Hi Money Minder,
So, for the past 8 years, my credit score has been pretty awesome, sitting comfortably at 752. But, here’s the kicker – I have a Discover card with a $7k balance that’s piling up interest faster than I can chip away at it.
A couple of years back, I got the boot from a job I loved and trusted for life, out of the blue. To make matters worse, they messed up my severance pay, leaving me high and dry for 6 months. I spiraled into a deep depression and couldn’t get out of bed for half a year. I leaned on my credit card to cover bills, thinking I’d pay it off once I found a new gig. Fast forward 8 months, I landed a job, but it pays peanuts compared to my old one. I can only scrape together $250 a month for the credit card, and the $100-150 interest hits me hard.
Before the layoff, I never carried a balance. I used my credit card for everything, reaping the cash back rewards. With this new job, I can barely keep my head above water. I also have a $340/mo car payment, but luckily locked in 0% interest for 7 years with my good credit, leaving $11k on the loan.
Between bills, groceries, car payment, and credit card, I’m left with a measly $10-20 at the end of each month. Been living like this for a year, and it’s tough. I make $15/hr and just recently snagged full-time hours. Desperately seeking better pay, but it’s slim pickings in my rural area.
I’m reaching out for advice on tackling this credit card mess. I hate the debt looming over me, siphoning all my income each month. I can’t even remember the last time I treated myself to something simple, like a $5 item.
Would a balance transfer with 0% interest for a period be a smart move? Never really delved into them, but figured you’d be the go-to for guidance.
Thanks for reading this. Any suggestions are greatly appreciated.
Sincerely,
Seeking Relief
Response from THE MONEY MINDER:
Hello There,
I am truly sorry to hear about the challenges you have been facing with your credit card debt, especially after experiencing a layoff and the financial difficulties that followed. It sounds like you have been doing your best to manage your finances with the resources available to you, and that is commendable.
Given your current situation, it might be worth considering a balance transfer to a credit card with a 0% introductory APR offer. This could potentially help you save on interest charges for a set period of time, allowing you to focus on paying down the principal balance. However, it’s essential to carefully read the terms and conditions of any balance transfer offer, including any transfer fees and the length of the introductory period.
In addition to exploring a balance transfer, it might be beneficial to create a detailed budget that outlines your income and expenses. This can help you identify areas where you may be able to cut back on spending and allocate more towards your credit card payments. Prioritizing your debts based on interest rates can also be a strategic approach to reduce your overall debt burden.
Considering your limited disposable income, finding ways to increase your earnings or reduce expenses could be key to improving your financial situation. This could include seeking additional part-time work, exploring opportunities for career advancement, or finding ways to decrease your monthly expenses.
Remember that managing debt is a journey, and progress may take time. Stay focused on your financial goals and continue to seek support and advice when needed. You are taking positive steps by seeking guidance in addressing your credit card debt, and I believe that with determination and a practical approach, you can work towards financial stability.
Best wishes on your journey to financial well-being.
Farewell from THE MONEY MINDER.
