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
Paul Westbrook
April 26th, 2011
7:20 am
Enter your comments here
Michael
April 26th, 2011
7:23 am
Who needs a credit score if you’re going to pay cash? Oh, for emergencies — the scam banks cell to homeowners just like the emergencies the cell phone companies sold to parents so they would pay for expensive phone plans for teenagers. Capitalism is a life long fight against slavery. You think you are free but you are driving to work this morning to a miserable job to get money to pay the bank. Let’s just call it indentured servitude but with a subdivision house and a Chevy Tahoe.
me
April 26th, 2011
7:24 am
Enter your comments here
Time to wise up
April 26th, 2011
7:26 am
Hey government. You cannot spend your way out of debt.
Lizzy
April 26th, 2011
7:33 am
We adopted a policy a long time ago. Before buying something, you ask “Is it a want or a need?” If a need, you got it.If a want, it stayed on the shelf.
jw
April 26th, 2011
7:40 am
Someone needs to remove Michael’s post – this is a good story and great job getting out of that mountain of debt. All of us get caught up in the “trap” – it takes a lot of guts to face it head on and do something about it! Good job and good luck!
me too
April 26th, 2011
7:56 am
Truly inspiring. My family is going through a similar situation and we have also been on a “cash only” basis for about a year now. We still have our credit cards, but they don’t get used….and one day down the road when they’re all paid off, I think we’ll plan a credit card burning party…paid for in cash of course.
sharon
April 26th, 2011
8:06 am
Over and over I’ve heard that you don’t cut up your credit cards because your credit score will drop drastically. So, do you cut them up or not?
No More
April 26th, 2011
8:11 am
My spouse and I paid off $48K in credit card debt through CredAbility in early 2009. We were also able to pay off 2 cars early this year. Now the only debts we have are for monthly utilities and car insurance.
Art
April 26th, 2011
8:17 am
Great job! It would have been real easy to declare bankruptcy and go on the government dole… You’ve got to respect someone who owns up to their “mistakes” and makes things right. “Sharon” cutting up credit cards is different from closing the account; that’s what causes your credit score to drop. Keep your account open… use the card just once a year or so and your credit score will stay up.
RJ
April 26th, 2011
8:20 am
@sharon, you cut them up, just don’t close the accounts. I’ve done that and it’s worked for me. I am slowly but surely climbing out of credit card debt. I don’t have a tremendous amount of CC debt, so it’s been easier for me. I can’t imagine having $83K in CC debt. I applaud them. It gives me hope that by the end of this year I will be CC debt free!!!!
Michael
April 26th, 2011
8:27 am
Actually Art, if you file Chapter 7bankruptcy you pay 0%, it’s done in 4 months and you DO NOT go on the government dole. The banks want you to think that about yourself and your neighbors.
If you file Chapter 13 you pay 0 to 100% of the debt at 0% interest for 36 to 60 months. But you are still a slave to your credit score. In both Chapters you can walk away from that $100,000 house with the $200,000 mortgage.
cs
April 26th, 2011
8:37 am
Credit cards will, if you let them, take all your money from you. If you pay off the balance every month, they are YOUR slave. You get 30 day interest free loans. Credit cards companies call the people who pay their balance every month “freeloaders”. That one comment from them tells you what they want to do. Just like the oil companies that make $40 billion in profits every 3 months and then ask the Federal gov’t for more “help” because they can’t “afford” to drill offshore or to build a refinery (which they still have not built) to make more gas. Since Ronald Reagan, American business has become a monster that takes everything and gives little or nothing. Wake up America!! Get rid of your debt, get a job that actually does something (electrician, construction, plumber for example) and spend more time with family, not the TV and video games. It is your choice.
Cletus
April 26th, 2011
8:46 am
First sign of trouble: NINE credit cards!
JL
April 26th, 2011
8:59 am
It works, We are about 9 months away ! What a relief already..
Ntuj
April 26th, 2011
9:06 am
My wife and I have 8 credit cards(Amazon, Chase(2), PayPal, Wachovia, American Express(2), Master Card) plus JC Penny, Norstrom, Sears, Macy’s, Lowes, Home Depot, Khols and ZERO balance on all of them. ($102,000 income) WTF is wrong with you people? We use CC only if we know we can pay the balance off in no more than TWO(2) months. What about a $600 washer? BUY only when you have 6 months of free interest.
Elliot Garcia
April 26th, 2011
9:09 am
If only Obama would read this article……
Amazing
April 26th, 2011
9:30 am
To Elliot,
Your comment should say if only Democrats and Republicans would read this article. It is interesting how Republicans forget the bloated spending that began under the previous administration.
Cynthia
April 26th, 2011
9:33 am
I applaud this couple for digging their way out of this much debt. Their determination paid off and I’m glad they are using cash which in my eyes is King.
What ever!!!!!!!!!!!!!!!
April 26th, 2011
9:35 am
Obama only cares about distroying the American way and our economic system. Thats his plan. No president could be this stupid to put this distruction in play by accident. Come one. Obama will not read your article.
Elliot Garcia
April 26th, 2011
9:36 am
Yes, Amazing, it began under the previous administration and has gone “buck wild” with this administration…..So what are you going to do about it??? Obama threw gasoline on that fire…..
What ever!!!!!!!!!!!!!!!
April 26th, 2011
9:37 am
@Amazing,,,, your comments are funny as the bloated spending under the last President was done by a totally democratic controlled house and senate.
Gerald
April 26th, 2011
9:55 am
Great victory for them, only one can negotiate this deal themselves dorectly with their creditors. Then establish a “Debt Stacking Plan” (smallest to largest based on set amount you are able to pay) to get rid of the debt for good. That $50 monthly fee could have gone to reduce the debt as well. Take control and bypass the middleman!
Kat
April 26th, 2011
10:10 am
@Gerald: Obviously, this couple felt that they needed the extra help. If $50 a month gets them to the right place, then so be it. Also, you can absolutely negotiate with creditors to lower your interest rate. But, a drop from 32% to 3%? Wow! I can guarantee that they NEVER would have gotten that low of a rate on their own. Maybe down to 20% or even 18% where most rates start these days.
@Ntuj: I’m not sure you realize that your statement comes across as smug? Why not only use one card, such as a Visa or AmEx rather than carrying around all of this little store-specific cards? And, if you make more than $100k, then you should carry a balance at all – even over two months.
Way to go to the couple in this article!!!
mojo
April 26th, 2011
10:13 am
Please don’t say charging it is the American way(as stated in the article)…there are many of us that go without the “nicer” things just so we can pay for it in cash!
Shaft
April 26th, 2011
10:15 am
Declaring bankruptcy doesn’t allow you to easily “go on the government dole” like it used to before the reforms.
I filed Chapter 13 in 2005 with $75,000 in debt – my bankrupcy was discharged in November 2010 (yippee) – I paid EVERY penny of the debt that I owed.
I wasn’t eligible for Chapter 7 since I have a good income – those days of just filing and not paying anything are over. I tried CredAbility – it just didn’t work for me.
However, congratulations to the couple in the article – I know first hand how good it feels.
teacher
April 26th, 2011
10:15 am
It does take discipline, but you can get yourself out without having to wimp out and declare bankruptcy or abandon your house. Man up people!
Savvy
April 26th, 2011
10:42 am
Congrats to the Wackers!! So sorry this great article about you, turned into politcal fodder.
Tennis Player
April 26th, 2011
10:54 am
First, to Courtney and Michael Wacker, GREAT JOB!!! It is a great feeling to be cash only.
To all those that feel a credit score is important…think about this, what is a credit score used for….CREDIT. Move to a cash system, and that credit score is less and less important. Also, if you have 20 percent down on a house…banks will be less concerned about your “credit score”…same goes for a car.
Mishap
April 26th, 2011
11:01 am
@Tennis Player,
Banks still care about your score regardless if you have 20% down. I brought 30%+ for my car and it still took a little hunting and walking out on gouging dealers to get a good interest rate. When it came to my house, I brought 20% down, ~9% debt load w/ the aforementioned car, and a mortgage less than 2X my annual gross(for a regular W2 job I was at 3 yrs at a certain company that created the credit score). They still had me detail every minute detail of my income, retirement accts (down to ones w/ 2k in them), and my tax returns for my entire work history.
Also, you need credit to even get a cell phone on a contract. It may not be a very high bar but it’s a hurdle if you’ve blown up your score.
sugarapple
April 26th, 2011
11:23 am
Congrats on a significant milestone in your life. I am now trying to reduce my 23,500 credit cards debt.
I am paying cash for everything now and will save to buy my next auto cash and it will be a used auto.
God bless
KenneMa
April 26th, 2011
11:27 am
Courtney and Michael – GREAT JOB! You both should be so very proud of yourself. Not only did you help your family at this moment, you taught your children a very valuable lesson as well. Congratulations!!!!
Angie
April 26th, 2011
11:36 am
If you think you can negotiate lower interest rates with your credit card companies on your own, you are DREAMING! With the new government regulations in place controlling the fees they can charge, they have no incentive to lower your rates. I tried negotiating with all my lenders before signing on with Credability. None of them would work with me. After I signed on with Credability, only one called me to offer to negotiate directly with me. I negotiated with them but left all the other creditors with Credability. I now have a payment plan that works, have made significant changes in my spending choices and am working toward being credit card debt-free. I made the mess myself and I am working to get out of the mess.
semausmom
April 26th, 2011
11:36 am
They did a fantastic job! Kudos to them…
We read Dave Ramsey’s book entitled The Total Money Makeover. It’s an awesome book. We paid off 3 credits cards since December using his debt snowball technique. We plan to be free of consumer credit card debt by the end of this year. The whole credit card thing is such a trip. It’s easy to get into and hard to dig yourself out of, but you can do it with hardwork and focus!
DDB
April 26th, 2011
11:42 am
Great Job to The Wackers! My fiance and I did not have quite this much debt, but we will be completely debt free of our $18,000 debt in a little less than 2 months! How? Because Dave said sell the car!!
WISEGIRL
April 26th, 2011
11:42 am
WHY IS IT OBAMA”S FAUGHT WHEN NOT SO BRIGHT BUSH AND DADDY GOT US HERE???
WISEGIRL
April 26th, 2011
11:46 am
why is it obamas fault, when not so bright bush and his daddy got us here. are they thinking about ‘america” now, heck naw, they on the ranch getting richer and laughing cause yall so dumb just like them!
bisbell
April 26th, 2011
11:46 am
reminds me of an old Saturday Night live skit. “If you don’t have the money, don’t buy things!” Hilarious skit because it’s so true, yet no one adheres to it.
WISEGIRL
April 26th, 2011
11:47 am
daddy bush and offspring are on the RANCH laughing at AMERICA..they screwed it up and can careless
Dirk the Jerk
April 26th, 2011
11:49 am
It’s interesting how a bunch of saps have convinced themselves that not declaring bankruptcy is some kind of righteous honor thing. The banks and Donald Trump laugh at your naivety.
Marci Girardin
April 26th, 2011
11:51 am
I aplaud both of you. There’s nothing like financial freedom. I think debt-free should be the new status symbol! Congratulations!
W
April 26th, 2011
11:57 am
Ntuj -You Da MAN – 8 Cards and $100k+ a year…I am sure you will never be in debt.
Keep drinking the kool-aid WISEGIRL.
PAY CASH PEOPLE…CASH IS KING.
FYI
April 26th, 2011
11:57 am
Going to a credit consolidation company like they did DOES NOT SAVE YOUR CREDIT SCORE…seek advice to find out if filing BK may be a better alternative..sad to say it but when it comes to the credit system..BK wins over credit consolidation..2 years after filing BK you can buy a home again under FHA guidelines.. the same will not apply when doing debt consolidation over 5 years…
I think its great that they did it..but each person’s way to handle a financial crisis is an individual decision(no I did not file BK nor do I have debt nor am I a lawyer)
FYI
April 26th, 2011
12:00 pm
I also agree w paying cash..I have been doing that for years..credit card is only for emergency purpose..all vacations, paid for, college education paid for..I love it!..
It is quite obvious ...
April 26th, 2011
12:03 pm
…. that WISEGIRL is a MORON.
MH
April 26th, 2011
12:10 pm
Congrats to the Wackers – awesome job!
For those of you cash only folks that think that you don’t need a credit score or history, think again. Your credit worthiness or lack there of will follow you around forever, and either limit you or help you tremendously. Everything from insurance rates to employment relies on your credit credit score, and NO it’s imporance is not going away. You cannot exist in modern times without credit. It will cost you more if you can’t prove you are worthy. Cash only is a good thing, but it will cost you more!
Mer
April 26th, 2011
12:15 pm
Been through this. Was $49,000 in credit card debt due to carrying over debt from ex-husband and putting taxes on a credit card. I’m now down to $17K in debt and should be paid up by September. I still use my Delta Skymiles card (Amex) for almost everything and use Skymiles shopping rewards (you get 2-5 miles for every purchase made). I don’t trust using my debit card over the internet. I pay tons of $$ towards my Amex balance every month. It’s been a struggle, but I’ve come a long way.
gagirl
April 26th, 2011
12:20 pm
I agree that ‘Ntuj’ came off as smug. Good for you that you make over $100k/yr. But what is the need for EIGHT cards??? Seriously? You just blew any credibility with that statement. You seem to be bragging yet Sears has one of THE highest interest rates. I don’t know what one could possibly charge at Kohl’s either. Oh well, to each his own. Visa is accepted everywhere so I roll with my ONE card which is for emergencies only. At any rate, I am debt-free (w/ the exception of my mortgage) and loving it. Financial freedom changes the game entirely. I know what it’s like to duck and dodge phone calls from creditors. It is no fun. All of the things I thought I had to have, I did not. I am still breathing w/o them. Kudos to all of you currently trying to get out of debt. I applaud the couple in this article. It may not be easy but it IS worth it.
Marina Mejia
April 26th, 2011
12:23 pm
I’m calling them soon and setting up an appointment!
concha
April 26th, 2011
12:41 pm
I had $42,000 of credit card debt with some cards interest rates as high as 24%…I paid that debt of in 4 1/2 yrs.I enrolled in Consolidated Credit. the highest interest rate on any of my 7 cards drooped to 4-11%….It was hard work but I did it…Also, i do nit make a lot of money. Now, I am realizing that because you did a consolidation, it does affect your credit score…It shows on your credit report that you were in a program to help manage your debt.
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.
Alphare
April 26th, 2011
4:59 pm
“It’s the American way”?
No. It’s only a way for some Americans. Most Americans don’t foolishly charge cards they know they cannot afford.
bikerchick
April 26th, 2011
5:08 pm
Jason, If you have the ability to pay off the card at the end of the month, that’s great, but what happens if you lose your job tomorrow and the day after that, your car breaks down. How would you pay off that balance at the end of the month then? Some people can manage credit cards with military-like discipline all their lives and that’s great, but invariably, at some point in time, that credit card is going to cost you, either in interest, in spending more than you should in a moment of weakness or in annual fees. Using credit cards is fine for some, but for most of us, it costs us more than it is worth.
Jason
April 26th, 2011
5:25 pm
@bikerchick If I lose my job I would still have enough money in my bank account to cover my necessary bills for the next 2 months. Plus the emergency fund. Plus my vacation fund. Ive learned from watching other peoples mistakes not to live check to check. My cards have never cost me anything, they pay me. Ive never been charged interest in the 6+ years Ive had a credit card. I only have cards with no annual fees. I have better discipline than to spontaneously charge a $1500 tv or something similar. My credit cards pay me for using them either with cash back, sky miles, etc…
Brad
April 26th, 2011
5:40 pm
I use credit cards for EVERYTHING that I can. I then pay them off in full every month. I’ve been doing this for 20 years and I’m sure the credit card companies hate me
Using credit cards allows me to
1) Earn Interest on the float of MY money in my bank account
2) Earn points / miles / etc., which turns into free trips, merchandise, cash back etc.
3) Carry a minimum amount of cash: very little risk of ever losing money from theft or some fault of my own
4) Never carry or use an ATM/debit card so I never have to worry about someone stealing it and emptying out my account, causing cascading problems with my finances.
5) Manage my finances – I have a record of everything I buy, so it’s easier to keep up with my money and where it is going
6) Always have buyer protection on everything – If I have a problem with anything, I just call my credit card company and they have the charge removed – I’ve never lost a dispute
7) And, on occasion, some charges never show up on my statement, so I get that service/product for free (you would be surprised at how often this happens if you use cards for everything)
How do I do this? I’m not rich, I know how much money I can spend per month and I never spend over that amount. It’s all about managing your finances responsibly.
Cash sucks. If you are using credit cards to loan yourself money, you are doing it wrong. Don’t stop using credit cards, just start using them correctly.
-Brad
mojo
April 26th, 2011
5:54 pm
Jason..you are wise beyond your years. Starting off right when you are 24 will only lead to a very stress-free,debt free existence. My husband and I did not even qualify for a credit card until we were almost 30(this is many years ago) and I am SO thankful for that! I don’t think I could have been as disciplined. Kudos to you!
Shaft
April 26th, 2011
6:09 pm
Whatever Jason – you think you have it figured out but what if you lose your job for an extended time? You’ll be using those credit cards to get by – wait until you have kids (if you have any) – your days of no bills will be out the window!
Jason
April 26th, 2011
6:12 pm
No problem, Shaft – I can always go back to dealing drugs.
Neil
April 26th, 2011
6:21 pm
It is funny how many middle and low income people will read this story and feel great about the couple who got themselves out of debt. What they fail to consider is how you get to be so irresponsible that you charge that much on credit cards, and they also fail to see the analogy with the federal gov’t.
This story is a perfect analogy for the US gov’t…don’t run up huge bills on a credit card that you may never be able to payoff. Live within your means…make sacrifices and a realistic budget. Do you think the “gimme” constituency will get the moral of the story?
Chris
April 26th, 2011
6:43 pm
Its possible to wipe out debts . . .
Bubba
April 26th, 2011
6:46 pm
Hey losers ,pay Your debt. its only your fault, not the banks. You liberals always think its someone else because you live a miserable life.
the real Old Gold
April 26th, 2011
7:43 pm
You don’t need the credit council scammers….. Just pick up “Total Money Makeover” by Dave Ramsey. Or listen to his show or podcasts online. He’ll get you out the right way.
Neil
April 26th, 2011
10:58 pm
Actually it’s pretty simple to avoid these kinds of credit card debts, just like it’s simple to not become a fat lard ass, but so many people are these days.
If you don’t buy things you don’t need, and you only use cash that you’ve saved up for purchases you need to make, then you won’t accumulate $83,000 in credit card debt. $83,000 in debt? What are these dumb asses planning to do for their retirement….live off the taxpayers?
The same thing is true for become a lard ass. Don’t eat the twinkies and get off the couch….simple. Take in less calories than you expend, and you’ll lose weight. Spend less money than you earn, and you’ll save money and not accumulate debt. It is incredibly simple, yet so many fail to grasp the concept. Stupid is as stupid does.
Trollin
April 27th, 2011
1:48 am
Who was it that said “Deficits don’t matter?”*
Bonus Question: Who was the last president to have a budget surplus?**
Clues: *Republican **Not a Republican
Clueless: Anyone who votes Republican
Pro athletes who've gone broke | The Biz Beat
April 27th, 2011
6:35 am
[...] I wrote about a Gwinnett couple who managed to pay off $83,000 in credit card [...]
mojo
April 27th, 2011
7:29 am
totally agree with Bubba and Neil…I would love to have five coach purses and plastic surgery…but for now I will deal with my purse from Belk and make up to hide the wrinkles. I am not saying that is what this couple spent their money on,however, must have been some extravagant items to have 83K in debt. I clip coupons, cook at home a lot to save money and am doing just fine!
How One Couple Dug Out From $83000 In Credit Card Debt | Financeation
April 27th, 2011
8:06 am
[...] Gwinnett couple conquers $83,000 of credit card debt [AJC.com] [...]
TnGelding
April 27th, 2011
9:09 am
If you’re healthy you’re wealthy!
Live within your means and don’t be petty and mean. Create, don’t destroy. The world will be a better place and you’ll be a better person.
Moerbeck
April 27th, 2011
2:08 pm
I am on an austerity plan as we speak. I earn a high income but want to get out of 20K of credit card debt fast. Since February, my wife and i are on a cash-only basis for mostly everything and it’s working out great. I think we should be done in August paying off the debt… credit isn’t evil. Frivolous spending is absolutely evil and gets people in trouble.
Get Out Of Debt By Switching To A Cash-Only Policy | Lifehacker Australia
April 27th, 2011
4:03 pm
[...] Gwinnett couple conquers $US83,000 of credit card debt [AJC via The Consumerist] Tagged:debtsaving money [...]
tom
April 27th, 2011
5:54 pm
I have lived an all cash life for the past three years. I have one credit card I am still paying off and three other credit accounts I am paying on. My credit score is 550 and was able to purchase a new car in Nov. Interest rate is 20%. No other bank would give me a loan. I have eliminated three other credit card accounts by paying off the one with the lowest balance first. Min payments on all accounts expect the one I am targeting. I have gotten good with the cash only concept. I pay my bills first of the month give myself an allowance for the month in cash divided by four in envelopes. It works for me and I actually have money left over at the end of the month. Suck it up and sacrifice for your future. Be free.
Get Out of Debt by Switching to a Cash-Only Policy [Debt] | That Soviet Guy
April 27th, 2011
7:31 pm
[...] Gwinnett couple conquers $83,000 of credit card debt | AJC via The Consumerist You can follow Adam Dachis, the author of this post, on Twitter and Facebook. If you’d like to contact him, Twitter is the most effective means of doing so. [...]
Tomas
April 28th, 2011
9:40 am
Great Story. You should also read the “Total Money Makerover” by Dave Ramsey. My wife and I are able to put over $1000.00/month towards our debt by just being smart with our money. Also, cash is king. Ntuj was stating how he has 8 credit cards and he pays them off that month or in the lastest, 2 months. That is great but if he was to walk in the store with cash looking for a $600.00 washer, he would be able to negotiate a lower price which is better than 6 months no interest.