Oprah's Debt Diet

I haven't looked at Oprah's Debt Diet specifically, but I do have to say that the hardest step in getting your finances in order is overcoming the dread at crunching the numbers.  Once I did that, it was easy-sailing from there. Okay, not easy, but no where near as hard as I thought it would be.  Had I overcome the dread earlier, it would have been even easier 'cause I wouldn't have allowed things to continue to spiral out of control.
 
I don't know if you actually have credit card debt, but after trying to live the life of a gainfully-employed adult NYer on the salary of a part-time-employed student NYer, I had a TON of debt.  I got on board with a consumer credit counseling service, and it only took a couple years to pay off my substantial debt AND get a much higher credit score.  The fact that there is proof that you are working to make good on your debts (by working through the CCCS) actually does look good to most creditors.  The drawback is that you can't have a credit card during the time you are enrolled in the program, but that actually worked to my advantage too.  I couldn't charge anything, so I learned how to live a credit-less life.  It was kind of a pain for things like internet shopping and needing a credit card to guarantee things, but you can use a debit card if you're willing to take on the risk associated with that.
 
Good luck! You are going to LOVE getting out of debt. It's the greatest feeling ever. []

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what exactly is the debt diet? 

Jen - that's good to know about the CCCS, I have been wondering if that would be a good option. In my experience, once you get into a tight spot financially, you have to be super vigilant about getting scammed, because so many people prey on those of us with money problems. I will look into a CCCS... my question is, can they help someone who doesn't have much to consolidate?

My debt breaks down into - credit card, student loan, and (gulp) IRS. My credit card debt is, in relation to my income, big but far from insurmountable. I have one small credit card that I totally paid off last year, and I have kept it with a $0 balance for several months. I only have one other card - a year ago it was over limit, and since then I have paid it down 20%. It's still at about 85% capacity, and unfortunately I have had to use it (on basics like groceries) a couple of times lately because my work schedule has been spotty and like I said I'm partly supporting my SO for the summer.

One decision I'm trying to make it whether to buy a beater car right now, or rent one according to when I need it for work until late fall... in late fall we may be moving to an area with a lower cost of living where we can cut our rent in half and drop down to one shared vehicle. But we might not be able to do that until spring. In the long term renting a car may cost more money... but if I can't get a lump sum together now it may be the only way, to spread it out like that until the day when we can move and then I won't need to buy/have a car.
 
Cyclefiend - the debt diet is nothing magical... it's just a series of worksheets for your expenditures, income, etc. Some tips on how to get your interest rates down on credit cards, things like that. It doesn't cost anything, you don't have to sign up for anything... I just printed out a bunch of worksheets to look over.

ORIGINAL: jones
I will look into a CCCS... my question is, can they help someone who doesn't have much to consolidate?

Absolutely! What they do is be your representative with the credit companies and work to get you a very low to zero percent interest rate (I had 3 cards - two 0% and one 8%), and then they can set you up with a counselor if you need help setting up a budget, learning how to handle your finances, etc.  They also work out a monthly payment that is within your current income. So, for example, I had a very low-paying job when I enrolled but I was about to get a higher-paying job.  But my monthly payment was set very low, and I could pay more than the monthly payment when I started getting paid more.  But I had the security that if I lost the higher-paying job or had a financial emergency, I didn't have to pay some huge payment or risk a late fee/note on my credit report.   

Unfortunately, they don't work with most student loans. But they can help you find resources for dealing with your student loans.  I don't know about IRS, but I suspect they do help with that.

You want to make sure that your CCCS is affiliated with [linkhttp://www.nfcc.org/]http://www.nfcc.org/[/link]  to avoid being scammed.
Another good site, even if you're not "religious", is [linkhttp://www.crown.org]www.crown.org[/link] (a Christian-based financial lanning site) They have some good resources.

I haven't looked at the debt diet but in my experience..and from what you said, a lot of times people who are living off of their credit cards and not paying it off each month are kidding themselves and living beyond their means.  Then one day, all of a sudden, it becomes obviuos to them that there is a problem with all this debt that has stacked up and you have to cut WAY back, even more than you would have had you never started using the cards in the first place.
 
My brother has done this.  Here is how we are trying to help him solve the problem from this point forward and get the CC's paid off and even some money into savings....first of all, look at all your debt and consolidate if you can.  If you can't, figure out how much money you have per month to put towards it.  Then put the most towards the items with the highest interest rates and continue until paid off and then move that payment to the next one with the highest.
 
Another thing that is really important is a budget.  We have tried a few things.  First I made him a spreadsheet to estimate his expenses but he keeps getting further into debt b/c he won't be honest about what he is spending. 
 
So now he is taking a different approach.  Go to your online banking and see if you can download your transactions for the year or even the past 2-3 months.  Get something like MS Money or Quicken or whatever your online banking is compatible with and download your transactions and categorize.  The cheapest of the programs is MS Money at $20 and if you really can't afford something compatible or write mostly checks, then enter them by hand for 2 months.  You will find out really fast where you are spending more money than you should and where you can cut back.  Most CC's will let you download the transactions too which is even more effective if you rely on them.  I say figuring out where you are spening too much money is the first step to getting out of debt...or at least not getting any further into debt. 

Be careful with debt consolidation companies... some ARE out to get you. 

As for your credit score... having a credit card with a $0 balance looks bad as does a maxed out card.  They want to see you somewhere in the middle.... and that you've paid on time.  How many open lines of credit do you have?  Lots of people looking at your credit report also lowers your score... so if you have been applying for things and allowing various companies to see it then you have been causing the score to lower... never authorize someone to look at it unless absolutely necessary.

When I have called for car insurance quotes in the past they have wanted to look...they never tell you either... you know because they start asking for ALL kinds of personal info.  I always ask why they want that info and if they are going to look at my credit report.  If they say yes for blah blah reason you say NO.  They dont need to see it to give you an estimate and dont let them push you around.

I work with people all the time with a good friend of mine whos a lender.  I have lots of experience with credit reports and agencies... and improving credit status.  Many people have to work on their debt and score before they can buy a home... and some just need a little adjusting to fix it up.  What bad marks do you have?  How long have they been there?  You can get bad marks removed yourself if you know the rules.  Read up on how long things are allow to be there and make sure you dont have any old ones... my mom had a few old marks that I got removed for her.  Unfortunatley we do have to be involved with it or things can be looked over.  Also... someone may have reported you for not paying and then you paid but that mark was never switched.  You need to provide proof of payment and have it switched.  That is SO common... the company the reported you does not take the time to go back and say "ok she paid"... you have to do it or make sure they did. 

Sometimes the best thing a person with bad credit can do is get a horribly high rated card and keep it at middle balance for a while.  NOT that you should do that, lol, just saying there are lots of ways to get where you want to be.

YOU can also be your own CCC if you are willing to spend the time and effort needed to work out debt with these companies.  If you do go with an outside party be extremely wary... as Jen said there are good ones out there but I would say more are not all theyre cracked up to be.

I did the cash flow worksheet last night and things were actually not as bad as I was expecting. According to her pie charts of how much $ should be going where, all of mine were right on target if not slightly below. I don't spend money on very many extras. There are a couple of places I could tighten up, like I could go to the library instead of spending $100/mo on books, and I spent $75on clothes last month because I needed summer clothes but normally I don't do that every month. I guess I'm not that bad off, I just want to be doing better.
 
One thing I can work toward improving is my credit. I have four bad marks - one from each of my credit cards for late payments last year, and two from my student loans for late payments even earlier. I'm going to call these lenders and ask to have the marks removed if possible. I'm also going to ask about bringing down my interest rates on the cards, which are both just shy of 30% - !! How awful is that?
 
According to my credit report the main reasons for my bad credit are - credit card balance too high, too little time passed since the last time I was late, and I haven't had my lines of credit for long enough (a few years is too little I guess). It said it does hurt your credit when someone checks it, but the effect is minimal.
 
I didn't know that having a zero balance is bad - I can definitely start using this card once or twice and month and paying it off monthly to help my credit out.

I'm also going to ask about bringing down my interest rates on the cards, which are both just shy of 30% - !! How awful is that?

 
OMG! That's ridiculous! They should reduce it for you. Most of the time, they're just waiting for you to ask when it's that high. 
 
Good luck!  See, I told you, the hard part is the getting over the dread! []

As for your credit score... having a credit card with a $0 balance looks bad as does a maxed out card.

 
I think that the best thing to do if you've applied for a card but never used it or have paid it off (and no longer use it), is to call the company and cancel the card.  It doesn't matter if you have a card with a credit limit of $5000, but a zero balance or a $2500 balance.  What creditors look at is what's available to you in the form of credit.  The concern is that even though you have a zero or low balance, you have the potential to run up $5000 in debt, so it's considered a debt risk from their viewpoint.  At least that's how I've understood it. 
 
As a side note, my DH is getting ready to start the city's fire fighter academy in August and is going thru all the background checks, etc.  He met with the investigator yesterday and the guy said "well, I have your credit report back and it's A+, so that should give you a big thumbs up for passing the investigation".  I've always known good credit was important, but sometimes you don't realize just how important it is until something like this.

Yeah, it's crazy to me now that I didn't know ANY of this, and I am not an irresponsible person... but I guess if your parents don't tell you who will? I think it 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 think it 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.

 
Me, too! I didn't have that class, but by the time my brother got into high school there was a dad of one of his classmates who volunteered to teach a Personal Finances class. The dad was "cool" and fabulously wealthy, so the kids in the class took him seriously.  My brother has never had a major financial issue, and he and his wife are 4 years younger than me and building a fantastic 5-bedroom house right now. 
 
 

As far as I know and I work with lots of lenders and banks with home loans... having a $0 balance is a negative mark in the eyes of the "lender".  Its not a bad mark on your credit report... its indifferent there, but for the lender looking at it they see that as a negative thing.  Same if your all maxed out.  I think they figure theres a reason why you dont use the card... cant afford the payment. 
 
Lenders also generally do what they can that works best for them and if thats acting like you have bad cradit then thats what they do.  I went alone to buy a car... haha... they didnt know who they were talking to!![]  They tried to tell me that my credit was bad and that a 12% rate was going to be the best they could do and that would even be tough but "if anyone can get you this loan WE can"  OMG.  I didnt know all what was in my credit report but I sure as heck knew it wasnt that bad!!  I just said thats rediculous.  He said well like I said, you can go try another place but we are going to be the only ones willing to work hard for you and get you into a car...[8|].   
 
Anyway, I started asking which places he looked into besides his own (meaning which banks...they generally ask lots of places and are supposed to get you the best rate) and what their rates were... when he couldnt tell me I left.  He started trying "wait let me do this and that and see"... he wouldnt even tell me me score!  This btw was a used car dealership.
 
I decided to get a new car a Saturn VUE... anyway, thy said my score was 732... I got a 2% interest rate for 6 years.
 
The point is that that car company wanted me to use THIER finacing so THEY could make lots of interest off me because I was a stupid young girl, or so they thought.
 
Anyway, back on track. 
 
If they see you with a middle balance it looks responsible to them... it shows that you can afford a constant monthly payment... meaning every month shes paying this amount... and she doesnt go crazy and go spending all sorts of money.  It will look better in lenders eyes if you have some balance on your cards.
 
We got a card at 29% too, its at 9% now because I kept calling every 3 months and asking for them to lower it.  Make sure you pay on time... they will lower it for you every few months if you ask.
 
If your balance is too high on one card I would work on lowering that one and then get some balance on the other but pay down first.  yes, call and get anything you can fixed or removed.  Everything is really what you can get out of it...
 
Oh... dont be late... ever.  If you are going to be late, call them and tell them!  They will give you more time...  they will help you if you stay on top of it.
 
 

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.