Back in May 2023, my credit score was a solid 748, and I was doing great with my credit card usage. Had about $5300 in savings and even bought a house around that time.
But then things took a turn. Between buying the house and unexpected expenses like fixing the flooring and dealing with plumbing issues, I ended up maxing out my credit card.
As a single mom and a teacher, money is tight. Fast forward to September 2024, my credit score has dropped to 613, and I’m drowning in $16k worth of credit card debt.
After paying the minimum on my card, I’m barely making ends meet. It’s exhausting and I just want this debt gone. I can’t even get approved for new credit cards now.
Thinking of going back to grad school to improve my GPA and take out more student loans to tackle my credit card debt. My current student loans have a low monthly payment, and with potential loan forgiveness as a teacher, it might be a way out of this mess.
It may sound crazy, but the thought of being stuck in this financial rut for another 20+ years is unbearable. Is this the worst idea ever? I need help, Money Minder!
Best,
Struggling and Hopeful
Response from THE MONEY MINDER:
Hello There,
Hello,
I can understand how overwhelming your current financial situation must be, especially considering the challenges you’ve faced recently. It’s commendable that you’re seeking solutions to tackle your credit card debt and improve your financial stability. Taking on more student loans to pay off your credit card debt might seem like a temporary relief, but it’s important to approach this decision with caution.
While increasing your student loan debt may lower your monthly payments, it’s essential to consider the long-term consequences. Keep in mind that student loans typically have lower interest rates than credit cards, so it might make sense to consolidate your debts through a student loan if the terms are favorable. However, accruing more debt without a solid plan to repay it can lead to further challenges down the road.
As you mentioned, pursuing loan forgiveness as a teacher could be a beneficial option in the future. It’s crucial to weigh the pros and cons of taking on additional student loans to pay off your credit card debt. Consider creating a detailed budget, exploring other debt repayment strategies, and seeking financial counseling to determine the best course of action for your unique circumstances.
Remember, addressing your financial challenges requires careful planning and realistic goals. It’s essential to prioritize your financial well-being and take steps to alleviate your current financial stress. All the best from THE MONEY MINDER as you navigate this journey towards financial stability.
