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.
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.
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.
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.
@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.