Reader-submitted: Credit Card Debt G’mach

reader submitted opinion op-edI am a frum Jew who owes thousands upon thousands of dollars in credit card debt. I know that my story is not unusual in Lakewood. In fact, my story is the story of millions of Americans.

I made a cheshbon that in the last 4 years I have probably paid $15,000 in minimum credit card payments. However, my debt has barely been reduced. I have tried every tactic to try and get out of credit card debt. I have cut back wherever I could. I have tried to pay more than minimum balance. In the end, all of my attempts have been unsuccessful. Since, I know I am not the only frum Jew in this situation I would like to suggest the following.

Lakewood should set up a gmach exclusively to lend to frum Jews being strangled by credit card debt. The gmach should max out its loans at $20,000. Obviously, anyone borrowing over $10,000 would need a guarantor. I think this would be a huge chesed and make a difference in the lives of many people. I hope someone who has the financial means takes my offer serious.

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64 COMMENTS

  1. I have successfully been able to multiple times to call the credit card companies and explain my dire situation to them and ask them to lower my APR on all existing purchases. I got them easily to lower it to 6.99% by telling them otherwise i am going to do a balance transfer, which means they’ll be losing all the interest. Feel free to try to do the same.

  2. Are you still using credit cards? Stop using them. Buy only what you can afford. Stop making payments eventually the cc companies will accept a settlement to pay less than you owe. This will adversely effect your credit rating but it’s the price you pay.

  3. Just an idea – We have successfully paid off our credit card debt by CLOSING our credit card accounts and working out a monthly payment plan with the credit card companies. We try very hard to live off a debit card debit now and not get sucked into the credit card debt again. I think it’s 7 years and we finally paid off 1 bill fully.

  4. A couple of things: firstly most ppl who have so much credit card debt, their issue is not the debt their issue is the spending again I’m not saying all I’m saying most, so giving them 20k will only add to their prob not help , and second why wouldn’t you need a guarantor for under 10k how can you trust ppl that they will give it back isn’t 10 k money!!??

  5. If you borrow money and clear up some of your credit cards, what is there to stop you from spending that again or applying for new credit cards and putting yourself into greater debt?

  6. Anonymous- post#9 – that’s a harsh thing to say, you have no clue what got this person into debt in the first place. It doesn’t necessarily mean they spent frivolously. Also, if you wouldn’t say it to a person’s face then you shouldn’t post it online.

  7. I think we should start a tzedaka fund (Chasdei Amex) for this and have a parlor meeting to raise money to bail out people who racked up credit card debt!

  8. Besides the way people lead their extravagant lifes here in town……
    As someone who has lent some friends $$$ to get out of CC debt a while ago and was told yea I’ll repay you within a few months, year etc…….
    Its been already a FEW YEARS and I have not seen my money back so……………….

  9. To all those jumping on this person that wrote this letter about his situation, which sadly is not unique – I cation you to think twice before posting your negative comments that could amount to Issurim – no one knows his situation and his circumstances to render judgement. Those jumping on him are implying that his credit card debt is a result from going on some sort of spending spree or just living it up, where chances are like most of us those credit card bills are from food bills and tuition payments. What are you supposed to do if the school says your kids cannot come back next year unless you pay up – you have no choice but to use your credit card and these situations play out all the time. So my advice to all of you is to be a little “noisei b’ol im chaveiroi” and rather then condemning him maybe you could find a way to help. Also remember what goes around comes around….

  10. iI you close all your cc’s and can come up with a way to make it impossible to open a cc with out a third party’s permission (sort of like an internet filter) for a span of 2 or so years, then i think its a fine idea.

  11. Most CC will offer you a 5 year payoff plan,
    They will reduce the % to 0 or close to it and divide your balance by 60 payments , but you will have to close the account

    The CC is your gemach

  12. I’m maxed out to and trying to get out from under it is hard. I work full time and still struggling with it… I don’t have a spending problen. I have an earnings problem.

  13. Stop driving all over Brooklyn, Monsey for simchas this will save u lots in gas and tolls and wear and tear on your car, the average trip to Brooklyn with Tolls, and gas has to be $50.00 Thanks have a Great year and save

  14. Every loan should require a guarantor. In the case of bigger loans above 500.00, each 500.00 should require a different guarantor as this will limit the losses of the people who guarantee the loans, and pressure the borrower to curb spending and pay back the loan’ as many people will be down his back. A gmach is not a free bank account that gets you out of the hole for the time being so that you can pass along the debt to guarantors and then start living like Rockefeller on someone else’s account. This whole post that you are in debt and like many others in this town is because to many people just live way beyond their means. Stop trying to impress your neighbors or living like the joneses.

  15. What does it make a difference if u owe to cc or to gemach? And how do u plan on paying back the gemach when u can’t pay the cc?
    Why would a gemach be ready to take a high risk of loosing 10k per person when u are more likely to fail to pay based on ur cc history???

    Ur letter should have been to open a gemach that would CLOSE ur cc to prevent more spending and than work out a easy payment plan with ur cc for u to pay (not the gemach…)
    they may also get u a issur from the vaad to go collect to help pay it off, but ONLY after ur cc is closed!

  16. debtor says:

    January 1, 2014 at 12:06 pm

    I’m maxed out to and trying to get out from under it is hard. I work full time and still struggling with it… I don’t have a spending problen. I have an earnings problem.

    And you still expect people to lend you more money when you admit you can’t afford your lifestyle?

    (I feel bad for you; you definitely need help. The help you need is advice, not more money and debt.)


  17. Lakewooder says:

    January 1, 2014 at 12:20 pm

    Why only Jews?

    I agree. I assume the person meant that this gemach should be exclusive for those suffering under credit card debt.

    However, know this: Because gemachs cannot rely on the courts to reclaim money that is not repaid, most gemachs have draconian rules for taking a loan. One of them is that the loan must have cosignors that are personally known to the gemach administrator and who agree to repay the loan in the even of default. This draconian rule pretty much excludes most people from being able to borrow from a gemach.

    I do understand the gemachs though. In the past, they have lost lots of money from people who just wouldn’t pay back.

  18. Take control of your life and don’t get yourself in debt showing off living in big beautiful homes and driving expensive cars and going on lavish vacations.

  19. Someone asked my grandmother how they managed in her days without credit cards – what did they do if they needed to buy something and they had no more cash? My very smart grandmother answered: “in my days, if you ran out of cash, you didn’t buy it. You waited for the next month.”

    Try telling that to someone in our spoiled generation and he’ll think you’re from Mars.

  20. Number 7
    Your right they have a problem spending . Spending money for food ,dipers cloth. Hydro,and outher basic necessities .they have run out of options besides credit cards they should be ashamed of themself let the kids starve.most people in Lakewood who have this problem aren’t spending on luxuries . They need our help not Musser or criticism.and if you don’t want to help don’t look for excuses just ignore them and get on with you’re selfish life

  21. Who are you fooling? No spending problem? You wanna bail out plain and simple. There are frum scam free lakewood organizations that will sit down with you and help sort it out. Daven and look into these groups and cut up your credit cards now.

  22. Call mesilla it is an org that helps you budget and live within your means . If you don’t care to ruin ur credit rating u can try and settle with them but u hv to hv a lump sum to give them. This is where the gemach can b helpful u borrow from them a lump sum then settle with cc . Some cc have even settled 20 or 25 cents on the dollar, and then instead of paying cc which only will go towards interest you pay the amount you were paying off ur cc to the gemach. Good luck

  23. There are plenty out there who work very hard and do not live a luxurious lifestyle at all. Most people (including myself) fall into debt when unexpected expenses come up like a major car or house repair. Most middle class families cannot afford to save for such circumstances and have to rely on cc with high interest rates which end up crushing us in the end. Recall that the gemara refers to ribbis as “neshichah” for a reason.

  24. Am I the only one who thinks this guy is trying a government style spending solution? When no more money start borrowing from the Chinese! but, absolutely DO NOT change your habits!

  25. The problem with you using credit cards is that you pay the minimum payment. If you want the convenience of a credit card, you treat it like a debit card – pay the full amount each month. Period. This is what I do. If I can’t afford to pay it off with a check at the end of the month, I have no business spending it.

  26. Every loan should require a guarantor. In the case of bigger loans above 500.00, each 500.00 should require a different guarantor as this will limit the losses of the people who guarantee the loans, and pressure the borrower to curb spending and pay back the loan’ as many people will be down his back. A gmach is not a free bank account that gets you out of the hole for the time being so that you can pass along the debt to guarantors and then start living like Rockefeller on someone else’s account. This whole post that you are in debt and like many others in this town is because too many people just live way beyond their means. Stop trying to impress your neighbors or living like the joneses.

  27. There is no need to put anyone down. Obviously he spent more money than he can afford but there are alot of people in the same boat, including our own government . It happens. No need to yell and scream at him. The bottom line is, he is in debt and is trying to get out of debt. Basically, with a high amount of debt, just making minimum payments or slightly more, will not get you out of debt in a reasonable amount of time. The author of this article seems to know that is the case. He clearly cannot afford to pay much more than the minimum payment at this time and is looking for an alternative. If you have a credit card interest rate of 12% and a balance of $25,000, you minimum monthly payment is going to be upwards of $500 for several months while going down slowly as long as there are no new charges . Thats not pocket change. To pay off a $25,000 balance with 12% interest rate, making just minimum payments would take 419 months. Thats almost 35 years. The best thing to do is not borrow more money. Call your credit card company and have them lower your interest rate, close the credit line and arrange monthly payments. Good luck.

  28. If he is paying a minimum payment monthly, he can pay the same amount to a gmach and not ruin his credit.

    If I had the money I would consider opening such a gmach with the condition that the person’s financial situation has a plan for changing As in a person who already transitioned from Kollel to a job but is still saddled with the debt that often comes with that transition for various reasonable reasons (schooling, suddenly cut support, unemployment…)

    For all the people judging him, this is too often the case and ends up hurting a family for a long time. If only we could help people in that position.

  29. I personally am in the process of trying to lend to a single mother with 6 kids a in order for her to pay off her high credit card interest balance and she will make a payment plan with me.
    I am not a GMACH and don’t think that this problem needs to be dealt with only on an organizational level. This can be dealt privately between 2 people. You also don’t need to be wealthy in order to be on the lender side. You can be an average person with some savings sitting in the bank. With todays Banking interest rates, it is almost a crime to leave the money there and make close to nothing.
    The major potential problem with the above is guaranteeing that the borrower sticks to the payment plan and ultimately will pay off your loan. I think this can partially be accomplished by signing over (Mashken)collateral like Diamond ring, Chasuna Jewlery and Silver or obviouslt much simpler if the Borrower has guarantors willing to sign.
    The Mitzva of helping someone stabilize their life (besides for the basic Mitzva of Lending) and the good feeling associated with this is self rewarding.
    Try lending on a small scale first.
    Obviously all this is when we are discussing people that for the most part are juggling their expenses and ran into a hard situation etc. where all you need is to help them turn the corner and needless to say you are dealing with Yerei Shamayim who feel the Achrayis of repaying.

  30. There a very famous popular book that addresses the spiritual root cause of debts and why no matter what people do or try it doesnt and wont help till they get to the root and fix it called THE GARDEN OF RICHES from Rav Shalom Arush Shlita

  31. I totally need this too. I have a credit card judgement against me and hadn’t been able to pay it. I probably can’t even get a bank account. I feel stuck.

  32. The prob I’m finding is when the borrowers and I’m saying private loans ( to help pay mortgage etc) the prob is when those people are living a fancier lifestyle then the ppl giving the loan!!! I’ve seen it happen way to many times!!!

  33. Cut up your credit cards,get a part time job to supplement your income. Stop looking for schools with high tuition , limit the number of children , get back on your feet the old fashion way,wait till you have cash to buy things there is a difference between wanting something and needling something.

  34. Comments above have suggested calling the CC company and having them shut the CC account and lowering the interest rate, or possibly reducing it to 0%. Does anyone know if that would hurt ones credit?

  35. Let nu not deny that there is a spending problem in Lakewood people are all driving expensive cars such as Hondas and Toyotas the odyssey and sienna these cars cost over 30k even leased are 5k a year not to mention the 3500 square ft homes ect. These people in most cases don’t make huge salarys. So start saying “no” to yourself before you swipe next time. Btw I live in a 1200 square ft home and happy not to owe anyone money.

  36. To#42
    Because you will explain to them that youre struggling and wont be able to keep making the payments for much longer
    If they dont offer then wait till after u miss ur payment at the due date then call back , your credit wont be affected till at least 30 days after the payment due date

  37. Comments above have suggested calling the CC company and having them shut the CC account and lowering the interest rate, or possibly reducing it to 0%. Does anyone know if that would hurt ones credit??

  38. Getting a part time job is not so simple if your full time one requires you to work 65/70 hours a week. And where are all of those “part time jobs” for frum people? Tuition costs what it costs, and I have never heard of a Rov that would tell a family to “limit the number of children” because of credit card debt. File for bankruptcy and start over fresh…it is an option when you just can’t pay it back!

  39. I recently settled about $50,000 in credit card debt for about 35 – 40 cents on the dollar. you don’t need to use any of these agencies that settle debt for you. you end up paying them for their service which is really unnecessary since you can do it on your own.of course, you will kill your credit but that can be fixed within a year or 2 if you go to the right people. if you want to take this route then you need to stop paying your credit cards and wait about 6 months for the debt to go to collections or the sort. then you can settle.
    there’s more but we’ll leave it at that.

  40. Read all the above. – I have dealt with this alot. many fall into this, the cc love to give you money and the minimum will take you forever to pay. you must speak to mesilah, they can help figure out your situation. – make a deal with cc. – then borrow from a gemach (there are gemachs that will help) and pay them interest free. – some other ideas, don’t finance a car which is a loan with interest, rather borrow from a gemach and buy a cheaper vehicle, with monthly payments to gemach. don’t buy a private house (if you can’t afford it) buy a townhouse – the taxes on the property are less, as are your heating and cooling bills. there is more to be said but to put it simply, every purchase or decision should be made with keeping the price tag in mind.

  41. 1) Spend within your means, get counseling if needed
    2) Cut up your credit cards
    A Gemach is a HORRIBLE idea since once you max that, you will post again on the scoop with another idea. (no a real chesed)
    Fixing the root problem is the way to go!

  42. This is so sad. Alot of ppl are going through such hard times, its takeh terrible. Sadly, most ppl or gemachs wont give u a loan unless u have a track record or a guarantor. I loaned a friend of mine $5,000 as he was making a chasanah. He assured me he’d pay me back in the next 6-9 months. This is about 3 yrs ago. Care to guess how much i got back so far ??

  43. I had some business reverses owed the cc company over 40000 even with making deals whith them i could not honer it then illines came i spoke to a attorney and went bankrup the best thing i ever did .i was clear of debts now i new credit cards and pay them off rver month i am back to work and am very happy ur credit is ruined anyway.by the way my credit score 740 took 2 years but i am back and can buy anythig

  44. to the person who wrote about people having a honda odyssey or toyota sienna what other car should a family with six kids buy. these are the only 2 vans that hold 8 people total.

  45. The YESHIVOS should not teach english then we would not have these problems right ??? WRONG !!! If you cant get a job that pays enough then you borrow from credit cards which cost even more (high interest) which forces you to borrow money from people who dont have it. What a great future we have.

  46. If you get yourself in this then get yourself out. Don’t depend on other people to get you out. Plan your spending accordingly, don’t buy a house you can’t afford and think about how many children you can raise in comfort.some day the bottom is going to fall out of the free stuff people are used to getting.

  47. Very simple. Cut up your credit cards and cheque books. Settle the balance of all your credit cards over monthly payments. Only use cash and a debit card. Period.

  48. Anyone who thinks that this person should stop spending alot of money just because he doesn’t have the money……. You sound awfully like the Tea Party. And that makes you a racist. The only reason you want this person to stop spending money that he doesn’t have is because you’re a racist and you hate Obama.

    (liberal logic)

  49. hy my name is daniel is there any body out there that cood help me with a loane i get 757 a mouth ssi is there any body you guys no how will give me a loan out there i could py them back mouthly if sow call me at 732 430 8258 thank you

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