I’ve been struggling with credit card debt for a few years now and feel like I’m going in circles. Right now, I owe about $25,000 across five cards with interest rates between 26.49% and 34.99%. My monthly payments total around $882, but most of that—about $580—goes to interest, so I’m barely making a dent in the balance.
I’ve looked into personal loans to consolidate everything into one payment, but the rates I qualify for aren’t great. For example, OneMain Financial offered me a loan at 22.15% APR, which would cost me $664–$735 per month for 54–60 months. They’d also require my car as collateral. My FICO score is 671, so options for lower rates seem limited.
Some other things I’ve tried:
A 0% balance transfer card: This helped for a while, but I couldn’t pay off the balance before the promotional period ended, so now I’m stuck with high interest again.
Talking to my credit union: They suggested getting multiple smaller loans to pay off my debt over time, but it would take years and doesn’t seem realistic.
Credit counseling: Haven’t gone down this road yet, but I’m open to suggestions.
If it helps, I’m 28 and working as a waitress, so my income is inconsistent. I currently pay $1,000 in rent, which I split with my girlfriend, and I’m trying to find a professional job soon. I also have $34,000 in student loans (on a $0 payment plan for now) and $20,000 left on my car loan.
Does anyone have advice on the best way to tackle this debt? Are there better loan options or strategies I should consider? Any help is appreciated.
I went with Sofi for a personal loan at 10.99%. My credit score was a bit higher than yours, but if you can get a loan at 15% or lower, it could still help. The key is to stop using credit cards entirely. If you don’t, another loan won’t solve anything.
@Robin
Thanks for the suggestion! I’ll look into Sofi. I haven’t used my cards in months because they’re maxed out, so I’m definitely ready to stop relying on them.
I know loans like OneMain’s aren’t ideal because of the high interest, but I used them for $10,000 in credit card debt, and it worked for me. The set monthly payments mean I’ll be debt-free in a few years. Just make sure to stop using the cards, or you’ll end up in the same hole again. I only keep one card for emergencies now.
@Zora
It’s reassuring to hear from someone who’s had success with them. Thanks for sharing! It’s a tough process, but I’m glad it’s working out for you.
If you’re disciplined, try applying for a zero-interest card like Capital One Quicksilver. They have no annual fees, no transfer fees, and 0% interest for 15 months. Transfer as much as you can to the new card and pay off the rest with a lower-interest loan.
Focus on lowering your credit utilization first. If any of your cards are maxed out, try to get the balances below 50%. It can improve your credit score and make it easier to qualify for better loans. I also suggest setting up automatic transfers to a savings account, even if it’s just $50 per paycheck. Small savings can give you some breathing room when things are tight.
@Reese
Thanks for the tip! I live paycheck to paycheck, so saving even a little feels tough, but I’ll give it a shot. I didn’t realize automatic transfers to savings were an option.
Aza said: @Reese
Thanks for the tip! I live paycheck to paycheck, so saving even a little feels tough, but I’ll give it a shot. I didn’t realize automatic transfers to savings were an option.
It depends on your bank, but most offer it. Even saving $100 can help reduce stress and build good habits. I was in a similar place last year, but cutting expenses and setting up small savings has made a big difference.
A loan at 22% interest isn’t worth it. You’d save very little, and the payments would still be high. Your best bet is to pick up extra work and throw every dollar at the debt using the snowball method. It’s not easy, but it’s doable if you focus.
@Nova
I’ve tried side gigs like Doordash and Rover, but I’m still struggling to make enough. I can’t put anything extra toward my debt right now because I’m barely covering groceries and bills. I was hoping a loan could give me some breathing room, but I see what you mean about the interest rate.
OneMain might be worth considering if it helps lower your payments. But you have to stop using credit altogether, or you’ll just dig a deeper hole. I made the mistake of transferring balances to a 0% card and then kept spending. It’s all about changing your habits.