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Dave Says – You need action, not words, to deal with credit card debt

Need some financial advice? Debt and income crisis? Pay off the house first? Check cashing? Taxes? Credit Cards? Check out what folks are asking Dave Ramsey.


You need actions, not words


Dear Dave,
My husband and I have about $20,000 in credit card debt, plus payments on a new truck. We also have a camper he bought before we got married that we’re still making payments on. I recently received a $50,000 inheritance, and I’d like to use that money to help get us out of debt and open a savings account. My husband says he is onboard, but he keeps buying things we don’t have the money for. I don’t want the inheritance to go to waste, so what can I do?


Dear Tessa,
I want you guys to get control of your finances and have a better life, too. But until your husband is willing to get rid of the camper and the truck, I’d hang on to the inheritance money.

Right now, you need more than his words—you need his actions. At this point, the real issue isn’t the debt or the idea of using the gift you received to pay off the debt. The issue is you can’t see a future where your husband isn’t going to repeat the same financial stupidity. You need to have that future cleared up, and it isn’t going to be cleared up until he proves he has changed his heart and his ways. In his case, that means showing he has become a grown-up and isn’t buying toys he can’t afford anymore.

I know where you are, and I know where he is right now. I’ve been there. Years ago, I was a “grown man” but I was still really a little boy buying things I couldn’t afford to impress people I didn’t even know. This guy likes stuff. He likes shiny trucks, shiny things to pull behind shiny trucks, and that sort of thing.

But it’s time for him to sell all the crap, grow up, and start putting you and your family first. Keep talking to him. Explain how important it is to you that you’re both on same page financially and in every other aspect of your marriage. Until he proves he’s ready to do that, though, I’d say just hold on to the inheritance money.


Relationships and money


Dear Dave,
My father-in-law wants to help us with our mortgage. We’ve been working hard to pay off our home early, and we’ve reduced what we owe to around $35,000. His idea is to pay off the remainder, then let us pay him back over time. In the past, he has loaned us much smaller amounts and everything has worked out fine. What do you think about this?


Dear Brianne,
I’m sure this seems like a winning proposition all the way around. My concern is there’s a big spiritual and emotional issue that has been left out of the equation. The borrower is always slave to the lender, and nowhere is that more true than in a family.

I understand, too, you have a solid track record with this kind of thing. But anytime you borrow money from family you’re playing with fire. When you do something like this, especially with such a large amount, the money issue is likely to be a shadow hovering over your relationship. Family get togethers, special events, and holidays will feel different when you’re there with your lender instead of just good old dad.

I assume your father-in-law is doing well financially, since he can afford to make this offer. And don’t get me wrong, it’s a very kind and generous offer. If I were in his shoes, I might offer instead to pay off the mortgage as a gift to my son and daughter-in-law for working so hard to attain a goal. But it would be a gift. No strings attached.

If you have a nice, stable family, this debt will always be there in the back of your mind. If you have a dysfunctional, control-freak kind of family, it’s going to be right there in front of you constantly. Either way, I don’t think it’s worth the risk.


Fight back against fraud


Dear Dave,
We recently learned that my wife’s ex-husband used her social security number to establish several credit card accounts. We’ve written and called the credit card companies, and we’re disputing the charges, but is there anything else we can do to protect ourselves and put an end to this?


Dear Ken,
You bet there is! File a police report immediately, and if possible, have this guy arrested. He has committed criminal fraud, and it’s not something you should take lightly. Also, put a fraud victim alert on your credit bureau reports today.

Don’t stop with just alerting the credit card companies about this situation. You should be speaking with and communicating via email—plus snail mail, if necessary—directly with the fraud victim division at every credit card company involved. Make sure they understand this is a denial of responsibility and not simply a dispute.

Let them know you’re sorry this happened, but explain that all these charges in your names are the result of a criminal act perpetrated against you. You may have to stand your ground with the credit card companies, because some of them might try to get you to pay it, anyway. Don’t do it!


Dave Says – Don’t play the game