30k in credit card debt… how do I get out of this?

I’ve got $30,000 in credit card debt and need advice on how to start paying it off. I’ve made some poor decisions, and now I’m trying to clear this debt.

It’s my only debt, and I bring home about $3,000 a month. I can put around $1,000 a month towards paying it down. I recently transferred $10,000 to an MBNA card with 0% interest for now, and I should be able to pay it off before the offer ends.

That leaves me with $20,000 on the original card, and right now I’m only making minimum payments on it. The card is with RBC. Should I look into a loan consolidation or maybe a personal loan to get a lower interest rate? Or is there a way I could talk to someone about lowering the interest on my current card? Any help would be great.

You should call the bank and be upfront about your situation. Just say something like, “I’m really struggling and need help to avoid defaulting. Is there any way you could lower my interest rate for now?”

Most lenders want you to pay, so they’ll try to work with you. When I did this with Canadian Tire, they gave me 0% interest for six months, and that helped a lot. It’s worth a shot.

@Blair
Great job for getting out of debt. That’s really impressive!

@Blair
Doesn’t asking for interest relief affect your credit score?

Why not focus on paying off the card that’s charging interest and just make the minimum payments on the 0% transfer for now? When the offer ends, they’ll start charging you interest on whatever balance is left.

What’s the minimum payment on the $20k card?

@Amory
I’m paying the minimum on the 0% transfer, and the minimum payment on the $20k card is $400, but most of that goes towards interest.

Uma said:
@Amory
I’m paying the minimum on the 0% transfer, and the minimum payment on the $20k card is $400, but most of that goes towards interest.

CIBC often offers balance transfers. I have $20,000 on my MBNA card, and I really like it for the low interest rates.

$30,000 is a lot to pay off with $3,000 a month, but it’s possible. Here’s what you need to do:

  1. Make more money if you can.
  2. Sell anything you don’t really need.
  3. Cut back on your spending wherever possible.

You’ll want to throw as much cash at this debt as possible, maybe $2,000 a month. Avoid taking out new loans—focus on paying this down.

@Morgan
Completely agree. If you have to eat cheap meals and live simply, do it. Just don’t ever get back into this much debt again.

Indigo said:
@Morgan
Completely agree. If you have to eat cheap meals and live simply, do it. Just don’t ever get back into this much debt again.

This is the best advice so far.

I’ve read through the responses here, and I think you can handle this without too much difficulty. You’ve got some cash flow, so I’d suggest looking into a line of credit (LOC) and using that to pay off the credit card. Then, put all your payments toward the LOC. Look up Christy’s videos on YouTube—her channel VANNTASTIC has great tips for managing debt.

@Patton
But if they’ve already racked up $30k in debt, is it really a good idea to take on more debt (LOC)? That could just make things worse.

If you’re not going to need credit in the next few years, you could consider a consumer proposal. You wouldn’t be able to use credit cards for a few years, but it could help you reset.

Try talking to your bank about getting a loan to consolidate the debt. Depending on your credit and other factors, you might be able to get a better interest rate than what you’re paying on the credit card.

@Fay
No, don’t go the consolidation route. Focus on paying this off as quickly as possible.

Morgan said:
@Fay
No, don’t go the consolidation route. Focus on paying this off as quickly as possible.

I get what you’re saying, but with only $3k a month, it’s going to take a long time to pay it all off.

Morgan said:
@Fay
No, don’t go the consolidation route. Focus on paying this off as quickly as possible.

You can pay off a consolidation loan the same way. People talk about not taking out more debt, but it really depends on the situation.

@Haru
I was in a budgeting forum and they were all against credit cards, but I make about $1,500 a year in cashback, so I don’t get why I should avoid them.

Shannon said:
@Haru
I was in a budgeting forum and they were all against credit cards, but I make about $1,500 a year in cashback, so I don’t get why I should avoid them.

Exactly. Some of the advice is solid, but it doesn’t apply to everyone in every situation.

Morgan said:
@Fay
No, don’t go the consolidation route. Focus on paying this off as quickly as possible.

A consolidation loan will take the $30k debt down to zero, so how is that not paying it off? Plus, you can make extra payments to reduce the principal faster. It’s a smart way to manage your cash flow while tackling the debt.