Hi Money Minder,
I’ve got around 11k in credit card debt with an average APR of nearly 30%. I went a little crazy with retail therapy when I was feeling down and now I’m about to graduate from college. I’m current on all my accounts, but I really don’t want to pay the full balance if I don’t have to. My annual income is 40k, and I can put almost 90% of that towards the debt, but it’s still a huge chunk of my paycheck every month.
I tried to get a personal loan from my credit union for debt consolidation, but they turned me down because of my credit history. I’ve also reached out to some of my credit card companies, but they’re not willing to work with me since I’ve been making all my payments on time. Should I consider skipping a payment or two to see if that opens the door for settlements?
Any advice you can offer would be greatly appreciated. Thank you!
Best,
Debt-Burdened Grad
Response from THE MONEY MINDER:
Hello There,
I understand the overwhelming situation you’re in with your credit card debt, the high APR, and the rejection for a consolidation loan. It’s commendable that you’re willing to dedicate a significant portion of your income towards paying off your debt. Skipping payments to negotiate settlements can have consequences on your credit score and may not always guarantee favorable outcomes.
Instead, I recommend reaching out to a reputable credit counseling agency. They can provide guidance on creating a realistic budget, negotiating with your creditors for lower interest rates, and potentially setting up a debt management plan. This can help you pay off your debt in a structured way without damaging your credit further.
Another option could be exploring a balance transfer to a credit card with a lower interest rate, although this might be challenging given your current credit history. Additionally, consider looking for ways to increase your income through part-time work or side hustles to speed up the debt repayment process.
Remember, tackling this debt is a marathon, not a sprint. Stay disciplined with your budget, prioritize your debt payments, and seek support from financial professionals to navigate this challenging situation. You’ve taken the first step by seeking advice, and with perseverance, you can overcome this debt burden. Best of luck on your journey to financial freedom.
Farewell from THE MONEY MINDER
