Posted on 09/22/2012 4:32:36 AM PDT by SoFloFreeper
Jerry Bailey, a minister in Jackson, Mich., says he feels as if he has been given back his life. It's a dramatic statement -- and the story behind these words is, indeed, pretty extraordinary...
It was 2005, and the couple had rung up approximately $92,000 in charges on their credit cards. At one point, they had 17 of them.
(Excerpt) Read more at m.aol.com ...
$92k on 17 cards? I can’t even imagine what the yearly interest payments were. Glad to hear they are zeroed-out now. Keep 1 or 2; cancel the rest and destroy them. Pay cash if you can.
Used no credit counseling service, just listened to Dave Ramsey.
IMHO, reading thru the link, it looks more like a promotional story for a specific “credit services” operation.
I don’t get why there are 7 pages to this story. Each page is about a paragraph long. They’re not even driving ads on each page. Stupid format.
Credit card debt needs to be avoided, especially at the usurous rates they charge. Everybody with debt problems is there primarily because of credit card debt. But eating beans to pay off your mortgage, especially at today’s fixed rates? That IMHO is foolish. Refinance to a current low fixed rate. In a few years when interest rates are back up where they belong, you will look like a genius sitting on your 3.5% mortgage. If you are into the austerity thing, then eat beans and amass cash or take advantage of today’s great real estate bargains.
What would even been better if they never acquired the debt.
Yeah, notice that they had expected to have their mortgage paid off by 2013. Why not just refinance and pay off the cards?
7 page format kept me from reading it
I use cards on purpose to drive up my credit score. Of course they are set to pay in full every month. I purchased a new car this month and that score gave me 0.9 at the Honda dealership. Total cost of interest is less than 500 after 5 years. I’ll take it.
I believe this couple learned quite a few lessons along the way of eliminating debt. Discipline is a powerful vice.
Congratulations, Mr. Bailey!
I cut up my AmEx card in the late eighties, and never looked back.
In a few years, assuming you’re right about interest rates being back up, they can put the money formerly being spent on a mortgage payment into an interest bearing CD or moneymarket account and look like a genius for being paid interest instead of paying it, regardless of how “cheap” the interest they were paying might appear at that time.
What you’re advocating is the sort of advice I was hearing along about 2005, that fueled the refi and home equity line boom, home equity was regarded as money laying unused.
We see how that turned out.
“...why not just refinance and pay off the cards?”
Because you don’t move unsecured debt (cards) to secured debt (house) especially if it’s you primary residence!
I’d rather take my chances working through the credit card debt than losing my house to foreclosure.
What you are both talking about is opportunity costs. Which for a homeowner is whether it is better to have the money in hand (bank?) or to pay off the mortgage quicker. The big question is what does the homeowner consider the likelihood that interest rates on savings (or investments) are going to be higher than the interest rate on that loan.
Considering the way I was wrong on how interest rates would move in 2006, I am currently using maturing CDs to pay down my mortgage.
So did I, but after I got over 810, I backed-off on cards and am down to 2 now. I paid-off my mortgage 30-yrs ago, and always buy vehicles/equipment for cash now, so those are factors in FICO anymore. I’m due for another free yearly set of reports from the 3 reporting agencies, in December.
I’ve been debt-free for many, many years, and it feels great. I hope they learned that lesson, too.
Very well. I am in debt on mortgages but have tenants paying it. I am in debt on my new car because I believe the rate of inflation will erase the interest. The principle remains.
People need to take a class on money. It moves and it is helpful to know where. God Bless
Good advice for high income, high net worth individuals isn’t necessarily good advice for individuals of more modest means. I aspired to the former category and came quite close, but had my proverbial @ss handed to me in 2007, so now I find myself in the latter. My gut strongly tells me to shed the debt, wherever possible. The consequences of no longer being able to service the note far outweigh any putative future benefit, and the future is far from certain. It’s as uncertain as it’s been in my lifetime.
We have several credit cards, but zero credit card debt. ALL cards get paid off every month. The cards we have are mostly "store cards" which give cash/credit incentives for shopping ther, which we already do. One card is issued through our credit union. House has no mortgage, both cars bought for cash. I think we've been debt-free for twenty years now.
Both my wife and I came from (relatively) dirt poor but hard-working parents. We both earned PhD's in chemistry paid mostly from our own earnings/scholarships and "some" student loans. We paid off the student loans in five years after graduating. Both sets of parents imbued us with a work and save ethic (they all having lived through the Depression).
Today's younkers don't have a clue.
Great to see it can be done!
This can be done without the “credit services.” Debt Proof Living is just as good and very inexpensive. A person can buy the book and make it work. I’m afraid that with Obamawan we’ll never be able to get out of debt.
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