Making 65k… stuck with 16k credit card debt… is this manageable?

I’ve got 3 credit cards adding up to $16k in debt. One of them has $7k with a 25.5% interest rate, the other two are $4k at 18% and $5k at 19%. My yearly salary is $65k before any bonus. This year’s bonus should be around $5k.

After insurance and investments, my take-home pay is $3,300. All my monthly expenses (mortgage, groceries, phone, etc.) come to $2,900, so I’ve got about $400 left to put toward the cards. I’m up to date with all my payments and have stopped using the cards. My plan is to use my bonus to pay off the $4k one first, and if possible, put some toward the $5k balance. I saw this thing about the snowball method (thanks to Dave Ramsey), and I thought it might work.

I’m just wondering… is this plan good enough? Should I be more worried?

You’re paying way too much interest. Try getting a debt consolidation loan or a personal loan at a lower rate, like 8%.

Remington said:
You’re paying way too much interest. Try getting a debt consolidation loan or a personal loan at a lower rate, like 8%.

How do I find a legit loan option? A year ago, I checked one out, but they offered 19% interest with a 5% fee. My credit score is 690.

@Huxley
Check out personal loans from Discover. I got 7%, but I’ve got an 800+ credit score. Choose ‘debt consolidation’ as the reason. They’ll pay off your cards directly and send any leftover cash to your account. For example, if you qualify for $17k, they’ll pay your $16k debt and give you $1k for your bank. Then you just make monthly payments.

@Remington
Thanks, I’ll look into that. Do you think 690 is too low to qualify? When I bought my house, my score was 810, but that was five years ago.

Huxley said:
@Remington
Thanks, I’ll look into that. Do you think 690 is too low to qualify? When I bought my house, my score was 810, but that was five years ago.

Try apps like Karma or NerdWallet. They show you loan offers based on your credit without a hard inquiry, so you can get an idea of your chances.

@Huxley
Try a credit union.

@Huxley
Avoid debt consolidation programs. Instead, look for balance transfer promotions or personal loans with lower interest.

It depends on how serious you want to get about this. Having credit card debt is bad, but it’s pretty common.

If I were you, I’d treat this as urgent and make paying it off a top priority. Every month you keep the debt, you’re delaying your future and hurting your ability to build savings and wealth.

That said, people have paid off worse debt situations than this, but it might mean cutting back a lot.

@Indra
I’ve been trying to pay my mortgage off faster so I’m not stuck paying it when I’m older. Right now, my mortgage will be done just after I turn 38. I’ve also been putting money into my 401k since I was 18 and now have $60k saved. My employer matches my contributions dollar for dollar.

The money for my investments gets taken out before I even see it, so it’s never been part of what I count as spending money.

You shouldn’t have any credit card debt. This is bad.

Keller said:
You shouldn’t have any credit card debt. This is bad.

Well, that’s uplifting. Guess I’ll go jump off a bridge now.

Huxley said:

Keller said:
You shouldn’t have any credit card debt. This is bad.

Well, that’s uplifting. Guess I’ll go jump off a bridge now.

You asked for opinions. It’s not the end of the world, but it’s still not great.

Hard to say without knowing more about your monthly expenses. How much is your mortgage? It looks like that might be eating up most of your income.

Devon said:
Hard to say without knowing more about your monthly expenses. How much is your mortgage? It looks like that might be eating up most of your income.

My mortgage is $1,600 (including insurance and taxes). Other bills:

  • Car insurance: $200
  • Gas: $80
  • Electricity: $200
  • Water/sewage: $75
  • Internet: $80
  • Phone: $150
  • Food: $400
  • Gym: $20
  • Household stuff: $40

I also spend about $40 monthly on a volunteer program.

@Huxley
Your mortgage is nearly half your take-home pay. That’s probably too high for your income.

Keller said:
@Huxley
Your mortgage is nearly half your take-home pay. That’s probably too high for your income.

I locked in a 2% interest rate on a 15-year loan, and I’m in year 5. My credit’s worse now, so I don’t want to refinance.

@Huxley
Can you find a side gig to earn an extra $500 a month? Or maybe look into getting a loan through a credit union or using your home equity?

That credit card interest is really high, and you don’t have much room to work with.

@Kim
I’m already working 60 hours a week and taking online classes through my job. I don’t think I can fit another job in right now.

When I checked about a debt consolidation loan, they quoted me 19% interest with a 5% fee.

@Huxley
By the way, Dave Ramsey’s advice isn’t always the best. His snowball method works more as a motivation trick, but financially it’s better to pay off the highest interest rate first.

You’re doing okay, and you sound smart enough to handle better financial advice.