The $10,000 Credit Card Challenge
Thinking about conquering your mountain of debt but too scared even to give your debt much thought? Read this real-world scenario of how one person erased $10,000 of credit card debt within a few years.
Ever wonder how some people deep in credit card debt manage to come out on top financially? This is the hypothetical but realistic story of Emily, one person who dug herself out of $10,000 in credit card debt in just a few years.
Never a big spender, Emily was shocked when she noticed that her two credit cards had a combined balance of $10,000. What happened?
*Emily took a lower-paying job when the economy went bust at the turn of the millennium. *Hoping her lower income would be temporary, Emily didn't sell her house to get one with a lower mortgage. She didn't sell her expensive car to buy a cheaper one, since she would get much less than she had paid for it. In reality, the thought of driving a less-nice car was painful *Emily paid only the minimum monthly credit card payment most months. She was paying interest, and interest on interest, buying the privilege of having the credit card company hold onto her debt another month. *When one of Emily's credit card balances got within a few hundred dollars of the credit limit, her interest rate on the card skyrocketed from 17 to 27% .
Loans: Emily's Salvation? Emily considered taking out a loan to pay off her credit card debt. She owned a condominium whose property values had increased 40% since she bought it, so she could easily get a good low-interest second mortgage.
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