Comments on: 10 Step Plan for Debt Elimination

By: Cashby

Cashby — Mon, 03 Nov 2008 19:24:49 +0000

I’m a little late to the ball game. Playing with credit is why this country is in its current financial situation.
In regards to his debt, cash the stock out and payoff debts 2 & 3 immediately. Then pay the minimum on the line of credit and attack card 1. Chipping away at debt is a lot like losing weight…without the quick gains and successes most fall off the track.
Cut the cards up…cash is king!

By: Steve

Steve — Fri, 31 Oct 2008 22:31:11 +0000

I know I’m coming late to the dance, but I think most of you are overthinking the problem. He has (had, I hope)enough in stock and free cash flow to be free of all his revolving debt in a little over three months. I bet if he took a careful look at his spending, too, he could do it quicker. And shuffling around from one card to the other is, for most people, just asking for more credit card trouble. Over such a short period of time, interest rate has such little impact. Pay if off already!

By: Madison

Madison — Tue, 02 Sep 2008 15:08:01 +0000

Thanks everyone for your thoughts. Hopefully I can get him to give us an update on how he is doing in a couple months!

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By: deepali

deepali — Fri, 11 Jul 2008 16:56:54 +0000

Sounds good, though I wouldn’t bother with the o% cards since he’s got such a short timeline. Also, the dings from the new cards won’t help the mortgage he might be trying to get in the fall….

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By: Frugalchick

Frugalchick — Thu, 10 Jul 2008 16:40:17 +0000

Good plan. Personally, I would follow your advice #1, pay the minimum each month then apply for 0% balance transfers, ideally avoiding multiple transaction fees. After that, he should be uber aggressive in paying it all off.

By: kitty

kitty — Thu, 10 Jul 2008 16:36:51 +0000

One correction. Depending on his tax bracket and whether he has short term or long term gains, the stock may have to grow at over 20% rate to grow faster than his debt. Stock gains are taxable, his interest is not.

If he has a loss instead of a gain, he gets to take it off his taxes. Then he can use his tax refund to pay off more debt.

By: kitty

kitty — Thu, 10 Jul 2008 16:33:46 +0000

I would certainly sell company stock to pay off 15% and 18% cards immediately unless there is some restriction on stock sale. It is extremely unlikely that the stock will grow at 15 or 18% a year. What he is doing by keeping stock and paying the credit cards is gambling that stock will grow at a higher rate. The probability of it is very low in the current market.

By: Ron@TheWisdomJournal

Ron@TheWisdomJournal — Thu, 10 Jul 2008 14:55:25 +0000

Good ideas. I’d pay off #3 to get rid of the interest and free up some monthly cash to make payments on the others. Next would be that “personal line.”

Unless he plans to actually need his credit score to be good for some additional debt, I wouldn’t worry about the score until later.

By: Marc and Angel Hack Life

Marc and Angel Hack Life — Thu, 10 Jul 2008 13:57:10 +0000

How about paying down credit card #2 and transfering credit card #3’s balance over to it? Bring down those rates…