won't regret it.  Been there, done that.  Keep in mind, there is no quick fix.  You can get into debt much faster than you can get out.

Semi-off-topic, but I got intrigued enough to watch Oprah's Debt Diet show last night. OMG! [sm=eek.gif][sm=eek.gif]  Those people are INSANE!  I know, I know don't judge, but good grief! $13,000 a year on NOTHING? Late fees, service charges, etc? Forging your husband's name to buy a car!? $1500 a month on fast food?!  I am totally in shock.  I guess I'm lucky to be married to a cheap guy who absolutely blanches at the thought of using his ATM card in a non-bank ATM. LOL!
 
And then the woman who couldn't say no to her daughters? I wanted to slap her. Here she is with a once-in-a-lifetime opportunity to get a financial advisor to work with her practically 24/7 for free and she's scheming ways to not do the work!!  And the woman who threw a temper tantrum 'cause she couldn't get her hair done professionally without using her allowance? 'Cause she's a black woman, she has to get her hair done? Please! My best friend/college-roommate is a black woman and stunningly gorgeous (grr!) and I have never seen her get her hair done professionally ever.  [&:]

Jen - I know, the actual show is driving me nuts. I hate that they are using these families as the supposedly "typical" American family-in-debt. No one I know spends this foolishly and lavishly. They showed a girl who was 27 and in student loan debt... shopping for designer clothes, and she owns a few hundred pairs of jeans or something. Give me a break... only to Oprah could these be "broke" people!

Hey Jones - when you get a moment, PM me and we can talk about the "diet".  I was off the board for a few days in prep and participation for a competition, so I missed this.
Signing off for the night, but still have a need to keep this debt diet on my radar.  Hope you're doing well with it so far.  Any milestones, or big bummers to report?