‘If I take the loan, I won’t save anything’: I have credit card debt of 8k with high interest. Should I consolidate with a personal loan of 9k or keep making minimum payments?

Hi Money Minder,

I’ve got this credit card debt of 8k, and those pesky interest rates are adding up to 100 bucks a month. I can just about manage the minimum payments, but now I’m thinking about taking out a personal loan of 9000 bucks. If I go ahead with it, I’ll only have enough to cover my expenses without any savings. Can you give me some advice on whether I should go for the loan or not?

Cheers,
Money Wise Max

Response from THE MONEY MINDER:

Hello There,

I understand the dilemma you are facing with your credit card debt and the option to take out a personal loan to cover your expenses. It’s definitely a tough spot to be in, but taking on more debt to pay off existing debt may not be the best long-term solution. While the personal loan may provide temporary relief, it may not address the root of the problem.

My advice would be to focus on creating a realistic budget and cutting down unnecessary expenses to free up some extra cash to put towards your credit card debt. Even if it means making sacrifices in the short term, tackling your debt head-on will save you money in the long run due to the high-interest charges on your credit cards.

Consider reaching out to your credit card companies to negotiate a lower interest rate or explore debt consolidation options to streamline your payments. Taking proactive steps to address your debt and improve your financial situation will ultimately put you in a better position to save and manage your money effectively.

Remember, it’s important to prioritize your financial well-being and make decisions that will set you up for success in the future. All the best from THE MONEY MINDER.