I have absolutely no idea what my reaction should be right now – I mean, I’m thrilled that I’ve DESTROYED my credit card debt – which was in the $40,000 range just a few short years ago. But I’m not out of debt debt just yet (rhyme not intended), as I have just graduated from my MBA program and have a ton of student loan debt coming my way.

Let’s be honest though, if you’re going to have any type of debt – student loan debt isn’t a bad one to have. First, I have the degree. Second, it’s a very low interest rate – which will allow me to throw as much extra money as possible towards the principal.

As soon as I have all details for the new student debt – yes, I’m still paying off my undergrad debt as well – I’ll add it to the tally and we’ll start chopping that down as well.

For now though, I’ve got a lot going on which will definitely change my situation (updates to come) and I need to start determining what my priorities/goals are regarding wealth creation (e.g. house, stocks, retirement accounts, etc.).

I’ve been a prisoner of my credit card debt for WAY to long to just sit back and not make up for lost time.

Well, what you may not realize is that advise is now more relevant than ever. The credit card reforms that went into play this year make it possible for those of us with credit card debt to save a lot of money and hopefully get out of debt faster – if we abide by the rule and pay more than the minimum. In fact – the Center for Responsible Lending says that the reform will save about $2 for every dollar you pay above the minimum. Pretty sweet, huh?Here are the Center for Responsible Lending’s four tips for cardholders:

1. Pay above the minimum amount due! Paying more than the minimum can save you as much as $2 for every extra $1 you pay. For example, before the CARD Act, paying $100 extra could save you $164 in interest charges, but now that same payment amount can save you $224.

2. Continue to watch out for hair-trigger penalty rates. Issuers can still raise your interest rates on new balances for the slightest reason. It is particularly important to pay above the minimum if you get hit with a penalty rate. Doubling your payment could cut your interest charges over the following four years by more than half.

3. Don’t opt in to over-the-limit coverage. Over-the-limit coverage is a bad deal because it means that if you go above your limit, the credit card company will extend you additional credit at an exorbitant cost automatically — as much as 4,215% APR (annual percentage rate) – instead of rejecting your card. A better option would be to call your issuer to see if you can have your limit raised, or apply for additional credit elsewhere.

4. Avoid arbitration clauses in credit card contracts. Protect your rights. There are now more card options without arbitration clauses and you should ask your credit card company for one. Forced arbitration requires the borrower to resolve any dispute with an arbitrator, not in court. Research shows decisions in arbitration favor card issuers, rarely the wronged borrower.

I hadn’t carried a balance on the cards for probably over a year now, but didn’t want to cancel them in case the reduction in available credit would impact my overall credit score and therefore my rates on existing balances.

But with the new credit card rules coming into effect and the current state of lending – I feel that now is as good a time as ever to cancel my zero balances. I’m making good progress in paying down debt and if there are any repercussions to canceling cards – I’m betting that it will help in the long run if I just start making adjustments now.

One thing I do know so far is that I’m thrilled to no longer have any ties to Bank of America.

Also, below is the actual video from Jackie Ramos, in case you want to hear her whole story:

From time to time, you need motivation to keep going and keep sacrificing quick hits of happiness to really pay down debt. This movie motivates in two ways:

1. It scares the hell out of you. (i.e. 57 year old woman talking about how she’s considered suicide because she’s in so much emotional pain as a cause of her debt burden)
2. It shines a light on what you, as a consumer, are really up against.

As you can imagine, the credit card industry is a well-oiled machine and they know where to pull and push in order to get the maximum from each and every card holder. It’s really amazing to think of how calculating the system they have created has become.

As I watched, I couldn’t help but think about how the banking and credit card industry advertise their products – both in commercials and disgustingly blatant in-show placements. The goal of advertising and branding is to give a brand a personality – something that makes you feel a certain way and help you develop an emotional connection to them or their product(s).

Credit cards and banks do this very well. Their ads and slogans (Bank of America = Bank of Opportunity) make you believe that they’re friendly companies that just want to help you enjoy your life on your terms. They make dreams come true and are in your corner through good times and bad.

After watching Maxed Out, it’s clear that nothing could be further from the truth.

But in reviewing this old consumerist post, I’m wondering if I should cancel the zero’d out cards now and continue to do so as I whittle my balances down or if I should just wait until I’m completely debt free and have a little card canceling party?  It would be really fun to call these guys up sooner rather than later to say thanks, but no thanks.  But my sense is that I should wait.

I’d really be interested to know what you guys think and why?  Have any of you experienced adverse effects of closing out your cards while still paying down credit card debt?

According to this article on CNN.com:

Buying gasoline with a credit card could be hurting your local independent gas station owner – and you may have to pay for it.

That’s because credit cards charge merchant fees in the form of a percentage of sales – and those fees eat into the fixed per-gallon sum that gas retailers tack onto pump prices.

Some stations raise prices in order to keep profit steady.

It makes sense. All I know is that I’m glad that I now have shredded all my credit cards and have taking public transportation to work for a full year now. The timing seems to have worked out in my favor.

Among other things, the regulation asks for:

• Bills to be mailed out 21-days prior to due date
• An end to the practice of applying payments only to balances with the lowest interest rates (leaving the higher rate debt in full)

But what I found to be one of the best excerpts from the story was:

Just ask Victoria Ramirez. The San Jose elementary school teacher once had as much as $45,000 in debt on six different cards.

Now she and her husband have whittled that down to a balance of about $10,000 on a single card.

Ramirez, 37, said card issuers make it all too easy to get into trouble.

“They loan you a big amount of money that you can’t take care of,” she said.

This isn’t so different from what’s happening in the housing market. One reason so many people are in danger of losing their homes right now is because banks handed out high-risk loans to folks who had no business getting deep into debt.

To be sure, many such loan recipients deserve a share of the blame for being so reckless with their personal finances. But they wouldn’t have gotten into trouble without the willing complicity of lenders, which encouraged virtually all home buyers to take the plunge, regardless of their ability to repay loans.

While I agree with that – I’m most impressed by her debt reduction. They don’t say how she did it or what the time frame was, but debt reduction is debt reduction and I can’t wait to join the club.

Also, I just want to call out that I don’t think that the debt crisis is the credit companies fault. And I don’t think that they are to blame for my situation either. I think we should all be responsible. But drug dealers that don’t do drugs still go to jail, know what I mean? Sure people have to be responsible for their actions, but they should not be enabled to ruin their lives.

‘‘The truth is, our middle-class families are not going to be secure so long as they can’t get out of debt,’’ Obama said Monday, sharpening the populist rhetoric of his presidential campaign. ‘‘If we’re serious about stopping Americans from falling deeper in debt, we’ve got to crack down on predatory credit card companies that are pushing them over the edge.’’

Obama pointed to studies showing that consumers have an average personal debt of more than $8,000, a load driven higher by credit cards. He said soaring credit card debt could turn into a crisis as big as the one in the subprime mortgage industry.

Now I am not saying that my debt isn’t my fault. The debt that I have accrued is 100% mine. But it’s good to know that a presidential candidate is interested in looking out for people like me to make sure that no one (and no credit card company) kicks me while I’m down.

I haven’t been close attention to the candidates just yet, but this has definitely piqued my interest.