SOAR-2

One CHUNK MORE at a TIME....

Credit debt is like a dead albatross hanging from your neck. The
weight of this burden on your shoulders adds stress to your life and
keeps you living in the past. "The past?" you ask. Yes, every month
you are reminded of the things you bought, ate, and did months (or
even years) ago. And you are still paying for it: the dead albatross.

You are not alone if you have credit card debt. Remember, millions
(billions?) of dollars are spent each year by advertisers, marketers,
and retailers. They work hard to convince us that BUYing stuff will
make us happy. Stuff makes our homes look better. Stuff makes our
cars go faster. Stuff makes us look better. Stuff makes our teeth
brighter. Stuff makes our kids smarter. And the latest trend is to
buy more stuff to organize the old stuff. Credit cards allow us to
BUY this stuff fast and faster. What they don't tell us is that their
credit cards don't let us OWN this stuff fast.

You are not alone if you feel guilty about your credit card debt. You
are not alone if you feel frustrated by your credit card debt. You
are not alone if your credit card debt feels like the dead albatross.

Let yourself feel guilty and/or frustrated for about two more minutes
{{smile}}. Then you are going to roll up your sleeves and start your
plan. You can do this!

It is time to tackle this debt. No more guilt. You can do this. It is
going to take some time, but you can do this.

Two Powerful Tools:
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Already, you have two very powerful tools in your pocket that are
going to help you with the credit card debt.

The first tool is those "three magic words" that are going to keep
you from picking up MORE new debt (or new credit cards) than you want.

"No Thank-You"

Use these words whenever you get an unwelcome offer for a new card
(or a tempting buy-now-pay-much-more-later deal) in the mail, over
the phone, or while shopping. If your goal is to tackle debt or to
blow the dust off your savings account, then "no, thank-you" is going
to be one of your best tools (and it doesn't cost a dime LOL).

The second tool is the "Three Rules of not BUYing"
1) DO instead of BUY
2) SHOP at home FIRST
3) PROCRASTINATE

These three rules of not BUYing are going to help you discover all
the things you already own and the things you can do that don't cost
a dime. They are going to help you LIVE life!

The Third Tool: Your Target Plan �?One CHUNK MORE at a Time
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Today, let's talk about the third tool. We don't have a magic magnet
that is going to instantly reduce your credit card debt to zero. We
have the TARGET PLAN: ONE CHUNK MORE AT A TIME!

I know that many of you have a goal to bring this credit debt down.
Wahoo! It may take awhile, but like the elephant, you tackle it one
chunk at a time. You can do it.

Start now.

1) First off, how many credit cards do you have? Haul them out
of your wallet and lay them out in a row on the kitchen table (a new
game of solitaire �?hee hee). Get your spouse involved.

2) Put a blank piece of paper (or sticky pad note) under each
credit card.

3) Now for the fun part. Look at your bill(s) and write out a
bit of information about each card. If you can't find the bill, make
a phone call. Don't feel embarrassed or guilty about this call �?the
dude at the other end probably has his own debt that he is dealing
with LOL.

Credit Card: XZY
Total Credit Limit: $8,000
Interest Rate: 19.9%
Amount Owing: $5,244.97
Minimum Payment: $110.14

4) Once you have figured out all the outstanding balances, then
re-align the cards and notes so that they go from the MOST owing to
the LEAST owing.

5) Which card do you want to tackle first? This is going to be
your "TARGET card" (no relation to the store LOL). Me, I would pick
the card with the lowest amount owing. It could be paid off the
fastest and then I could have my first celebration (you get to
celebrate with each card - hee hee). I like to have as few cards in
my wallet as possible. Some people will pick the card with the
highest interest rate. The sooner you can pay this off, the less
interest you will end up paying. You get to choose.

6) Now, figure out how you can pay a CHUNK MORE than the minimum
payment on the "target card" (you still have the other minimum
payments on the other cards to pay as well). This CHUNK MORE may be
$10.00, $20.00 or $100.00. It is the first step to bringing back the
credit card into YOUR control. Every month for every payment, you
will add a CHUNK MORE to the minimum payment on your "target" card.

7) As time progresses, you will eventually pay off this card.
First you get to celebrate (remember DO instead of BUY). Then it is
time to select the next "target card." This time, the rules are a
little different. You still pay the minimum payment and a CHUNK MORE,
but you ALSO add the minimum payment from the first card that you
have already paid off. (There is nothing new about this technique.
Many people have had great success with this.)

Does this make sense? For example, let's say the minimum payment on
the first card was $35.00. You added a CHUNK MORE of $10.00 each
month and now the card is paid off. Now, you are tackling the second
card. This one has a minimum payment of $50.00 per month. You add a
CHUNK MORE of $10.00 per month AND the minimum payment from the first
card ($35.00).

8) When the second card is paid off, you select your
third "target card." This time you pay the minimum payment, plus the
minimum payment from the first card, plus the minimum payment for the
second card, plus a CHUNK MORE. You are making progress now! YOU are
in control of those credit cards! Keep going until you are done!

A few comments about the "target card:"
----------------------------------------

1) Once you select a "target card," leave it at home (in fact,
you may want to leave several of the future "target cards" at home).
Don't carry it in your purse or wallet. The last thing you want to do
is add more debt to this card. Remember the three rules of NOT
buying:

DO instead of BUY
SHOP at home FIRST
PROCRASTINATE

These three rules will help you find other solutions so you do not
need to BUY.

2) Once the card is paid off, you can cancel it. Make sure you
cancel a card properly. Call up the card company and find out if you
have to write a letter or something else to cancel the card. I like
to have as few credit cards in my name as possible!

3) I have told members to cancel unwanted cards in the past.
However, one of our readers told me that canceling credit cards might
damage your credit rating (in the short term). YIKES �?she was right
(thank-you for telling me this). I did some research. If you are
planning on buying a house or getting a loan for a vehicle, etc. then
you may just want to keep that credit card a little while longer
(paid in full of course) especially if this is a card that you have a
good history on (no missed payments).

If, on the other hand, you have no plans on purchasing a new house or
taking out a large loan, and this is a card that you don't want
anymore, then by all means, cancel it. No more "panty store," "shoe
store," or "pet store" cards in my wallet! We are down to two major
cards that we keep, use, and maintain. That's enough credit cards for
our credit rating.

A few comments about a CHUNK MORE:
-----------------------------------

1) How much is a CHUNK MORE? That's up to you and your finances.
Some months it may be $10.00. Some months it may be more. ALWAYS add
a chunk more to the "target card."

2) How about windfalls? This time of year, many of us are
receiving rebates, refunds, bonuses, and other checks in the mail.
Advertisers are trying to get you to spend this on new clothing,
furniture, appliances, and home renovation. If your goal is to pay
off your debt, then by all means, use the windfall as the CHUNK MORE.
The real prize is waiting for you when your credit card debt is gone
and the albatross is gone. Then you will realize what a windfall it
really was!

3) Where are you going to find this CHUNK MORE? Remember the
three rules of not BUYing:

1 - DO instead of BUY: discover all the great things you and your
family can DO that don't cost a dime!

2 - SHOP at home FIRST: look in your home to see if you already have
the thing you are about to BUY

3 - PROCRASTINATE: put off purchasing new things. Who knows? Perhaps
you can find what you are looking for at a better price, or maybe you
will discover that you never really needed to buy it in the first
place.

Also, remember the treasure trove of savings that can be found during
your weekly grocery shopping. Eat at home. SHOP at home FIRST. Plan
your meals. Shop with list. Cook and eat the things you buy. There
are hundred's of dollars of savings to be found here!

4) How about taking out a low-interest loan, line of credit, or
second mortgage to pay off your credit card debt? I have to admit I
get yucky shivers up and down my spine when someone says they are
doing this to pay off their credit card debt.

First off, do the math. Have you simply substituted a high interest,
short-term loan (the credit card debt) for a low interest, long-term
loan (from the bank, etc.)? How much TOTAL interest are you going to
pay? While it may seem like a good idea to drop the interest rate, it
is not a good idea if you get locked into a long term loan that
cannot be paid off ahead of schedule. Are there penalties if you pay
the loan off faster? Dig out your calculator! Five minutes of number
crunching may save you thousands of dollars. Remember, the goal is to
ELIMINATE this debt, not just move it.

Second, if you know that you will NOT add more credit card debt while
you are paying off the loan, then yes, this might work. However many
people get caught. They get the loan, start shopping again, and fill
up the credit cards again. YIKES! At least when the credit cards were
maxed-out, the shopping stopped.

If you are considering such a loan, PLEASE talk it over with your
spouse, with your bank, and with a financial expert. Then have a hot
bubble bath and hold a heart-to-heart conversation with yourself.
Will you be able to stop buying while you pay off the loan? Will you
cancel the cards once they are paid off? Can you find other things to
DO that will not cost a dime? Know yourself.

5) How about transferring your credit card debt to one of
those "new" cards with a really low percent interest rate for the
first six months? READ THE FINE PRINT! Does the low interest apply to
the transferred money (or just the new purchases)? How long is six
months (is it really five)? How much do you have to pay after the
sixth month? What is the real interest rate? What are the penalties?
When do the rules kick in? You may have to call the credit card
companies to find out where they hide the FINE PRINT LOL! Some of it
may be on documents that you don't even have. Me, I would avoid these
offers! You know whose best "interests" these people really have in
mind (it's not yours or mine).

6) Take care of the debt on the cards you already have. One
CHUNK MORE at a time. You can do it.

A Couple Last Comments:
------------------------

Here are a few extra things you can do (and they don't cost a dime):

1) Call up the credit card companies for the cards that you have
outstanding balances on. Ask them if there is any way that they will
drop the interest rate for you. You may even want to drop a hint that
you are considering some of the other low-interest rate cards. The
worst thing they can say is NO. The question was worth asking.

2) Look at the websites for your credit cards. As astonishing as
this sounds, many of the major credit card websites have wonderful
tools and tips for eliminating your credit card debt. Taking a look
at their suggestions doesn't cost a dime.

3) Have fun with this. No, I am not crazy LOL. This is a
challenge. You have a goal. You can do this. You are not alone.

I read a quote that said, "If you are not happy while you are getting
rich, you will not be happy when you are rich." (I wish I could
remember who said it.)

All of us have or have had debt. It is part of the learning journey
that we are on. Getting rid of the debt is also part of the journey.
Take it one CHUNK MORE at a time. You can do it!

Take care of you and your finances,
Cindy

PS: We've added this essay, plus the updated printouts for your own
credit card tracker to Cindy's Porch:

GIF File (smaller file):
http://www.cindysporch.net/images/creditcardtracker.gif

PDF File (larger file):
http://www.cindysporch.net/images/creditcardtracker.pdf
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