Ask Terry Questions Credit card debt –We are buried!

Credit card debt –We are buried!

By Terry Savage on July 29, 2019 | Credit/Debt

My husband and I have accumulated around $20,000 of credit card debt combined over the past 10 years. What is the best way to tackle the debt with low APR? We’ve already used some of a home equity line to pay some debt. Do we go for a personal loan? ( my credit score has dropped to the 640’s. My husbands credit score is even worse.). Try to extend our home equity line? Transfer to a 0% apr card? We have already stopped using the credit cards. Combined, we are currently paying around $800 a month on credit card payments, but I don’t think we’re making a dent in the debt! I’m a school teacher and my husband is a stay at home dad to our 2 kids. We would really like to take care of this debt and move on with better financial decisions. Your advice is appreciated!

Terry Says

OK, this is tough advice — and if you don’t believe it from me, I’ll say upfront that you can contact the National Foundation for Credit Counseling at 800-388-2227.  They are a non-profit and you can trust them.  And they’ll say the same  thing.

You are absolutely correct that you are not making a dent in your debt.  That’s how the “game” is played.  The interest charges overwhelm the cost of the initial purchases!  So here is the formula for getting out of credit card debt in less than 3 years.  But you have to follow it and not cheat — even once!

Take this month’s minimum monthly payment and DOUBLE it!  Write down that amount and pay the exact same amount every month. (Not double the NEW minimum!)  That card will be paid off in less than two years — if you don’t charge another penny on it!

Try it with TWO cards at once.  Yes, that requires more money.  And while I admire a stay-at-home Dad (or Mom) you need to bring in more money!  So Dad needs to get a weekend job — waiter, Uber driver, anything — to make that extra money to pay extra on your cards.

That is the ONLY way you’ll get out of debt in this lifetime.  And after you finish your credit cards, start on your home equity loan.  It is going to bite you  — either when it comes due in one big balloon since you’re likely paying interest-only, or if rates ever rise.  You can do this all by living frugally (which you likely already are) and by BRINGING IN MORE MONEY!  I’m not being frivolous here — I know it’s tough, but consider every extra hour in the week as an earning opportunity!  You CAN do it!




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