Credit card debt

Discussion in 'Teacher Time Out' started by linswin23, Nov 29, 2016.

  1. linswin23

    linswin23 Cohort

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    If you've gotten out of using credit cards completely, how did you do it? My husband and I are looking to go credit card free, but it's a struggle.

    How did you do it?
     
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  3. mathmagic

    mathmagic Enthusiast

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    I'm not much of a spender (ha, with the exception of building my classroom...I may have ordered 110+ books in the past couple weeks :p ), so that certainly helps, but my wife and I both have credit cards, usually paying for everything with them, and then either immediately or shortly after pay the balance off on the card. Basically, it allows us to build credit, spend a bit less (due to the money back), and have additional protections, because we act as though it's a debit card. Never spending what we don't have.

    Is it more just trying to avoid using credit cards, or is it more trying to get out of debt? If it's the latter, set a budget for sure - break down everything you spend each month and see where you can save some money (while still allowing yourself some fun), and hold yourself accountable to that. If it's the former, I'd consider the above - that they aren't bad, so long as you utilize them as you would a debit card, and pay it off immediately/soon after.
     
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  4. waterfall

    waterfall Virtuoso

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    I tried the "envelope system" with cash only this past summer because I realized I was one step away from going into credit card debt. It was a good place to start and helped me see how much the "little things" added up. I've since tweaked the system to work for me. I personally didn't like having all that cash around and all the different categories were a lot to manage. I pay all of my regular bills first thing every month (I get paid monthly, so this makes it easy) and then give myself a flat weekly budget for absolutely everything else (gas, groceries, entertainment, any other shopping or services, etc.) Basically if it' s not one of my regular bills it comes out of that weekly budget. I keep a running google doc of what I spend per week. I still mostly use my credit card- I figured if I was disciplined enough to stick with the envelope/cash system, I'm certainly disciplined enough to actually stick to my budget with the credit card. The google doc is on my phone so I have it right there with me to easily update any time I spend anything. Anything I don't spend from the weekly budget goes into an "extra" fund that I can use when I need it. My budget is already set up so I'm saving money each month, so I don't touch that money...it's only what I don't spend from my weekly budget that I can save up to use on "fun stuff" later. With the saved money I don't touch, I've saved about $2,000 since mid-summer, and I'll have enough in my "extra" fund from leftover weekly budget money to buy Christmas presents.
     
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  5. John Lee

    John Lee Groupie

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    I've thought a lot about this, and credit cards are really something we have poor education for... Credit card debt really is a modern form of slavery. Essentially, your slavemasters (Chase bank, Amex, etc.) get money (i.e. work from you) for nothing.

    I can't offer advice on how to get out of it, since it basically means you need to earn a lot more money. It took probably a good 15 years and a helpful parents to let me get out from my own mounting debt. Today, I still use my credit card regularly (because it builds credit... again, a complete scam)--but I pay it off in full every month. In other words, credit should be viewed as an illusion. If you have the money, use credit cards. (If you have the money, why use credit cards?) If you don't have the money, you can't use credit cards. (If you don't have the money, that is why you need credit cards.)
     
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  6. Caesar753

    Caesar753 Multitudinous

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    We just use our debit card for everything. Since it's connected to our checking account, we can't spend what we don't have. We save up for bigger purchases. It's nice because we rarely have payments on anything--even our cars are paid in full at the time of purchase. The only thing we use the credit card for is vacationing, and that's mainly just to keep the credit card in good standing so that we can use it in case of emergency.

    We used to use credit cards regularly and carried some credit card debt. We got out from under that by quitting spending on the cards, like cold turkey, and paying as much as possible each month.
     
  7. ChildWhisperer

    ChildWhisperer Groupie

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    When I got my first credit card, I made a habit of paying it in full each month so I never had debt and still don't! It also helps when the credit card has cash back rewards. All 3 of mine are the cash back kinds, which is nice! Those 1-5% really do add up & it's like getting free money!
     
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  8. linswin23

    linswin23 Cohort

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    Glad to hear everyone's experiences. My husband and I need to be more disciplined with making sure to pay off the balance. We are working on a plan to do this and then eventually not using them for a while.

    I'm in my late 20s and my husband is 30. We were never really taught about credit (not an excuse!), and unfortunately have learned the hard way (more than once). We are tired of digging ourselves into this hole, so we decided to quit using credit cards. Luckily, the only other debt we have is my husband's student loan. The loan has a great interest rate and we've done a great job paying it down, so the balance is 12,000 right now.
     
  9. ChildWhisperer

    ChildWhisperer Groupie

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    You can do it! I'm 28 and I'm debt free. I paid off all my school loans and car loans a year & half ago!
    It probably helps that I'm super frugal though. I never waste stuff and never buy anything unnecessary unless it's on sale and I really love it :)
    Even my preschoolers know to "use one pump of soap" and "only one paper towel!" and "use both sides of the paper!" :D
     
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  10. MetalTeacher

    MetalTeacher Companion

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    I also run on the "use the credit card, pay off that month as soon as it's billed" cycle. And mine's a cash back card, which I'm hoarding until I finish undergrad. But I don't plan on ever having more than one credit card, so I can't possibly get out of control with it.
     
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  11. linswin23

    linswin23 Cohort

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    Husband and I sat down and looked at our credit card debt. We figured out a way to pay it ALL off in the next year and a half. We are really excited about it. Our biggest issue was travel. We live in Korea and for the past two years have been traveling all over Asia on school holidays.

    This means we will definitely have to cut back on our trips, but I'm confident if I plan more in advance we can still travel while paying off our credit cards. We decided we will only use our debit card for travel expenses here on out (booking flights, hotels, etc). This will require me to be more diligent in my travel planning, but I love planning trips! We got in the habit of taking spur-of-the-moment trips here and there, and that adds up. I don't regret any of it, though. We've both got income coming in and are taking chunks out of our cards, so that's great.
     
  12. mathmagic

    mathmagic Enthusiast

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    For travel, you might look at some of those cash-back sites, too, as often times if you go through their site, you'll get an additional percentage off. Since we rarely travel by plane / stay in hotels, it doesn't benefit us much, but it could add up for you two! Good luck with paying it off - it'll be an amazing feeling!
     
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  13. a2z

    a2z Virtuoso

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    Nope. Making do is what we really have a poor education for.

    The majority of CC debt is due to not understanding wants and needs or lack of impulse control when someone does know the difference. There are times when people fall on tough times where CC debt happens because there is no other way (but that is rare).
     
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  14. linswin23

    linswin23 Cohort

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    I agree to both. I'm a perfect example of lack of impulse control! I've gotten better as I've gotten older, but this is something I need to personally work on. I'm not blaming this on American culture or my family, but I come from a family who heavily uses credit cards. Although my credit card debt is not huge, I want to get to the point where I no longer use credit cards.
     
  15. blazer

    blazer Connoisseur

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    We are the other way. Use a credit card whenever possible. One you get the rewards and two you don't carry round large amounts of cash. However you have to stay within your spending limits and always pay off the balance every month. If you can't afford it in cash then you can't afford it on a credit card. Plus using the card gives you extra protection on things like refunds for faulty goods or goods not delivered.
     
  16. ChildWhisperer

    ChildWhisperer Groupie

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    What, super cool! Are you both teachers there?
     
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  17. linswin23

    linswin23 Cohort

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    I want to get to this point, but I think the best thing for my husband and I right now is to take a break from credit cards. Once we get them paid off and we spend some time away from using them, we can look into possibly getting a card that we use solely for travel expenses where we earn miles or rewards.
     
  18. linswin23

    linswin23 Cohort

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    Yes! I work at a small international school and my husband works at a kindergarten teaching ESL. :) It's super fun.
     
  19. ChildWhisperer

    ChildWhisperer Groupie

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    Awesome! My hubs and I are going to try to visit Korea next year! (I'm Korean, but I've never been there. And Hubs loves Korean food but I can't cook it so.....) Have you learned any of the language? Was it easy/hard?
     
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  20. linswin23

    linswin23 Cohort

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    That's awesome!!!!!!

    I just started taking Korean classes. I've been here almost five months, and have picked up a few basics, lol! Not as much as I should! Since Hangul has an alphabet it's not too bad! I can read it (slowly), but since my vocabulary is really low I have no idea what it means! With more practice I will definitely learn more! What cities would you go to?
     
  21. TeacherNY

    TeacherNY Phenom

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    I use cash for most things. I have a debit card linked to my checking account so if I have to order something online I will use that and then make sure it's noted in my checkbook. I also keep a certain amount of emergency money in checking account (not a savings account although you could link a savings account to your checking account for easy transfer) but it's only for emergencies like surprise auto repairs, etc. It's not there to use for groceries or clothing or dinner out. If I don't have cash for that stuff then I guess I'm out of luck and not buying it. That way there's no reason to use a credit card. I do like the envelope system and use that for things like my car insurance bill.
     
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  22. ChildWhisperer

    ChildWhisperer Groupie

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    Oh yeah, I can read it with no problem. Understanding it is a different story!
    I don't know where I'd go. Seoul and Jeju Island for sure. Not sure where else..
     
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  23. Ms. I

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    It's really easy to get into the habit of just "putting everything on the card", but it definitely takes a little discipline. All of the following tactics helps:

    - only use card for emergencies &/or unique situations, holidays ONLY, etc. (as long as not regular basis & on everyday things like groceries, morning coffees, etc. that you get all the time)
    - pay off in full when the next bill for it comes or ASAP
    - don't use again until the previous balance has been paid off
    - make more $$ somehow to pay it off quicker
    - have will power to NOT get that...fancy Starbucks coffee, new shoes, magazine, etc. Little things that are a couple dollars here & there add up
     
    Last edited: Dec 9, 2016
  24. TeacherNY

    TeacherNY Phenom

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    I know some people who put everything on their credit card because they get rewards when they spend a certain amount. If it benefits you in that way I can see how it's enticing to use the card. As long as you can pay it off at the end of the month then it's worth it. If you end up paying interest then it's not really worth it in the long run to get the rewards.
     
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  25. ChildWhisperer

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    That's what I do! All of my credit cards offer cash back rewards, and I always pay it in full every month, so it's definitely worth it for me :)
     
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  26. waterfall

    waterfall Virtuoso

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    I do that too. I get a few hundred dollars of cash back every year, so it's definitely worth it. I would pay my bills with a CC if I could (and still pay it off right away of course) to get more cash back, but they all charge a fee for that now so it's not worth it. I do use my CC for everything else.
     
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  27. blazer

    blazer Connoisseur

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    My main card does not give back cash but loyalty points that you can then exchange for all sorts of stuff. the card is run by a supermarket chain (Tesco) and so the points can be added to the loyalty points from shopping (so use your card in store and get double points)! We then exchange these points for all sorts of good stuff. On our last visit to the USA the points paid for our airport parking. We have had vacations in Italy and the US paid with the points and regularly exchange them for meals in restaurants and for museum entrance fees.
    I only really have my other cards to use abroad as the Tesco card is very expensive to use out of the UK.
     
  28. MissCeliaB

    MissCeliaB Aficionado

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    We have Southwest rewards. We pay for everything we can on our card, including our mortgage, bills, etc. We never pay to fly anywhere anymore,and it lets us afford to take a few extra trips each year!
     
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  29. Ms. I

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    I guess yes, if there's cash back and/or other bonuses, then yes, use it. I used to use a card that gave me Nordstrom points!
     
  30. John Lee

    John Lee Groupie

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    I disagree. I'm all for personal responsibility, but I do not blame people for getting in deep with CC. When I was in college, there was a booth that offered CC sign-ups for college kids... they even enticed you with a new cotton t-shirt!

    What happens is that you "buy "an innocuous pair of pants and shoes ($200). Or you go on a date and pay for it with your CC because you're a baller now. I would not call these impulse control issues... it is a lack of education on managing debt.

    What then happens, is you can't pay off that debt because you are a broke college kid. Then, you buy another cool shirt, and maybe you get a flat tire on your car... and you buy a a few little things over the next couple months. $200 has now become $700, and Christmas is coming up...

    We are taught all about the dangers of drug abuse, promiscuous sex, alcohol. Who EVER mentions credit? No one.
     
  31. blazer

    blazer Connoisseur

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    Please keep that a secret from Mrs Blazer, she loves Nordstrom and spends all my money in there when we visit Chicago!
     
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  32. waterfall

    waterfall Virtuoso

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    I guess we were lucky- at my HS they talked about the "dangers" of credit cards all of the time. We used to have people come in and speak about various "life" topics (getting into college, alcohol/drug abuse, etc.) and credit cards and managing money was part of that. Usually they told us to pick one specific expense and only use the credit card for that to build credit (like use it every time you go out to eat, or use it to get gas), and of course pay the bill off in full every month. They showed us how much more you would end up paying if you only paid the minimum balance. I also remember some of my teachers just thinking of it as some random "teachable moment" and going on about not using them at all. I remember my government teacher somehow working that into the conversation on a regular basis! My own parents really, really harped on about it at home too- honestly, I'd say I heard more about that than topics like alcohol or drugs. It was so ingrained that it would truly never occur to me to pay anything but the full bill every month.
     
  33. a2z

    a2z Virtuoso

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    I don't buy it, JohnLee. Except for the true emergency, when is spending money beyond what you have anything other than impulse control? Anyone using their CC to make purchases they don't have the money for are deciding to spend more money than they have. They also know they don't have a money tree that will make the money for their overspending available.

    Actually, even when I was in HS and college teachers talked about CC and CC debt. Our HS and MS talked about it every year. Our state has a required elective about money management and finances. Kids still get in CC debt because of impulse issues (wanting shoes when they don't have the money for it).

    You know if you don't have money for something and you buy it, you must pay it back. You just don't care at the time because you want what you want even though you can't afford it.
     
  34. John Lee

    John Lee Groupie

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    Compounding interest isn't taught in schools, maybe your school was the exception. (e.g. the difference between a 17% APR and a 8% APR). Everyone (adolescents) knows you have to pay things back, I know. Just like everyone knows that having sex could lead to pregnancy, or drug use could lead to overdoes. But you don't the realize the implications of your actions unless you are told.

    We try to mitigate teen pregnancies through sex education, or ODs through drug education. With debt, there is nothing that helps kids realize those implications (purchases re: compounding interest).
     

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