Why pay it back...they screw you anyway
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Why pay it back...they screw you anyway
| Thu, 04-14-2005 - 1:10am |
So, I've been whacking away at some of my card debt....hoping to have a credit reserve if I need it for doing legal battle with the Idiot Ex. And what happens?
The bloody banks cut my limits. So now I have no reserve.
Hell, I should let them all eat it. Offer them a couple of cents on the dollar.

Hi T,
It's so frustrating in the beginning, isn't it? I really feel for you. Yeah, the credit card companies can be real SOBs.
But I want to encourage you to keep cracking at it. They will continue to be SOBs to you for a while. The first part of the debt-free journey is slow and painful. But as you build momentum, it gets easier--and goes faster. And a funny thing happens--about a year or two (give or take depending on how quickly you're able to chip away at it), they start to get really nice. Then they start sending you offers for pretty good credit deals. Then they start to panic and send you offers for free cards with 0% interest on balance tranfers and cash back bonuses on purchases, no annual fee...
And suddenly you realize YOU are in the driver seat now. And if you like, you can call them up and tell them to screw themselves this time because you're done with them.
As for having a reserve for dealing with the ex, I recommend in addition to chipping away at the debt, you build a cash reserve. Cash is SOOOO much better than available credit, because it is YOURS and you can do with it as you please, no worrying about dealing with creditors who just want to eek every last bit of interest and fees out of you. You get to be in the driver seat.
So, make the minimums on your credit cards (for now--as your debt goes down, continue making the same payments, even though the minimums go down, and eventually you'll be chipping away at it quicker and quicker), and take every extra little bit you can and sock it away in a savings account. It seems counter-intuitive, because you will make less money in interest than you would have saved in interest payments by sending it to the credit card companies, but it is wise to put a bit aside for your cushion. Dave Ramsey says to start with $1000, and then start putting all your extra toward debt. In your case, you might want to build a little more than that since you expect to use it in litigation. You'll have to decide the target amount for yourself.
Good luck, and chin up.
Blessings,
Heather