How Credit Card Debt effected...

...my transition to a new career.

Well by now if you have read the previous posts you are aware that I got a decent job at a University in North Carolina. Now it is time to move from Maine to North Carolina. We are about to make a trip with no idea of where we will live, but we have faith things will go smooth.

One advantage I had was that I was actually taking 3 months of leave from the Navy from July 1 to September 30th. This means that from 13 July to September 30th I will be pulling in full pay from two jobs. While this will help us in August the transition/startup costs of moving to a new area will be a challenge.

Our first stop was in Connecticut to visit relatives. Here we decided that it would be best to take out a $2,000 loan to help us in our transition. We got online with our credit union and applied for a loan. Fortunately we belong to the largest credit union in the world, the Navy Federal Credit Union. Since this credit union serves sailors around the globe they were out front in online services. The only real question was Would our entering into a credit card debt program effect our ability to get the loan? Would the fact that I was retiring from the Navy or the fact that I had yet to actually get start the new job effect our ability to get the loan?

Our next stop was New Jersey to visit family. While there we called the credit union and they answered our questions by approving the loan, we arranged to pick up the check at a local branch of the credit union serving a near-by Navy Base.

With our $2,000 buffer in place we headed to Greensboro. We checked into a local motel. Our plan is to rent for at least a year, learn the terrain, then possibly move to a new location. We hope to be able to purchase a home within 5 years.

So far being on a debt management plan didn't effect us. We got the loan from the credit union, but I had been a member for 17 years. Now we were about to rent a house in a new area with no history of a job or residence in this area. Would being on a debt management plan make this a difficult process? We were full of anxiety and worry but moved on, the week was ticking bye.

We found a small house (remember sacrifices are needed to get out of debt) to rent and had no trouble with the lease or any of the utilities. I was both relieved and surprised that we didn't run into any difficulties.

The next post I get turned down for my first loan.

Eliminate Credit Card Debt, The Beginning

Let me set the scene and see if this is familiar to anyone out there.

November 1997, I was set to retire from the US Navy in Sept of 1998.

I had about $26,000 of unsecured debt (credit card debt). Every time I was transferred from one base to the next over the years our debt would increase by about $2-3,000.

We were making all of our payments on time, but it was like treading water we never gained on our debts and the biggest expense we had were our three lovely kids, ages 1, 4, and 8.

Did any of the previous sound familiar?

At this point we decided that we had to see what help was available to try and work our way out from under debt load. The most common group specializing in this type of assistance at the time was the Consumer Credit Counseling Service, a non-profit group that had offices across the USA. This is still one of the best groups out there.

The Consumer Credit Counseling Service in 1997 required one-on-one counseling and a budget set up with a counselor. I was arrogant enough to think that I didn't need any face time with a counselor. I wanted a group that was easy to use but I didn't want them to get personal with me. I knew I was going to have to stop the use of my credit cards and start taking a bite out of the debt crunch.

I used the internet to research alternatives and came up with Debt Counselors of America now called Myvesta. This was a non-profit group that would negotiate a lower interest rate with the various credit card companies on our behalf (this group doesn't seem to do this any more but does have great info on the topic). The only catch was everything had to be paid through them.

My credit card interest rates went from 21%-0%, 18%-10%, 18%-6%, 18-4% and 16%-16%. My largest debt on a single card was the Discover card which went for 21%-0%.

The only credit card I didn't place under the program was the one from my credit union. I have a good history with them, a reasonable rate and I didn't know how using the program would effect my credit rating. I wanted one avenue that was free of any possible problems. The card was at its limit and wouldn't be going down too fast since the other cards are the priority. But this card was listed as off limits by my wife and I.

Well this was the beginning. Later I'll explain what difficulties we ran into and how this effected our life.