John Commutta "Turning Debt into Wealth"

[speckle-catcher]

I hear commercials for this guy all the time on the radio (particularly on 103.7 in the mornings)

has anyone ever looked into his "system"??

I have no debt - and I ain't no dummy...but I'd like to know how his "clients" can claim to pay off a 30 year mortgage in 2 years.

[Tortuga]

Thank ol' John may be talkin' about "turning YOUR debt into HIS wealth." LOL

[bill]

Lottery?

[Sow Trout]

Simple! Pay half one year and half the second year.

[PalmsUp]

I heard its a simple bill filing system where you catagorize each bill and pay them off according to interest amount/rate/penalty until you finally pay all your bills. Paying your mortgage off early is easy, you just write bigger checks more often. These people who put together these types of scams are shameless. Your on the right track- no debt
My grandfather always said-

PAY AS YOU GO- YOU NEVER OWE

[kvan]

I bought the Commutta program a little over a year ago. This is no scam. It is basic credit card math, and it works. Most people should be able to eliminate all credit card debt in 2-3 years, and a mortgage in a total of 5-7 years. I've been working down $60k in debt, got it down to $42k, and will be done with it in a couple more years.

If anybody's heard of Dave Ramsey, he has another very popular system that is almost the same as the Commutta system. They both work with a "snowballing payment" strategy. Figure out your total minimums, then commit to a monthly amount a bit higher than that. All the extra amount you can come up with pays down a single account, until it is paid off. This account is usually the highest interest account, though Ramsey says to choose the lowest balance account to pay it off fast. Once the first one is paid off, you continue with your commitment, but now the amount you were paying on that first account is available to accelerate pay down of the next account. This is the growing "snowball" payment, which grows each time another account is paid off, so that future accounts are paid off much, much faster.

If you're interested in seeing more about how the Commutta and Ramsey programs work, www.DueMinder.com has software that implements the system. You plug in your account information and commitment level, and it calculates the best amount to pay on each card each month, and sends you reminders to make the payments. It also simulates all payments, so you can see exactly how your debt is paid off in 2-3 years, month by month.

[tngbmt]

you dont need a stupid program to tell you how to live within your pay check.
there is no magic in any of these programs. live on the minimum (comforably without incurring the wrath from your significant other) while putting the rest into debt paying without incurring new debt, then stick with it. ramsey's snow ball effect is just psychological, pay off the small one first while paying minimum to the rest. the magic word is discipline and dont buy junk that you dont need (like these programs). after you paid off all debt continue on the system but pay yourself.

[kvan]

live on the minimum (comforably without incurring the wrath from your significant other) while putting the rest into debt paying without incurring new debt, then stick with it.

Absolutely correct. The caution is that credit card companies send a bill every month, and if you pay them what they ask for (the minimum payment), it will take 20-30 years to pay off all your debt, instead of the 2-3 years if you really focus on paying off debt.

I don't think I mentioned this... www.DueMinder.com is a free site with free software, you don't pay for anything on that site. For people not familiar, the site can also show you the methods credit card companies use to keep you hooked and in debt.

[OffShore Man]

tngbmt is right you dont need to give these guys part of your income to pay off debt.
On the otherside there are a lot of people who dont get credit(debt) or interest and want to learn what they should have in public school, then I guess it is worthwhile. Better late than never, right.

[Cat O' Lies]

I think a better product would be, "How To Live Within Your Means." I bet not to many would buy that program.

I want to add something that these programs may or may not tell you. People that are in debt with good credit need to play musical chair with thier cards. I had over 40k on cards due to domestic issues (divorce, lay off, child support). I managed to keep my credit in good shape and that allowed me to call my credit card companies every 6 months or so and ask for a better rate. It didn't always work, but a point here and a point there makes a difference. And, on a weekly basis I would get balance transfer offers with very low interest rates that were good for 6 mo. to a year, some even for the life of the balance. Those are the best but beware that if you charge anything else on that card all payments go the the charged balance before the transferred balance and usually at a much higher rate So, I'd take the balance with the highest rate and transfer it to that card. After a while of doing this and paying more that the minimum payment, I finally paid it all off last October. The highest rate I was paying was 6.9% fixed. Remember, always try to get the FIXED rate, not the variable. Any rate that is Prime + is not for you.

[kvan]

Cat O'Lies, congrats on paying off a huge debt like that! Yours is a very good strategy, and its sometimes called "Credit Card Arbitrage". Commutta and Ramsey warn against this because there are so many people that don't have the discipline to stick to it. The pitfalls are what you mentioned... don't ever charge on a card that you've transferred to, and you must pay more than the minimums to pay things down in a reasonable time. And of course, this goes without saying: never, ever be late on a payment, because you'll lose your special rate, pay outrageous fees, end up with 20% rate or higher, and lose any transfer fee you paid. Automatic payments are a must with this method.

DueMinder helps people doing this with "what if" scenarios, so you can see how much quicker you'll pay off your debt with one of these intro rates. I am doing this exact same system, and I'm currently averaging 3% on my credit card debt, and trying to pay as much extra every month as possible. Its not for everybody, but if you are attentive, you can pay off debt much faster with the lower rates.