Category Archives: Personal Testimonies

Switch Debt on High-Rate Credit Cards to Low-Rate Cards to Pay Off the Debt Faster

Raymond Reiss

In the early nineties, we were $20,000 in credit card debt and paying something like 18.5% or 21% interest on each one. We got out by getting new cards with “come on” low teaser rates for 3 months. We transferred the most expensive debt to the cheapest card, and then paid as much as we could as fast as we could on the card with the highest interest rate. We would make progress on that card, while making just minimum payments on all the other cards. Whenever the teaser rate period expired the company would then charge a predator interest rate, so we cancelled that card and transferred the amounts to yet another new teaser card with a new low rate for a new 3 month period. As the debt for one card was completely eliminated, we would turn other attention to the next card with the highest interest rate and “double up” on that payment so the total amount sent to all credit card companies remained the same. I think we opened and closed maybe 6-8 new credit cards like this before we paid off all the debt. I do not feel we had to cut back on our lifestyle too much,

Once out of credit card debt we started saving money and paying cash. Having a “rainy day fund” is key to handling all of those unexpected bills that come up that get people into credit card debt – like $500 deductible on fender benders, new tires, major repairs, etc.

Eventually we found credit card companies that pay you back. I like them and use them for everything, but my wife doesn’t because the monthly bill is so big and all the cash runs out once a month. She says she doesn’t know how to budget her spending, but then she does like it when we can deduct $80 to $100 off the bill. Our cards are all paid off completely every month. I have not tracked the companies computations, but I highly suspect they are not accurate in computing the “cash back” amounts people are entitled too.

Debt-Reduction is a Joint Effort. It Takes Teamwork.

John Geltemeyer

We didn’t go into debt buying big ticket items, for the most part. Overwhelmingly it was a failure to track and plan.

We started as dual income no kids (DINK). We moved from a low cost of living area to high cost of living area. My wife retired from the military. We had 2 children. I retired from the military. I started a business.

At each one of these steps, we didn’t change our spending habits or review; we kept spending like DINKs.

One person was completely in charge of the accounts and bill paying, meaning one of us knew we were in trouble, and the other didn’t.

So, there we were: gross annual income of approximately $35,000. House payment of nearly $1000 a month. New car payment of $450 a month and almost $20,000 on credit card debt.

Our only good asset was that we had an outstanding credit rating, only slightly bogged down by our debt load.

The family needs to work together. You must become a thick-skinned and silent. Take responsibility. You were 50% to blame, no matter what. When your spouse says something that sounds like blame, shrug it off. Don’t accuse the other side of anything. You got into this as a team, you are only going to get out as a team.

You have to cut discretionary spending first. If you look first to cut your bills by getting cheaper plans or consolidating to get a lower monthly payment first, you’ll likely be right back where you started in less than a year.

Make a no kidding budget with a goal of understanding where every penny you spend goes. You may not be able to account for everything but you should try your best.

If you don’t, you and your spouse will begin attacking each other’s spending. In some cases you’ll be right, others wrong. However you’ll be fighting over it. You want to avoid that.

The top of the list should be all your discretionary spending. The next should be minimum monthly servicing of your credit card debts. Finally, non-discretionary things you may be able to negotiate lower.

When you do it right, the places where you are overspending will stick out like a sore thumb. In fact it might make you wince slightly.

Take your budget and show your spouse. Make no comments. When the spouse is finished ask “Where do you think we can make some cuts?”

If they try to avoid the discretionary area, gently steer them back.

No blaming. No getting thin skinned. If the spouse tries to apologize or blame, accept neither gracefully. You did this as a team, you’ll get out of it as a team.

A few areas to take into consideration that some people tend to gloss over.

Almost without exception the cost of any restaurant meal will serve 4-8 people at home. The more “ready-to-eat” a supermarket meal is, the more it costs. If you buy organics, research them, there are many foods that matter little as to whether they are organic or not. Pack a lunch to work. Convenience stores should be off limits.

You need to inventory your food. Plan weekly or longer meal plans. Make shopping lists that support the meal plan and inventory. Never buy off the shopping list. Work leftovers into your plan as they occur.

If both spouses work, both need to support the shopping and cooking of the meal plan.

Cable or satellite TV is a luxury, not an item to get a cheaper monthly plan for.

Once you have your discretionary items in line, then tackle insurance and other mandatory things to see if you can get cheaper plans. Cut out all frills out of your phone plans. Raise insurance deductibles.

See if your credit card companies offer cheaper rates. See if any of your loans can be refinanced. If it doesn’t lower your monthly payment, don’t do it. Avoid getting talked into rolling fees into new principles unless you absolutely need them to make a lower monthly payment.

When you are done with this exercise you should be able to come up with a plan that shows more money coming in than going out. You should then be able to show milestones where cards get paid off.

Christmas and birthdays will need to be scaled down affairs. Shop thrift stores and Craig’s list. Mom and Dad, you are now grownups. You don’t need toys at Christmas and birthdays. On these occasions give each other one simple gift that the other needs.

Once the plan is in place. Make sure you are both in 100% agreement. Sit down and calmly explain what is happening with your fiances to your children. Humans make mistakes. You’re human. Explain that you and mom made a mistake. Calmly and confidently explain what the family will have to do and for how long. This is important. If they don’t realize that you made a mistake overspending, they will eventually follow in your footsteps. They might just learn from you. If they know what is happening, they won’t panic when they see changes occurring. If they see you have a plan and are confident about it they will support your plan. If they ask of consequences of not paying, be honest. When you get stressed, and you will, you can explain it’s part of dealing with your current troubles.

If you have credit cards with non-interest fees, pay them off and cancel them. Make minimum payments on all but one card. Pick one card at a time to pay every extra penny you have into. Pay off the highest interests rates first. Knock out the debt one card at a time.

Formally meet with your spouse weekly to make sure you are both on your spending plans. Fess up immediately on anything that might be a surprise at the end of the month. Don’t blame, get back on track.

Make a monthly report that shows spending. Show increases or decreases in spending. Show credit card balances. Delineate the principles of your cards so that you and your family can see progress. Have small celebrations when a card gets paid off.

Using this plan we were able to pay off our credit cards and pay off our car loan early, in 16 months.

Ignoring Good Advice Until the Results Start to Hurt

J. Glatham

Once upon a time, when I was about 20 years old, my father said to me, “Stay away from credit. Buy everything with cash.” I thought it strange advice, as I knew he relied on credit cards and American Express in his day-to-day personal and business life.

Well, shortly thereafter I found myself in the US Air Force and one of the first things I did was buy a car, on credit. As a young airman, my monthly income was $110.00 and my monthly car payment was $99.00. Of course, I did not need much to live on, as I was fed and clothed and housed on the government’s dime. Also, my girlfriend was working and that helped. But I felt the crunch, especially when the car failed and I had to put money into keeping it running. Secondary lesson: cars are liabilities.

So, I started a process to get myself out of debt. I fixed the car, sold it and bought another, fixed it myself and sold it for twice what I bought it for and paid off the debt and bought another for cash. Since then, I have always paid cash for cars. One of the best cars I ever owned cost $35.00 and $25.00 to make it run. I drove it for years. Nobody needs a new car and nobody needs the associated debt.

About ten years after the car experience, I found myself married, with children, and, pretty much on a whim, established credit with a department store which led to eligibility for Master, Visa and American Express cards. I went through a bout with alcohol and some seriously bad decisions regarding the use of these cards. I had the American Express card confiscated for non-payment of the account and the Master Card was cut off for non-payment as well at about $2500.00. My father’s advice was sinking in.

Ten years later, I received a letter from a financial institution that had purchased my debt and was willing to settle it for $500.00. I guess they figured anything was better than nothing. I checked to make sure they were legitimate and paid the debt. That was the last time I incurred debt, and I cannot express the relief I feel at having absolutely no credit record or history. The problems resulting from this status have been minimal (trouble renting a car once).

I think my father recognized that I would have trouble using credit in a responsible way. He was right. Maybe he saw the trouble that others had dealing with it or simply saw it for the trap that it is. Right there too. Having taken some licks, all I can say is that it is not hard to live what may seem to some to be a relatively austere life if it includes the psychological freedom of not owing my soul to the company store.

Keep It Simple, Stupid!

Laurel Peart

My story is relatively simple, but we were able to get out of debt and have helped several of our children also.

The plan:

Pay a full 10% tithing to our church.List all debts from small to great.

Cut expenses to the bone (no cell phone, cable, eating out, new clothes – thrift shops do fine – etc.)

Eat simple, inexpensive, home-prepared foods and have a home garden, however small

Pay the minimum payment toward all debts (or make arrangements with the creditor for a minimum payment)

Take every penny left and pay on the smallest debt owed regardless of interest rates

When that debt is paid, take all the payment monies including the payment that had been made to the 1st debt and apply all to the next larger in line.

Continue until all is paid.

The time taken depends upon how much is owed, if extra income can be earned doing odd jobs, etc.

The reward is the excitement of crossing off another creditor and finally not being owned by debt.

Four Months to Debt Freedom

Barak Strickland

It was June 1987 and I was living in Wichita, Kansas. I was fortunate to meet a man by the name of Peter Degraff. From Peter I learned practical biblical financial principles. At the time I was 24 years old, single, and paying on a new $8,000 auto loan and starting to accumulate credit card debt.

In September 1987 I set a goal to be debt free by January 1988. Thanks to the teaching of Peter and the grace of God, I achieved that goal by focusing on debt repayment as a priority. I even sold all my gold coins to get out of debt!

In August 1988 I married my wife, and we moved to the Dayton, Ohio area. We remained debt-free except for a home mortgage acquired in 1990. By July 1999 we had completely paid off our home mortgage by paying additional principle with each payment. The feeling of being totally out of debt before the turn of the millennium is one that will stay with me for life.

The Wrong Way to Get Out of Debt


There is no easy way out of debt.

People that tell you that setting a budget and cutting back here and there will do the trick are as big a liars as the hucksters selling the blue sky that a 10 minute workout a day will lose you 70 pounds in a few months.

My wife is what I would call financially insane.

She is an intelligent woman and isn’t terribly materialistic. She doesn’t want new cars and vacations in Europe. But she has a problem understanding basic math.

She absolutely can NOT understand that if she didn’t spend $4 dollars a day on an expensive coffee that we would have about $1400 more a year in our checking account. Add to that all the times she eats out and does other things requiring money that are not necessary and she blows easily $4000 a year on just dumb stuff.

She keeps saying “You have to live a little.”

I keep saying “I’d like to not retire into poverty.”

She has several times racked up the credit cards behind my back. And each time I have painfully paid them off. Only to find she has done it again. The last time I finally came up with a solution to stop her. I informed her that if she ever does it again we will get divorced. And she knows I mean it. She has behaved for four years now.

We have not owned a credit card for four years and I open her mail to make sure she hasn’t gotten any new ones. Yes, it’s spying. Yes, I don’t trust her and yes, I don’t care if she doesn’t like it. I’m trying to save our marriage and I’ll do what ever it takes.

All of the finance books, and we have read lots, talk about the couple sitting down and working up a budget they can agree on. We have done that several times, but they assume two financially sane people.

The other trick I have learned that has kept my financial ship afloat is lying to my wife. Again all of the financial books talk about total honesty, I say that’s total bullshit.

If I had told my wife years ago that I had started contributing to my 401k at work she would have had a fit. She would have wanted that money to spend. She knows about it now and is thrilled that we have something going towards our retirement. It was up to about $150,000 before the latest crash, but it would have been almost nonexistent if I had consulted her and asked for her permission to start saving.

The moral of the story is sometimes you have to use threats and deceit to accomplish your financial goals. Maybe another way to word that is you can’t let the inability of your spouse to manage money be an excuse for not doing what has to be done to save your family from financial ruin.

Get a Second Job

Roger Fossum

I don’t know if this counts or not but last year I worked 80 hours a week for almost the entire year. During that time, I settled over 10,000 dollars of personal/family debt that I was making little to no headway on prior to taking on the second job.

I also started paying my tithe prior to taking the second job.

Yes, the year went by in a blink. It felt like the year began, I yawned and the year ended. But I was out of a mountain of unnecessary debt. It was worth it.

I was doing computer data entry for a bank. I had a job where I called insurance brokers and company representatives all around the country and facilitated the setting up of health savings account programs for their employees.

At night, I started doing security work for a casino. The security job didn’t pay as much at first but before long, they gave me a raise that outpaid what I was making on my other job. I worked 11 to 7 a.m. on security and worked 8 a.m. until 4 p.m. at the bank job. Yes, my sleep was short on many days but you can do whatever you put your mind to.