We’ve all done it. Succumbed to the allure of saving 25% off our purchase by signing up for yet another credit card ( and of course since you are getting 25% off you buy more) saying I’ll charge it now and pay off the whole bill when it comes but might as well get that discount now. Or you are someone with poor impulse control and have to have those jeans or that bag or (my personal kryptonite) the latest gadget that just came out and you don’t have the cash on you when you are in the store per se so you will just charge it and worry about it later.
That is how I ended up $80,000 in debt.
I would charge the new clothes, new phone, new game, the dinners with all my unemployed friends that didn’t want to go out and I did and had to pay for them because I forced them to come out when they had no money. No I’m not a loser just someone who always needs to be in control and what better way then paying for everyone to have a good time?
Then how come my bills were spiraling out of control?
The emails would come that my bill was ready - couldn’t have paper bills come to my parents house and have them see just how much money I was wasting - and my jaw would drop at the number of the overall bill but then I would just look at the minimum payment due (started at $10 but was inching closer month by month to $500-600!) I would pay the minimum on all my cards just to clear enough on them so that after spending my whole check paying them off I still had something to buy my metrocard and lunch with till I got paid again. It was a vicious cycle.
Then I decided I couldn’t live like that anymore. While I’m not too proud to weasel cash out of the ‘rents for something fun on occasion, I couldn’t quite ask them for all that money. And claiming bankruptcy, while a viable option, was not someone who was a finance major and worked in a bank would let themselves do and destroy my credit rating for the next 12 years.
So I contacted a debt consolidation agency. I had to bring in my last two paychecks and all of my bills. Because I was always fanatic about at least paying my minimum payment, and on time, the credit card companies where amenable to the credit counselors proposed settlements. Aside from my debit card and my American Express (has to be paid in full every month so I couldn’t get in trouble) I got rid of all of them and lived a very budgeted life for 5 years slowly paying off all of the computers and clothes and bags I enjoyed. I had to make changes to my life to live on such a small amount of money but I was fixing my financial future.
When anyone I know starts complaining about their bills I tell them how much this helped me. Some are thick-headed and think its a scam but I assure them if they look up the credit counseling agency on the better business bureau website, they can be assured that its on the up and up and knowing what you owe out is becoming a smaller and smaller number, and the creditors won’t call anymore, greatly improves your quality of life. Plus you are paying a budgeted amount every month so no more surprises, you know exactly how much money you need to come up with the X day of each month.
In my opinion, debt consolidation with a credit counseling service is definitely worth it. If you have bills, it will never hurt to just go meet with one and see what kind of budget they have to offer you.