I’m 24 and sitting on about 15k in credit card debt and loans (not counting my car). This all happened because of unexpected expenses, and now I feel completely stuck.
I make around $4,500 a month (commission-based job), but my fixed expenses like rent, utilities, car, and insurance add up to $3,584. That doesn’t leave me much room, and interest is making it impossible to get ahead.
I got an offer for a 15k loan at 25% APR with a $650 monthly payment, but the total cost would be over 25k. Obviously, that’s a terrible deal, but I wish I could find something similar without the insane interest.
I just don’t know what to do. Is there a way to consolidate everything into one payment without getting ripped off? Should I file for bankruptcy? What happens if I go that route, and how bad is it long-term?
I already know about the snowball method and saving, but right now, I don’t have extra money to throw at this. Any advice would really help.
Edit: I work 55 hours a week, so a second job would be tough, but I’m open to ideas.
Call your credit card companies directly and ask about a hardship plan. Sometimes they’ll lower your interest or let you do a 5-year payment plan at 0% or a lower rate. You may need to wait until you’re a couple of days past due to qualify.
I had 100k in debt, and this saved me a ton in interest. It won’t hurt your credit score unless you’re losing a lot of available credit.
@Riley
This works, but not enough people know about it. I’ve mentioned it before and got downvoted, probably because some so-called ‘credit repair experts’ want people to think they have to pay for help instead of just calling their lender.
Tatum said: @Riley
Should I just ask for a hardship plan, or try negotiating the balance first?
No need to negotiate. Just ask for the hardship plan. They’ll ask a few basic questions about your financial situation, and if you qualify, they’ll offer a lower interest rate or a fixed plan. It only takes about 15 minutes. I did it with Citibank and Synchrony, and it helped a lot. You just have to be okay with closing the card.
Check out NFCC (National Foundation for Credit Counseling). They can work with your lenders to lower your interest rates and help you get out of debt without trashing your credit.
Look into a 0% balance transfer credit card. Some have 12-24 months with no interest. You could transfer your balances and make payments without the crazy interest stacking up.
August said:
Look into a 0% balance transfer credit card. Some have 12-24 months with no interest. You could transfer your balances and make payments without the crazy interest stacking up.
Be careful with this. If you don’t pay the full balance before the promo period ends, you’ll start paying interest on the remaining amount. If you’re not sure you can pay it off in time, it might not be worth it.
@Zade
That’s only for deferred interest cards, which are different. With balance transfers, you just start paying interest on whatever balance is left after the promo period, not on the full original amount.