Ask Terry Questions Credit Card Debt Reduction

Credit Card Debt Reduction

By Terry Savage on October 23, 2014 | Credit/Debt

Hello Ms. Savage,

First, I really enjoy your segments on WGN Radio. I have approx. 50K in credit card debt and would like your advise on the best way to eliminate this anchor around my neck. I do own my own home, but currently it is a bit under water and it is almost impossible to obtain a debt consolidation or home equity loan these days. I am employed full time with an annual salary of approx. 65K. Any suggestions would be most welcomed.

Thank you very much,

Terry Says:  Ugh, this is a tough one — because you don’t want to file for bankruptcy and put your home at risk, too.  So, basically there are two ways to deal with this:  spend less or earn more!  I’m not being flip.  Is there any way you could take on a weekend job, just temporarily, to help pay off that debt?    Second possibility:  you didn’t tell me much about your life, but if you don’t have a house full of family, would you consider renting a room to someone you might connect with through your church.  That could help bring in some cash.  For other ideas, don’t hesitate to call the National Foundation for Credit Counseling – 800-388-2227.  They don’t report your conversations to the credit bureau — and if you go in to meet with them, bringing in all your financials, they may find some other ways to help you cut expenses.  You can trust them — and only them!

Here’s the basic formula for paying off credit card debt:  If you double the current minimum monthly payment, and pay that same amount every month, and don’t charge another penny — then your card will be paid off in about 3 years — no matter what the interest rate!  So that’s your goal — to write down the minimum payments on all cards, start paying double on at least one card to get out from under — and then move on to the next card.

That’s really tough, to cut back when you’re cutting it close — so that’s why the emphasis on finding more “income” to give you some breathing room to do this!  Let me know what happens.



a personal
finance question