I’m 19 and have about $5,500 in credit card debt. I make $6,500 a month, with my monthly expenses under $2,000. I’m planning to put everything I make for the next two months into paying off my credit cards. Is that the best approach, or does anyone have other ideas?
Make sure to keep making minimum payments on all cards so they don’t fall behind. Late payments can mess up your credit. Focus any extra cash on the highest interest cards first, or if it feels easier, start with the lowest balance. Both ways work, just keep your focus on one at a time.
Your expenses are on the low side, which is good. Ideally, you wouldn’t want a vehicle payment taking up around 10% of your income, but overall, your fixed costs aren’t bad. Just focus on knocking out this debt over the next couple of months. Once that’s done, start a budget that includes some money for fun but also saves for emergencies. You’re young, and it’s good you’re learning about managing debt early. It’ll help you avoid these situations in the future.
@Tobin
Yeah, that’s what I’m aiming for. I’ve been trying to stay debt-free, but life happened, and here I am. At least it’s manageable. The car payment is higher because I live in Alaska, and I needed an AWD car for winter, plus it’s my first car loan, so the interest is up there. My income should increase over time, too. For now, I’m making minimum payments when possible, but my next paycheck is two weeks out.
Just started this job, so my income is $6,500 a month now. I was unemployed for a couple of months before, and during that time, I covered living expenses for me and someone else with my credit cards.
Vance said:
With that income and low monthly expenses, you could wipe this debt out in about three months, honestly. Just buckle down a bit, and you’re good.
Just wanted to check if there were any better options. That was my plan, though.
@Marin
What other options were you thinking? Honestly, paying it down quickly is almost always the best move. Avoid spending on extras, and you’ll be debt-free in no time.
Vance said: @Marin
What other options were you thinking? Honestly, paying it down quickly is almost always the best move. Avoid spending on extras, and you’ll be debt-free in no time.
I wasn’t sure. Just wanted to see if there were any other strategies besides just cutting out extras and paying it all off.
@Marin
Well, you could skip payments and damage your credit, or try a consolidation loan, but those are for people with way bigger debts. Your best move, given what you shared, is to put about $2,000 a month toward it. You’ll still have cash for living expenses, and you’ll be done in a few months. Just make sure not to use the cards in the meantime.
@Vance
That’s what I’m leaning toward. I stopped using the cards now that I’m getting paid. Just wasn’t sure if there were other options, like a consolidation loan, but sounds like that’s more for big debt situations.
Vance said: @Marin
You’re in decent shape with what you’ve shared. Stick with your plan and make a budget, and you’ll be good.
Sounds good, thanks!
Check your statements to see which cards are charging the most interest and hit those first. Just because one has a bigger balance doesn’t always mean it’s the priciest in terms of interest. Aim any extra cash at the ones costing you more to avoid more fees.
First, stop using the credit cards entirely. Then, try the snowball approach: pay off the smallest balance first, then move on to the next. Honestly, though, why so many cards? Isn’t one enough? It just ups the risk of falling into big debt when you’re juggling so many.