I feel like I’ll never be able to pay off the credit card because I have $10,000 on it and it costs me $250 every month.
Credit card providers will give you 0% cards that you can use to pay off the principal for a predetermined amount of time if your credit is decent. Just be mindful of transfer fees; typically, the promotion will cover the initial move at no cost. This was the most effective method for getting back on your feet; I’ve been in a similar situation. I wish you luck because you can succeed.
First, identify the source of the issue. Do you simply spend too much? Not generating enough revenue? Both? Will spending have to be reduced?
Everyone advises getting a 0% balance transfer, but it means you’ll have two cards and run the risk of accruing more debt. Emergencies do occur, but when they do, we have funds in a HYSA, which should help us land a little easier when a huge bill arrives.
Best of luck and be careful as you embark on your debt-free road.
This is the response. They must demonstrate their ability to set strict spending limits and create a budget. Otherwise, their debt load will increase by double.
Balance transfers are more likely to be available to people with good income, credit, and usage ratios. It might seem like there isn’t much leeway for OP to accomplish this right now. I would try to negotiate a lower APR by calling each creditor. If not, consider having a parent or other representative co-sign a balance transfer so that the amounts can be transferred and you can pay them each month to avoid paying exorbitant interest rates. Although I’m not very familiar with the history, please don’t follow me about believing that no one should ever co-sign anything. All I’m trying to say is, is this even possible?
Ask the CC if they handle financial challenges by giving them a call. Occasionally, they will reduce the payments for a year and set the interest rate at zero or less.
If you decide to do a balance transfer, avoid making any new charges on that card until the transfer is fully paid off. Payments will usually go towards the transfer first, leaving any new purchases to accumulate interest. Also, keep in mind that there will be a transfer fee involved.
Don’t go this route if you know you might lack the discipline to avoid racking up the card again, or you could end up in an even worse situation. Be honest with yourself—many people struggle with this, myself included at one point, but I’ve learned and improved over time.
I once saw a coworker receive a large sum from a land sale and life insurance payout, completely pay off his debts, and still have $100k left over. Within just a few years, he not only burned through that money but also fell back into heavy debt. He eventually had to remortgage his fully paid-off house to clear his new credit card debt, only to max out those cards again. To make matters worse, his new wife totaled his nearly paid-off pickup truck.
The issue with spending is that it gets harder and harder to spend when you don’t have the money in cash. To pay it off sooner, your only options are to sell items, apply for a second job, or do anything else. Although you can request a reduction in interest, lenders usually won’t do so until you’re past due. In exchange, they might wish to cancel the card and cut your limit to $0.
Look into transferring your balance. When you move a credit card’s balance to another credit card company, you essentially halt the interest on the card. Usually comes with conditions, but that’s what you’re looking for