Having chosen the system of paying off debt rather than file bankruptcy (At one time a board member of a credit union), I'm angry that the 'system' penalizes people who choose this route. Divorce caused the problem. I faithfully paid till all balances were zero. I cut up and did without a credit card for years to achieve this. And I learned spending discipline. However, I could not rent a car or travel. And, once all was paid, I still had 'bad credit'. I was told by a mortgage lender that it was equivalent to having filed bankruptcy. It has taken me years to rebuild my credit. I don't regret the choice but regret not understand all the effects it would have over the long run.
SO, lessons learned:
Guard your credit with your life.
Don't sign up for every credit card that comes in the mail. Read the fine print on rates and charges.
Do you WANT it or do you REALLY NEED it? Chances are it's a want not a need.
Is it a marketing gimmic that will be in your garage sale next spring? Paying storage space for all those gimmics?
Find other ways than spending money to salve your brused ego/heart/depression.
NEVER CO-SIGN unless YOU intend to make the payments.
If married, have your own credit established seperate from your spouse.
10% to church? Why not 10% to savings (minimum)?
Budget. Pay cash for WANTS.
Gambling is ENTERTAINMENT. The probability of winning to pay off debt is zero.
Read Motley Fool, great advice!
And lastly, for those of you choosing bankruptcy, understand all of us are paying for your debt. Institutions may 'charge off' debt. That's a bottom line loss for the lending organization that raises costs and tightens the criteria with which money is lended for the rest of us. I'll thank you for being responsible for your own debt.