I’m $17k in debt—$12k on credit cards (two Discover cards maxed out with $8k), and the rest on other cards. Plus, I have a $5k loan through Affirm. My credit score took a major hit from 800+ down to 500 because of maxed-out utilization, even though my payment history is fine. I’ve worked my way back up to 625, but I still can’t get approved for a personal loan to consolidate the credit cards for a lower interest rate. With my current income, I can barely save enough to pay anything extra towards the debt.
Go through your spending line by line and see where your money’s going. Time to make a strict budget and stick to it. Only way out of debt is to start paying it down.
Sam said:
Go through your spending line by line and see where your money’s going. Time to make a strict budget and stick to it. Only way out of debt is to start paying it down.
Exactly this. If you don’t change your spending habits, you’ll keep getting stuck in the debt cycle.
Sam said:
Go through your spending line by line and see where your money’s going. Time to make a strict budget and stick to it. Only way out of debt is to start paying it down.
It’s all about that budget grind . I started tracking mine and realized how much I was wasting on random stuff like coffee. It’s tough, but it’s such a good feeling when you see the debt drop even a little.
Check out a debt management plan (DMP). I haven’t started one yet, but I signed up through MMI (Money Management International) after hearing a friend’s experience. It’ll hurt your credit initially, but they help negotiate lower interest rates. It might be worth considering.
I once built my score back up from 500 to 770, but after some personal issues, it tanked again to 550. I currently have about $90k in debt. I remember when $10k debt felt overwhelming, but there are ways to fix it with time. The first step is figuring out how to reduce it.
Cut expenses, use apps like Rocket Money, and stick to using just a debit card. If necessary, negotiate directly with creditors or look into DMPs.
@Suki
Another vote for DMP. I joined one last year, and it’s been a lifesaver. Yes, your accounts get closed, which can slightly lower your score at first, but my credit recovered quickly and has been improving since.
I had over $40k in debt and paid off $10k through the DMP last year. They negotiate lower payments and interest rates, so now I just make one payment every month. Most of my cards agreed to 1-2% interest. If you’re lucky, your employer might offer free financial counseling, which could waive setup fees for a DMP.
Honestly, if you’re worried you might start using the cards again after paying them off, DMP is a good option since they close the accounts. It’s been a game-changer for me.
@Wynn
Is National Debt Relief a DMP? Also, do they keep charging you after you finish paying off the debt? Curious what happens if you finish early.
Jordan said:
@Wynn
Is National Debt Relief a DMP? Also, do they keep charging you after you finish paying off the debt? Curious what happens if you finish early.
National Debt Relief isn’t exactly a DMP. They negotiate settlements instead of lowering interest rates and payments. I’m not sure how that impacts your credit.
With a DMP, there’s no penalty for paying early. Once my debt is fully paid, I won’t have to keep paying the monthly DMP fee. Since the accounts were already closed, they’ll stay closed once the DMP ends. I could apply for new cards if I wanted, but I’m avoiding that for now.
@Wynn
Thanks for the info. I’m thinking I can pay off my debt faster than planned, so just trying to figure out what happens after the final payment.
Stop borrowing more money. Cut your spending and start knocking down the credit card balances as fast as possible.
Taking out more loans to deal with existing debt is a risky move. Most lenders won’t approve you because they see how things went before, and they’re trying to save you from making things worse.
Get serious about budgeting and cut down every expense you can. Write everything down—it’ll help you see exactly where your money is going and where you can cut back. It’s not easy, but it’s the way out.
@Palmer
You’re right for the most part, but sometimes people end up in debt because life throws them curveballs. Not always because of bad spending habits.
Flynn said:
@Palmer
You’re right for the most part, but sometimes people end up in debt because life throws them curveballs. Not always because of bad spending habits.
Yeah, been there myself. I tried to borrow my way out once, and it only made things worse. Glad I learned from it.
Focus on paying off the highest interest debt first. If possible, get a second job and put all that income towards the debt. Every bit helps.
Whitney said:
Focus on paying off the highest interest debt first. If possible, get a second job and put all that income towards the debt. Every bit helps.
Just make sure you’re still getting proper nutrition. Debt sucks, but long-term health issues from a bad diet aren’t worth it.
One thing that helped me was creating a budget on Google Sheets. I tracked every single purchase, no matter how small. Seeing all those little expenses like snacks and drinks added up fast, and I realized where I was overspending.
Also, making your own meals saves a lot. I started cooking for around $3 per meal, which is way cheaper than eating out.