Am feeling overwhelmed and desperate for advice. I currently have $10,000 in debt on a credit card with a whopping 30% interest rate. My lowest payment is about $329, but I’ve been making $400 payments each month. Despite this, my balance has only dropped to $9,559. This debt is consuming me financially and emotionally.
After covering my bills each month, I’m left with roughly $500, which has to cover everything from food to diapers and wipes for my family. I only have $800 in savings, which I need to keep for emergencies.
I’m at my wit’s end and really need to find a way to pay this off faster. Does anyone have any suggestions or strategies that could help me reduce this debt quickly?
You can try calling your credit card company and explain your situation. Sometimes, they will pause interest on your balance, but you won’t be able to make new charges. You might also ask them to increase your credit limit, which can help improve your credit score.
If you’re good with finances, you might open a couple of checking accounts to get bank bonuses. A few hundred dollars in bonuses isn’t bad. Just make sure there are no minimum deposit requirements to avoid fees.
Balance transfers won’t be an option because once you’re in too much debt, you’re considered too risky for that. Try to cut your spending and find ways to increase your income.
I’d really dislike doing this, but I’d consider taking out a loan to pay off this debt if it has a much lower interest rate. If you’ve tried this and got denied, look at other things that are draining your money. Do you owe money on a car? How much is the car worth? Could you sell it and buy a $2,000 car for now?
In tough situations, you might have to make hard choices. If your car is taking up more than 10% of your income, it might be worth considering giving it up, especially given your situation. You can always get another car later. You can find a good deal on a Honda Odyssey, an older RAV4, Pilot, or Highlander, which can help reduce your financial stress.
Make more income. Really cut out spending what you don’t need right now. Cable? Subscription? Bad habits? Really go bare minimum until you can increase your income. What is your current job?
Definitely look for a 0% APR balance transfer credit card. You should find one with 0% interest for 15-18 months. The transfer fee will be about 3% of your total debt. Paying the fee might be annoying, but it will save you from paying interest on your debt each month…