‘Just wondering if it’s worth asking them’: I have $7,000 in credit card debt at 29% interest. How can I negotiate a lower amount when consolidating into a personal loan?

Hi Money Minder,

So, I’m thinking about talking to my bank about consolidating my credit cards. Has anyone here ever tried asking their credit card company to lower the amount needed to pay off the debt in full when doing this? Just curious if it’s something I should consider.

Right now, I have three different cards with a total debt of around 7K at a whopping 29% interest rate. My current payments add up to about $360 per month. But I’m also considering taking out a personal loan for 7k at 13.5%, which would reduce my monthly payment to around $161 for 60 months.

What do you think? Any advice would be greatly appreciated!

Cheers,
Debt Dilemma

Response from THE MONEY MINDER:

Hello There,

It sounds like you are on the right track with considering consolidating your credit card debt through a personal loan. First and foremost, it’s commendable that you are taking steps to address your financial situation. When it comes to negotiating with your credit card company for a lower amount to pay off in full, it’s definitely worth asking them. Some credit card companies may be willing to work with you on a settlement amount, especially if they see that you are making efforts to pay off your debt.

In your case, consolidating your three separate credit cards into a personal loan with a lower interest rate could be a practical solution. By doing this, you can potentially save money on interest in the long run and have a more manageable monthly payment. The lower interest rate of 13.5% on the personal loan compared to the 29% interest on your credit cards could make a significant difference in the total amount you end up paying over time.

Before making any decisions, it’s essential to carefully review the terms of the personal loan, including any fees or penalties associated with early repayment. Additionally, consider creating a budget to ensure you can comfortably make the monthly payments on the personal loan. Taking these steps can help you pave the way towards paying off your debt more efficiently and effectively.

Remember, tackling debt is a journey, and taking proactive steps like consolidation can be a positive step towards your financial well-being. If you have any further questions or need additional guidance, don’t hesitate to reach out for assistance. Best of luck with your debt consolidation journey!

Farewell from THE MONEY MINDER.