Updated on 09.16.14

Readers Reveal Painful Truths About Credit Card Debt

Trent Hamm

Recently, several readers of The Simple Dollar have emailed me and asked questions about managing and reorganizing their debt. These individuals are trying to find their way through the debt nightmare of the modern world, one that so many of us find ourselves in at some point in our lives. I hear questions about whether or not they should use a home equity line of credit to pay off their credit cards, or what they should do about a huge pile of credit card debt if they don’t have any assets.

I know very well where these readers are coming from. They’re struggling with the vice-like grip that large amounts of debt can place on a person’s life. Every time it feels like they’re gaining ground, something happens and they fall behind again, always behind their credit cards, never ahead of the game.

Although I offer advice to each person that asks, I really want to tell them all that there is one fundamental way to get out of their problem. It’s the same method, regardless of the specifics, and it’s so simple that most people simply don’t believe in it.

All you have to do to get out of credit card debt is spend less than you make. That’s it. That’s the secret of all personal finance. That’s all you have to do. Once you spend less than you make, you can take that difference and apply it to your debts or save it so that when an emergency happens, you don’t have to use credit to save yourself. Then you can begin to invest with security.

It took me far too long to really figure this out. I heard it, I even believed it, but I didn’t follow it until I hit rock bottom. I almost lost everything I had because I really believed I needed to spend all the time. I believed that I needed stuff.

I’ve talked to so many people who have figured out this secret and really integrated it into their lives. The stories are very similar; they spent and spent like a good consumerist, buying more and more stuff, then they hit their own personal wall. After that, they found some book or heard some radio program and suddenly it all made sense to them, and after that, things began to turn around for them.

The people that write to me, for the most part, haven’t reached that bottom yet. They’re still struggling to save rather than just doing it, and they’re more worried about restructuring debt than eliminating it. Sometimes, when I read these emails, I am almost brought to tears because of how familiar their messages are. I know what it’s like to fight against the chains of debt, following an innate belief that everything will make itself better somehow.

The answer to debt problems is simple, but actually doing it is very difficult. The real solution comes from within, and I remember very clearly how painful bringing that solution forth was.

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  1. Matt says:

    I’ve always found debt to be a struggle even though I know that it’s a very simple concept of spending less than you make. Spending is so ingrained in our society that getting that under control will bring the debt issue along with it.

  2. Sun says:

    “brought to tears”? For what? I don’t want to offend anybody but I have no sympathy for those who got themselves into debt by spending every penny they made. Student loan is one story, credit card debt is another. If they can’t get their spending under control, they got nobody but themselves to blame for the struggle.

  3. Jeff says:

    @ Sun,

    For the most part, you’re right. As someone who, I think, was an catalyst for this article, I’ll tell you that my current situation is my fault. Mostly.

    I knowingly ran up a larger credit debt than I was comfortable with last year, but I had a plan to pay it off this year. There would have been a little left over to take care of at the end of the year, but it would have been mostly gone.

    Then, because of a change in my insurance and unexpected medical needs, I ran into a series of medical bills that used up every cent I had earmarked for credit card payments, plus some. That has left me where I am now, which, to put it in perspective, is bad, but not “about to be in the street” bad. What I have realized is that if I don’t do something drastic now, it will GET bad.

    So I put myself where I am, but it was magnified by events out of my control. My emergency fund, never at the levels I wanted it at, is keeping things under control at this point, but its time is running out.

    @ Trent,
    Thanks for the advice, and again, for the site. Just so you know, in my case the restructuring is only one part of the overall plan.

  4. Trent Hamm Trent says:

    I’m brought to tears by the fact that there are so many stories like this and they’re so similar. There’s something really wrong when people enter adulthood and aren’t equipped with basic financial education, but very few people are.

  5. Terry says:

    What if you earn minimum wage? Do you think YOU could spend less than that?

  6. Jag Nogg says:

    The best advice I could give anyone struggling with debt would be go to Dave Ramesy’s web site (www.daveramsey.com) and click on the “find a station” link. Either that, or search for his podcast on iTunes. If you listen to him every day, there is a good chance he will help you change your life. My wife and I have paid off over $50k in debt in the past year and a half following his advice.

  7. Cameron says:

    Terry – Even if you do earn minimum wage, you have to spend less than that. What choice do you have? You can spend more than you make for a few months by using credit cards, until they’re all maxed out. And you can’t make the payments because you are spending all your money. This can’t continue forever. You’ll eventually file for bankruptcy, and then you won’t get credit again for years. Then you literally have no choice but to spend less than you make.

  8. Rob in Madrid says:

    Hi Trent excellent post. Yes I agree it’s very easy to fall into the debt trap and very difficult to climb out.

    @ sun very few people are able to resist the sirein call of easy debt, we are programed from a very young age to spend spend spend. Stores creditors make it very easy to fall into the debt trap. All of a sudden you realize that you are on a tread mill working hard only to find your self falling behind. You manage to get a bit a head and then you get waylaid by a huge bill. Look around you what’s the ratio of frugal to spendthrift 99 to 1 high I think perhaps a 1000 to 1.

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