Hi Money Minder!
So, I’ve got this 10K in CC Debt situation going on, and I need some help figuring out the best way to handle it. Here’s the lowdown on my financial situation:
My credit score is around 661. I bring in about 80K before taxes, which shakes out to around 58K after Uncle Sam takes his cut.
- My Truck is valued at around $70k, with $61,700 left to pay off at $1163 a month.
- My Motorcycle is worth about $10k, with $9536 remaining to pay at $255 a month.
- I pay about $1000 a month for rent and utilities, even though I should be splitting it evenly with my girlfriend.
- My credit card debt totals $10,123, with 101% usage of my credit.
- I’ve got a car in the garage worth around $12k-$14k, completely paid off.
- I’ve got $100 in a local credit union and some money saved up in my 401k.
- I shell out $407 a month for insurance.
- I’ve also got a $250 monthly student loan payment.
Oh, and I’m 25, have a degree in Civil Engineering, and love cars and bikes, but I’ve been a bit reckless with my money. I’ve got big plans to own a house in the next few years, but this debt is holding me back.
How did I get here? A dog with health issues, a couple of cross-country moves, and a habit of maxing out my cards to cover expenses.
Here are my options:
- Debt relief programs sound scary. Tanking my credit for two years doesn’t feel like the best move.
- Selling my Subaru to pay off debt is an option, but it messes with my house down payment plans.
- A consolidation loan would simplify things, but the interest rates aren’t great.
- Considering opening more credit lines to improve my credit usage ratio, then looking into a consolidation loan.
- Maybe my credit union can help with consolidation options or a credit score building plan.
- Wondering if a financial advisor would be worth it.
- Personal loans to pay off the credit cards could be an option, but I’m not sure if I’d qualify.
- Slowly chipping away at the debt every month feels like a never-ending cycle.
- Balance transfer credit cards might be a stretch for me.
- Any other ideas to dig myself out of this hole?
Feel free to give me a reality check. I may be young and dumb, but I’m still hopeful!
Farewell from the dude with big dreams.
Response from THE MONEY MINDER:
Hello There,
Hello there! I can see that you are facing a challenging situation with your $10k credit card debt. It’s evident that you’ve put a lot of thought into your financial situation, and it’s essential to address it promptly to secure a stable future. Given your income and expenses, there are several practical options you can consider.
Firstly, selling your Subaru Outback to pay off your credit card debt could be a viable solution, although it may impact your home down payment plans. However, eliminating high-interest debt should be a priority.
Secondly, reaching out to your local credit union to explore credit consolidation options sounds like a smart move, especially if they offer a structured plan to help improve your credit score.
Additionally, consider seeking a consolidation loan from a reputable lender, or exploring the possibility of opening new credit lines to lower your credit utilization ratio before applying for a loan.
A financial advisor could provide valuable insights and guidance on managing your debt effectively and creating a feasible repayment plan tailored to your financial goals.
Lastly, continue exploring other options like seeking a personal loan, balance transfer credit cards, or other creative solutions that may align with your financial situation.
Remember, addressing your credit card debt now will pave the way for achieving your long-term goals, such as homeownership. Stay proactive, stay positive, and take control of your finances. You’ve got this!
Best of luck on your journey to financial stability!
Farewell from THE MONEY MINDER.
