Gwinnett couple conquers $83,000 of credit card debt
This is a good-news column about conquering debt, brought to you by Courtney and Michael Wacker of Lawrenceville.
Courtney and Michael Wacker (Photo by Robin Henson)
Buried in a credit card hole and staring at financial disaster, the Wackers managed to whack about $83,000 in principal and interest in a little over five years.
How they got into the mess — fairly typical — and how they climbed out — determination and good advice — can be an example for consumers facing similar messes.
“We had so many cards full of so much stuff that we started just paying the minimum. That was the big trap,” said Courtney Wacker, a 46-year-old former teacher who works in educational testing.
It wasn’t the house or car payments that got the Wackers in trouble. It wasn’t the two kids. It was the plastic.
“You charge it,” Courtney Wacker said. “It’s the American way. I’m going to pay it off later.” Only “later” didn’t come until after the mountain of debt was about to crush them. As their credit scores kept falling, the interest rates on the nine credit cards shot up to as high as 32 percent. By paying the minimum each month, the Wackers were looking at about 30 years to get out from under the load.
Since they didn’t want to be in their 70s before the cards were paid off and since they were opposed to filing for bankruptcy, the Wackers sought help from CredAbility, the nonprofit group formerly known as the Consumer Credit Counseling Service of Greater Atlanta.
First, the nine cards were cut up. Then, a CredAbility counselor went through their budget, put them on a debt management plan and contacted their creditors. The counselor was able to negotiate a critical change — the interest rate on the debt was cut to 3 percent from 32 percent.
“That’s what saved us,” Courtney Wacker said.
Each month, the Wackers paid a figure they’ll never forget — $1,456, which included a $50 monthly fee to CredAbility.
To hit that monthly target, they had to completely change their spending habits. No impulse buys. No meals out. No vacations, other than driving to see family or friends. No expensive Christmas or birthday gifts. Handmade gifts instead.
“We had to adjust to strictly cash, even to pay for gas and food,” said Michael Wacker, a Georgia Power maintenance specialist. “Once that first year got by, we were OK.”
Did it affect your relationship, which began back in high school?
“You have to be able to work together,” Michael Wacker, 46, said. “You have to be patient with each other.”
They had to establish priorities, which were essentially living expenses, plus one other thing — continuing to pay for the kids’ competitive swimming activities. Everything else was eliminated.
As their debt was being retired, their credit scores steadily rose to 750 from the 500 neighborhood. Now, with all of it paid off, the Wackers still plan all of their spending, and pay with cash. They literally have a written, five-year plan detailing how they’re going to tackle many home-improvement projects they plan to do themselves.
Any advice for others?
“If you can’t pay for it, you can’t get it,” Courtney Wacker said. “If you fall into the credit-card trap, don’t wait long to get help.”
- Henry Unger, The Biz Beat
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122 comments Add your comment
Hey What ever!!!
April 26th, 2011
12:44 pm
@Amazing,,,, your comments are funny as the bloated spending under the last President was done by a totally democratic controlled house and senate.
The last time I checked The President has the power to veto, so blaming the spending under W entirely on a democratic controlled Congress is either ignorant, willfully ignorant, or a blatant lie.
It’s called check and balances. I guess you are another fine product of that State of GA education system.
Michael
April 26th, 2011
12:51 pm
$50 per month to have them negotiate and manage an $83,000 debt load over five years. Sounds like a bargain.
I have filed so many bankruptcy cases over the years that the only thing I now charge are the bankruptcy filing fees.
TnGelding
April 26th, 2011
12:57 pm
Only in America! But I don’t think we know the “rest of the story.” There had to be something that triggered such wasteful spending. But they’re certainly due kudos for seeing the light and turning it around. The banks were certainly complicit in allowing such folly to continue.
Don't Listen to Rich ....
April 26th, 2011
12:59 pm
… Advocare is a modern day MLM much like Amway (which rebranded to Quixtar). Scams like this are very popular during times like these because they prey on victims (bad economy).
Melody
April 26th, 2011
1:01 pm
Good Job!! soon i will have no CC debt!!
Miss A
April 26th, 2011
1:01 pm
Great article and KUDOS to the couple for having enough determination and restraint to pay off such a huge debt! Seeing the amount of debt they had made me feel better, much better about mine. I only have one major cc and one department store. My major credit card was up to $8000 with a 19.99% interest rate, but they were charging me around $130 a month for finance charges! So, the $250 I was paying a month did little to decrease the balance. So, I finally got tired of the cc company and paid the entire card off. Luckily I have a nice amount saved in a money market account and got the money from there. BUT….the money I was using each month to pay my cc bill is now being deposited into the money market account (I also have money directly taken out of my check bi-weekly and going into the money market acct). My SUV is paid off, and I have been a homeowner for over 10 years in a modest townhome with a low mortgage on a fixed rate. I watched my Mom take care of 6 kids on her own, divored from my dad, and not once did bill collectors call our home. The lights were never off, we ate very well, phone never disconnected, and she was NOT going on welfare. She was a genius at managing money on a very limited income, and I am thankful to her because I manage my money the same way.
Stay away from credit cards! You only need one for emergencies. Once I pay off my Macy’s cc (under $1000 balance), I will be done and cut it up AGAIN….lol
TnGelding
April 26th, 2011
1:02 pm
Reagan submitted the first trillion dollar budget; ‘43′ the first 2 and 3 trillion dollar ones. If Obama does a 4 he’s losing my vote. I’d like to see him submit one for $2.99 trillion and see what the GOP did with it.
TnGelding
April 26th, 2011
1:03 pm
Cash is King…and Spalding!
Chris
April 26th, 2011
1:08 pm
Keys:
1. Buy a house that is no less than $100k lower than you were qualified.
2. Take a 15 year mortgage
3. Drive your car for at least 11 years.
We'reOnOurWayTOO
April 26th, 2011
1:17 pm
Congratulations! I’m happy to hear good news stories like this one, They created the debt and they worked they butt off getting rid of it!
dirk diggler
April 26th, 2011
1:18 pm
I picked up a second job at Swinging Richards, sold my soul, and now I am debt free!!
The Obvious
April 26th, 2011
1:18 pm
What are the “Cash is King” crowd going to do when paper money goes away in the near future? Modern society is going to be painful for alot of folks.
CASH TALKS
April 26th, 2011
1:19 pm
We are a cash only household, it’s amazing what discounts you can get on major purchases when you have CASH!!! We’ve got awesome deals on furnitures and appliances SHOWING a salesperson a stack of CASH and saying, hey, this is all we’ve got and we don’t do credit. They take it…every time. Even if it’s hundreds below their lowest offer. It’s AWESOME! We are not rich I’d safely call us lower middle class. We plan and save for our major purchases.
We do carry debt but not much and overpay on that debt to pay it down faster, 1 car payment, only 14 more months, and 1 motorcyle should be paid in full by January 2012.
My parents (surprisingly enough) can’t comprehend how we survive without credit cards, and always say what about emergencies and vacations. I keep a separate savings account at a CU for emergencies and if I can’t afford to pay for the vacation up front and IN CASH, then I can’t afford that vacation. PERIOD. I’m not going to spend a year paying off five days.
I do have credit accounts at stores, I use them once a year and pay them off in 2 months, always good to keep the lines open I guess, I don’t carry the cards around. I heard that keeps your credit report happy having different types of credit accounts in good standing, I think that covers revolving credit.
T Knight
April 26th, 2011
1:20 pm
Personally, I’d love to see more stories like this. Too much focus on the bad right now. We all need to redirect ourselves.
SmittyATL
April 26th, 2011
1:24 pm
I hope many people facing financial challenges will follow the Wackers’ example. Great story!
Sell Liquor on SUNDAYS
April 26th, 2011
1:25 pm
So basically:
1. They made lifestyle changes to get out of debt
2. They paid one of those companies to help them do it
3. Them being in debt in the first plce is Obama’s fault
4. Them getting out of debt is Obama’s fault…wait
5. Them being on the ajc’s front page is Obama’s fault
Most of my debt is medical. Wish there was help for that
of course I could just buy a crystal ball to foresee when I’ll be affilicted with things beyond my control. Perhaps that’ll do. Or maybe, just maybe, we will have some real healthcare reform in this nation one day. Kudos to the family.
Char
April 26th, 2011
1:31 pm
Credit cards are the devil and no one needs one (even for emergencies). Most people abuse them…all you need is to set up an emergency fund instead of throwing all your money away
It's not a debt problems, per se
April 26th, 2011
1:32 pm
We were on pace to pay off our CC debt and student loans, when hubs was laid off (4th time). We have a cash flow problem…we did accumulate debt while trying to live when he had no job…while the market might be improving for some, it isn’t at our house.
rock9999
April 26th, 2011
1:38 pm
It’s amazing how this turn into an Obama bashing blog.
ZipIt
April 26th, 2011
1:43 pm
I applaude this couple for facing their mistakes (that most of us make) and taking steps to fix the problem. This story should be on the TV news so many others can see it. Maybe the government should call CredAbility.
SmittyATL
April 26th, 2011
1:48 pm
Char, I partially disagree. Credit cards are wonderful when used responsibly. It is very convenient to buy WHAT YOU CAN AFFORD with plastic, then pay one bill (in full!) every month. But they are a very poor choice for many folks. If you are paying interest on your credit cards, you are not using them wisely.
Angela
April 26th, 2011
1:49 pm
You know, rock9999, I was thinking the same thing. Poor President Obama. He is catching it for everything and from both ends!!
SmittyATL
April 26th, 2011
1:53 pm
Rock9999, it’s not hard to see why this has turned into an Obama bashing blog. The parallels are obvious. Like the Wackers, Obama and his cronies in Congress have rung up massive debt by using credit unwisely. (Of course, Obama is not the first president to do so, but he has taken it to a new level.) Unlike the Wackers, Obama and his cronies do not have a plan to repay the debt. Maybe Advocare can make a trip to Washington…
Elliot Garcia
April 26th, 2011
1:55 pm
I don’t feel sorry for Obama, Angela. If you people cannot wake up and see what is happening to this country, then I feel sorry for you.
rick
April 26th, 2011
1:56 pm
WISEGIRL – Trying to read your comments with so many gramatical errors does not make you seem so wise. If I couldn’t spell any better than you, I don’t think I would post comments.
Sell Liquor on SUNDAYS
April 26th, 2011
1:57 pm
Well since Obama is the anti-Christ, and a Muslim, naturally he would be at fault.
Sell Liquor on SUNDAYS
April 26th, 2011
1:58 pm
The govt should have called CredAbility when we lost the surplus.
tl
April 26th, 2011
2:00 pm
Another MLM to avoid is “My Harvest America”. A lot of people are trying to push this scam so avoid the first parasite that brings it up as a positive thing.
Store card user
April 26th, 2011
2:09 pm
I appreciate hearing good news stories like this one – we could use more positive examples of people who have turned their lives around and started making responsible choices!
For those wondering why anyone needs a store card: I have store cards only because some stores (Kohls and Macy’s for example) offer deeper savings if you purchase items with their cards. This can be a great tool if you continue to buy only what you need and can afford, and pay off the cards in full whenever you use them. I carry 2 rewards cards (a Discover and a Visa – for those stores that won’t take Discover) and two store cards (the aforementioned). With every purchase, I weigh the benefit of using the card, and choose the one that gives me the highest benefit (either in money saved or cash earned). I am one of those credit card “freeloaders” who has never carried a balance. I do believe a card can serve a good purpose when used responsibly!
Money is an illusion
April 26th, 2011
2:17 pm
Amazingly, middle class debt is what kept this economy going with most middle class citizens paying exhorbitant interest rates to banks to appear to “have” more than they could reasonably afford. When the economy collapsed, the banks shored up their accounts with tax dollars, and the middle class was left to fend for themselves–which is the primary purpose of the bourgeosie anyway.
The rich can take care of themselves. The poor rely on tax dollars for food, transportation and housing, and the middle class has to borrow for the very things that the poor get for free!!! Rich want a house? Buy it outright. Poor want a house? Get a voucher. Middle Class want a house? Borrow from the bank….See the scheme? Rich want to educate their kids?
The best bet is to stop allowing the banks to benefit off the fact that YOU have a job! Drive your car until it can’t be driven any longer. Pay off all your debt. Save as much of YOUR money as you possibly can. It’s the only way to keep unnecessary financial stress off YOUR back.
Sanj
April 26th, 2011
2:27 pm
Get Real People! Obama is not to blame! “Slick” Willie left a surplus which “Slow” Bush totally obliderated along with his fellow Republicans and now all of a sudden spending is a problem! Look in the mirror – the person staring back is to blame!!!
Sharn
April 26th, 2011
2:50 pm
Michael, even if you pay cash for everything, it is still important to watch your credit score. It is a factor in the insurance rates you pay for your car and home, what you are charged for apartment rent and deposits, and many employers use it to screen job applicants. Low score = risk. One way or another, you pay for that risk.
TnGelding
April 26th, 2011
2:54 pm
Cashless is king!
Christine
April 26th, 2011
2:54 pm
Should have filed a Ch.7 bankrupty and discharged all $83K in debt.
Bulbo
April 26th, 2011
2:57 pm
Good for them, I’m glad they were able to recover.
PR
April 26th, 2011
2:58 pm
This all fine and good…but what if you are unemployed and have little or no money to pay off the bill. My wife and I are boht out of work (me for 19 months) $370 a week barely covers our living expenses. Banlruptcy may be the only way out for my wife. Creit card companies could care less about you. they are nothing but legal loan sharks. Government needs to shut them all down. No money for the banks that run them. Let them fold up and die.
TnGelding
April 26th, 2011
3:08 pm
Congratulations to them for doing the honorable thing.
Eric
April 26th, 2011
3:18 pm
I definitely applaud these people for turning their situation around. But I do want to mention one thing. Everyone here is saying pay cash and do NOT use credit. Here is the problem with that. A lot of credit card companies are assessing risk right now. If you have a $5k credit line and have not used the card in sometime…a lot of those credit card companies are closing the account…which can have a fairly significant impact on your credit score…in the wrong direction. So if you are the type that can’t control yourself, then using cash is definitely wise. But if you want to maintain your credit, you need to use each card at least once a month for a small purchase and pay it off each month. If the card goes inactive, you are more likely to receive one of those letters saying they have closed your account. It has happened to me twice, and it has happened to several of my friends…all of us have excellent credit ratings. The logic the companies are using is that you have all these available credit lines at your disposal and if you run into financial difficulty, you can run up those credit lines quickly and not be able to pay them back. So utilizing your credit cards is key, but only if you have enough self control to pay them off within one or two months.
Boss Hawg
April 26th, 2011
3:35 pm
I get paying much more than the minimum payment for the credit cards balance but paying over $600 a year to credit conselors is just throwing away more money. You can get the same advice from Clark Howard, and ITS FREE.
Just Because
April 26th, 2011
3:39 pm
Sounds like another ad for CredAbility.
HENRY
April 26th, 2011
3:40 pm
bravo……..good luck folks……..wish the president would take a lesson from this
TheDJ
April 26th, 2011
3:48 pm
This is excellent news for this couple. Right out of college, I started paying off CC balances in full and didn’t charge anything I could not afford to pay off in 1 month (no frills, vacations, no new clothes, etc. for many years). After 25 years, I am proud to say that I am still consumer debt free. Good job Wackers. Spread the word.
Homer
April 26th, 2011
3:58 pm
Aren’t these two a great example of why this economic recovery is stalled? How are we going to get the economy going again if they aren’t going out every day and charging up a bunch of flat screen TVs, patio furniture, hot tubs, Bahamian cruises, Outback steaks and mojitos? What’s wrong with you people?
Jason
April 26th, 2011
3:58 pm
How about yall stop bashing credit cards and start learning how to use them. People get into trouble because they are stupid and irresponsible. Im 24 with 3 credit cards that I pay off every month. I have an 804 credit score and no debt. All it takes is responsibility, which apparently most people are lacking.
Ted
April 26th, 2011
4:04 pm
@FYI..No..A credit consolidation service may not save your score, but it has saved ME and a lot of people who were on the brink of financial ruin. The great aspect is that you are with a program that will help you if you stick with it. Furthermore, it shows a good faith effort on your part.
Banyruptcy may work for some, especially if you have very high debt IE over 100,000. However, that word alone will be a huge turnoff to a potential employer or landlord.
I shunned credit cards for a long time, but I now have only one to keep my score up and I use it only for auto repairs. Personally, I see no need to have multiple cards.
For those who are smug and judgemental, the same could happen to you or anyone, so save your harsh remarks. The may bite you in the you know what.
Michael
April 26th, 2011
4:06 pm
I see the bank sponsored messages are popping up here — honorable thing to do; credit score affects insurance rates; unused open accounts lower your score. Stop buying stuff on credit people! That insurance nonsense is a dodge — think about it — charge a bunch of stuff on credit, pay hundreds or thousands in interest, just so your car insurance doesn’t go up $10.
Buy a house on credit. Make your payments every month. Same with a car. Rinse, repeat. Oh no, an emergency water heater leak — i better use a credit card because that was unexpected. An emergency 46″ TV purchase. Emergency $3,000 spent on Christmas. Emergency gasoline put into the tank. Emergency nothing — it’s just your lifestyle.
Homer
April 26th, 2011
4:08 pm
Jason, where were you raised? You need counseling to help you with your spending problem, cheapskate.
Jason
April 26th, 2011
4:37 pm
@Homer…my spending problem? how about a lack of a spending problem. I have 3 credit cards that I use on a regular basis, racking up a grand total of less than $500/month between the 3. $200 of that is bills that I put on my card that I have to pay anyway. I pay my cards off at the end of every month. Ive NEVER let my balance roll over to the next month, not even a fraction of it. Like I said I’m 24 and debt free (aside from my mortgage). No credit card debt, car payments, student loans, back taxes, etc…
bikerchick
April 26th, 2011
4:39 pm
To Jason and others who keep credit cards for “emergencies”, why not just put $1000.00 in a savings account for emergencies? Then cut up the credit cards! We have become so addicted to plastic, we can’t conceive of life without the cards.
My husband and I have followed the Dave Ramsey plan for two years now and are debt free except for our mortgage. We use debit cards for everything, from renting cars to going to the movies, to purchasing items online and have never had a problem. Once your debt is paid off, it’s amazingly easy to start putting money into savings. We always have at least 3 months of living expenses in savings, so when that “emergency” happens, we pay for it in cash, not credit. If you can follow the Dave Ramsey plan he shows you how to pay off your debt, save for emergencies, save for retirement, pay off your home early and pay for your kid’s college with cash. Once you learn how to delay your wants and focus only on your needs, it’s amazing how much stress goes out of your life. I can sleep soundly each night knowing that if the washer breaks or the car breaks or one of us has an illness and can’t work for awhile, we will be okay because we have given ourselves a financial cushion. It doesn’t require a big income, anyone can do this, even low to moderate incomes can learn to live cash only and save money for their future needs. If you follow the program, you don’t need a credit rating and who cares about insurance rates? We keep ours low by having a high deductible and keeping that amount of cash in the bank, so if we have an accident, we cover the deductible in (you guessed it) cash. Give up the plastic people and set yourselves free!
Jason
April 26th, 2011
4:47 pm
@bikerchick. Ive got an emergency fund that is sufficient enough to handle most unforeseen emergencies in my house/car. Along with a savings account & IRA. EXAMPLE: If Ive got a cell phone bill and an insurance payment that is due each month. Why not charge it to my card then pay it off immediately? My bills still get paid, Im charged no interest and it helps my credit.