Interesting article about the credit card regulation on LAtimes.com today.

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.

Presidential Candidate, Barack Obama, has spoken out against credit card companies:

‘‘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.

So, as I’ve always mentioned, I’m not claiming to know the answers to getting out of debt – this is evidenced by my attempts at climbing out of debt and the failure I encountered.

In fact, as I type that I see how debt is like the Greek myth of Sisyphus who’s punishment from Zeus (for trying to be on the same level as the gods – Sisyphus was mortal) was that he roll a huge rock up a steep hill, but before he reached the top of the hill, the rock always escaped him and he had to begin again.

Not that money makes gods of people, but you can’t deny that having money – true money, not available credit – is a powerful thing. And they say that to err is human and what is now more human (or a bigger error) than credit card debt. As ‘humans’ we pretend to be on the same level as those with money – spending borrowed money in an effort to keep up or show ‘purchasing power’. However, we are then only punished with having to fight a seemingly endless battle with that debt. Pushing the rock up the mountain only to lose our grip and watch it roll all the way down again.

…too deep? Eh – it’s late, whatever.

Anyway, so I was reading a few bankrate articles on improving your credit score and I seemed to either have lost site of the fact that an important factor is keeping the cards around 30% spent in order to not lose any points on my credit score (some articles say around 50% is okay). After doing the math this evening, the 6 remaining credit card balances that I am dealing with are 97%, 93%, 89%, 83%, 78%, and 34%.

Not good.

A while ago I read Dave Ramsey’s Total Money Makeover (on sale now for $10 on his site…wink.) and, honestly, I wasn’t overly impressed. It seemed like 200 or so pages which could basically be summed up with the sentence “Just pay it off”. However, maybe I read it wrong since Mr. Ramsey seems to be doing fine (yes…he does accept credit cards…another wink) and has a fairly large fan base. I don’t know – I just feel that debt is more a mental thing than anything. If paying it off were that easy – everyone would do it and no one would need advice, support or…ahem…a blog. But it’s not easy, it’s really hard and I think most books don’t address that. Anyhow…

Mr. Ramsey says to pay down your debt with the lowest balance first – and the term he uses to describe how to approach this debt pay-down is “gazelle intensity”. While, being from Boston, the metaphor to me is a little odd – I do understand what he’s saying and have decided to give it a try.

Those of you that have been reading a long know that I’m not a great budgeter and prefer to set up automatic systems as a way to dummy-proof things. So I’m going to refer to a basic budget that I had been piecing together and max out payments to the lowest percentage debt and work my way up to the top. With the help of an expected (knock on wood) Christmas bonus from the new job – I plan to have the first debt (34%) gone by the end of December. The next debt, with the help of another small and expected windfall in the form of a tax refund should help me eliminate yet another debt by February depending on when I receive my W2.

It’s exciting to think of this new plan and to actually watch chunks of debt go away – but I know that regardless of the plan, the amount that I have to work with (my paycheck) doesn’t change and that it will take time, perseverance and some of that mental toughness that no one writes about…well…except for a blogger or two.

Last night, my dog tried to help me in my fight against credit cards and debt. Though, she took a few “innocents” along with him. I fell asleep on the couch last night, before I put her in her crate and she ate my wallet – or at least a quarter of it.

She ate my emergency credit card and my debit card. As well as a few other things, but thankfully no money or checks.

Oh well, I needed a new wallet anyway.

(by the way, I’m about 1/2 way through reading the Dog Whisperer’s book, “Cesar’s Way” – so hopefully the eating of wallets will soon be a thing of the past)