High Interest Rates Make Credit Card Debt Inescapable

Open and overdrawn. Would It be worth paying off then just closing it?

“Hey dude. I don’t have much advice, but wanted to say keep grinding. That’s a lot to take on so props to you.”

“Sure but try to divide and conquer. Each member of the family has their role in this. Share all the burden. Think about what I said and try all methods that seem plausible. You have 4 members in the family who can each share a bit to get the funds needed. Truth is I’m quite hopeful of your younger siblings at this. They might just surprise you in ways you didn’t expect. Your job is to delegate roles for each member and to continue with what you do. Selling pop and bottled water might seem like u”

“I can, but the loans are offering me in rates of like 10%. I have a high credit score and I don't want to have 15k in debt sitting at 10% for the next year i'm in school and not able to start paying as it seems like unnecessary interest when I could get no interest added by doing the credit card”

“I edited my post with more info about my current financial situation, does that clarify? What do you mean "especially if you don't have much in the way of other revolving credit"?”

Pay them off, yes. Cut them up, never.

“Take the savings and pay off all the credit cards today and build the savings back up. 17% is an emergency. If a real emergency comes up, you can use your credit cards that now have a 0 balance”

“I would be throwing all my money at the CC debt. It doesn’t make sense to put money in to a 3-4% account if you’re paying 17% on your debt”

“Pay the credit cards. You don’t have disposable income, you have 18k of high interest debt.”

“How much in your savings? If it has 3-6 months of your income, don't put a single dime more into savings and send it all to your debt. Barring an emergency, don't let your savings become $0.”

“Also, one thing to keep in mind on a debt settlement, Uncle Sam will classify the delta as earned income, so that 150000 just became taxable income. If you’re a high earner, that is just going to pile more onto your irs debt. Good luck”

“I'm 28 years old with a savings account of a whopping $0. I am currently focused on paying off my debt. I'll have my last two credit cards paid off within the next two months. Now that I'm thinking more about my financial future, I want to prepare for retirement by opening a Roth IRA. Should I prioritize building an emergency fund before contributing to a Roth IRA? If so, how much should I save first before opening and funding a Roth IRA? submitted by /u/Exact-Sheepherder”

“I’m about to consolidate all my debt into one loan and pay it off within three years. It’s a pretty hefty loan but it such a relief to be able to consolidate everything into one. I’m not the greatest budgeter, so I wanted to ask you guys: What are your first steps to saving money and habits to continue to be savvy with your money? Any apps you use, or money hacks, whatever you guys can think of, I’m all for it. submitted by /u/lmarquez808 [link] [comments]”

Community credit line

“Hello! - need help. I applied for a job at a financial institution and desperately want the job. The problem is Im $16K in CC debt and have a personal loan for $5K. Should I disclose this BEFORE they request a credit check? after? or dont bring it up at all? submitted by /u/Ok_Effective_8055 [link] [comments]”

“I'm so sorry about that, hope you'll be able to sort that out soon. For a 5% apr, it's right on the fence, but I'll probably still try to pay it down so it frees you up (both financially & emotionally).”

“My spouse has a lot of difficulty with spending responsibly. We've gotten to the point where I give them an "allowance" twice a week for their spending (I take care of all bills and most of the necessary spending for our family.) I don't really like having to keep this level of control, but after multiple instances of running up over $10k in debt for non-essentials I haven't felt like I have much of a choice. I like to have them have access to a credit card -- better fraud”

“Read the following. https://www.reddit.com/r/personalfinance/wiki/commontopics/”

Times are weird is an understatement, sadly. I appreciate the sound advice, thank you!

“Settled an account of 2750 for 1700. Most of my savings from the past year. Haven't been taking on more debt. There's 2 more accounts of 600 and 1550 I've been making the mins on as well (started as 1k and 5k). For me, this is a personal win. Hoping to pay off the 1550 off next. Dread wtf I'm supposed to do about a 7k account. Super stressed. Just wanted to share. submitted by /u/CurlyAir [link] [comments]”

“I am going into school for my masters with a career median salary of ~$80k. I should be able to amortize my loans somewhat comfortably, however, I don’t want nearly $1000 in monthly debt payments to hang over my head for 10 years. I’m wondering if anyone can share their experience with being frugal during the first couple of years after graduating? While I love to travel and all, I’m considering living with roommates or my parents, not traveling, and cutting back heavily on expenses to try and l”

“You’ve gotten a lot of good advice on trying to manage/negotiate the debt and I would start there. You say you don’t want to buy a house or a car, but your perspective on everything may change in an instant by factors you have no idea may happen. You may get a job opportunity that you never thought you’d want, you may meet a life partner that you can’t live without, you may have a tragedy/disaster that you’ve never even considered (hopefully not!). My point is there are so many unknowns for some”

“That can work, but you really need to commit to paying it off on time. If you leave much of a balance exposed to a high regular interest rate, it will turn into a bad move. If possible, put off the car purchase or get a cheap used car.”

“What would be smarter? Paying off debt or focusing on savings? Details inside Hi, let's say you have $5,000 total saved up but you have about $3,000 in debt, which is obviously affecting your credit score. You also have a goal to keep saving consistently to reach a high amount of savings, but you also care about a high credit score. So would it be smarter to slowly and gradually pay off the 3k in debt like monthly, or would it be smarter to use 3k of that 5k you have saved up to completely p”

Thank you, yes they have lowered my credit limits

Get your AI robot ass outta here

“I currently have the following debts: $1,800 mortgage payment (228k loan balance) $700 auto ($36k loan, $12k upside down) $200 credit card ($6,000 balance maxed) $113 credit card ($3800 balance maxed) Recently lost a significant portion of my income (part of the reason for the card balances). I could really use some resources on getting out of this hole. I’m currently seriously looking at letting the car go and finding a cheap beater to free up some cash flow to start attacking other debts. I ha”

“As the title reads I have a significant amount of debt for my age unfortunately. Car loans, some CC debt but thankfully no student loans. I’m dying to start investing but boglehead said there’s no point and the first step is to clear all debt. This may sound really stupid, but has anyone used investments to pay off some debt? I would assume paying your debt and investing should never be one and the same obviously because you get taxed on your earnings, but has anyone done this on a small scale?”

“Hello I am looking for advice on how to pay down my debt beyond budgeting and cutting back on extra goods and services. I am so close to not paying tederal faxes anymore as I don't agree with how they are spent. Please take that into consideration! I make $50/hr. 40 hr weeks normally I owe: 35k in student loans that I will likely defer on 11k on a car I don't like 32k in cc with high interest rate 8k on personal loan I pay monthly: 800 in rent 300 in utilities 200 in gas 300 in groceries”

“I would prioritize the credit card debt, then build up a six month emergency fund, and then start maxing out your available retirement accounts. Is your net income about $10k per month? I would try to live on about $6k of that and plow the other $4k into credit card debt repayment. You could be done paying off your credit card debt in about a year, assuming you can direct $4k per month to debt repayment. If you then direct that $4k per month into your emergency fund, you'll have a six month”

“All you need to do to be the most mathematically efficient is to pay the highest APR debt first. (while avoiding late fees on everything).”

“Agreed that it’s not that simple as just not paying them back. But I want to note that you weren’t in the same boat as OP. OP’s parents lied to them about how much they took out and even took out extra and put the extra money in their dad’s investment account. So their parents have enriched themselves off the OP’s loans and that should be taken into account.”

“Remember if you don’t have the 0% APR card paid off, it will charge you the full years interest at once.”

“Because, "We'll take care of it," usually doesn't mean, "We'll saddle you with a ton of debt without at least discussing it with you first." And they're also technically right - OP is not legally responsible, and there's nothing their parents can do if they decide not to pay. Whether or not that's an immoral thing to do is an entirely different question. You can tell OP is feeling a bit betrayed, a bit lied to, and a bit overwhelmed that they're &q”

“Long story short - parents told me they'd take care of finances for college, and I was told the federal loans they took out for me wouldn't accrue interest until after graduation. Today I asked to see my account (as I was expecting roughly 60k) and saw that they had taken Parent Plus loans and they've been accruing interest roughly the past 4 years. We had even overborrowed at some point and placed the extra in my fathers money market account through our bank (roughly 2.5% return eac”

“I’m in a pickle. Divorce/litigation fees are bleeding me dry. I’m a single mom, in school, working as much as I can yet I have -$350 in my checking account and I don’t get paid until next week. My bank is about to start overdraft charging me out the wazoo. Should I get a personal loan to tide me over? I’m stressed tf out so any advice is appreciated. submitted by /u/0ldsoul_ [link] [comments]”

“Here are my current monthly obligations: $500 – Apple Card (credit limit is maxed out). Already l15 days late on June's payment $500 + $130 – Upstart loan (I also maxed out their line of credit, which was around $10,000) $150 – Robinhood monthly payment (credit limit is maxed out) $2,000 – Monthly school tuition My current credit scre is 615. I've been unemployed for more than a year. However, I have accepted a job offer with an annual salary of $170,000, but due to the company's hir”

“I just turned 21 and i have a part time job that only gives me 3-4 hours and pays me 15$ an hour. But I owe alot of money, 19,314 and its a build of credit card debt, school, and my car loans, i'm planning to get a 2nd job but at this point I was wondering if I should just get a loan and at least get rid of the credit card debt. My credit score is 708 and i've had my card for two years. credit card, 4,500 car, 14,000 school, 814 submitted by /u/Seki_ooc [link] [comments”

Got nothing to lose by asking.

“That's the first catch. The real insidious part is that some of these servi ces will offer payment plans that do not pay the loan off in time. As in you make the payment they ask for every month, then still owe some small amount for one more pay period..and then like you say also have to pay the backdated interest on the full purchase.”

“My jaw dropped when I saw how much you’re making vs what you’re paying on debt. There’s a book by Dave Ramsey called total money makeover that will give you done inspiration cuz those numbers aren’t adding up”

“I would say you are on the right track with keeping 1k or maybe a little more as emergency savings, and paying your debt off with whatever you can, but I would add trying to refinance the debt somehow into lower interest. Personal loan, balance transfer to a card with an introductory rate (make sure you pay it all off within the time or they will hit you with back interest) I used introductory no interest cards to help when I was paying cc debt down and it was pretty helpful but you need to be a”

“As other comments. Risk it is too much. Gig jobs are not confirmed steady income, credit needs work. Otherwise you are looking at predatory interest rates. All the best”

“Do you have bills that can't be paid by credit card (usually rent)? That's pretty much the only reason not to use cash to pay down high-interest debt. I think you would want at least a few months' rent in cash savings if so. It's likely you may be able to refinance some of your CC debt, especially if you pay some of it off to get your debt to income ratio down. If you have missed payments, try contacting your lenders to request hardship payment plans. If you've never missed p”

“I have about 13k in cc debt with 25% interest. I only make about 30k a year, but my actual living expenses are not very high (I think I can get them to 1,000 a month). I thought I was going to need to pay for a medical procedure out of pocket, so for the last year I’ve been paying the minimum on my debt in order to prioritize savings, and I’ve managed to save about 5k. I recently learned I don’t actually need to get surgery right now, and I want to go back to paying off my cards as quickly as po”

“Time. You can’t speed up time. People most often have low scores because of late payments, missed payments, and debts that get sent to collections, that sort of thing. Those get reported to the credit bureaus, and they stay on your credit record for something like 7 years. Taking out a bunch of small loans doesn’t shorten that 7-year period.”

“Ok I get it now. Personal loan is an option (horrible rate) but maybe pay down aggressively. Or ask parents.”

“Best app to pay off debt? I see changes, Dave Ramsey app, rocket monkey, any recommendations? submitted by /u/Maribwana [link] [comments]”

“EDIT: I was fully supporting my mother and adult brother paying full utilities, and themselves for over 6 months and NOW I owe about $8,000 total on 4 credit cards. They all start at 27% to 29% APR. I make about $2,800 a month after taxes. My car loan is $261 a month, insurance about $370 a month, a current personal loan from last year $133 a month, about $400 on essentials like groceries, and *NOW I told my family I can only pitch in about $200 on utilities etc. My family of all adults expect m”

“Don't touch your 401(k) because it's totally protected. It is also unlikely you could lose your house or car over this.”

“Anyone telling you not to pay off the debt— especially those rates —are doing you a disservice. . I mean, if you had a 2% interest rate maybe. Get those debts paid. Even if you have very limited savings, you will feel so free getting those debts paid.”

“Pick a bank that has bill pay and will write your checks for you. I have not had personal checks for over 10 years, because my bank allowed me to set up payees like car loans, mortgages, utilities, credit card companies, and even individuals. When I get a bill, I would go on the bank site, pick the payee I needed to send money to, fill out the amount, and when it needed to be paid by. The bank took care of the rest. Sometimes the money would be sent electronically (credit cards, some utilities,”

“I would recommend you live at home with your parents, as long as you can, till you can pay off your debt. Long term, you are going to want to buy a house, I assume, and with the amount of CC debt and car payments you are making, i see that being a struggle, with rent on top of it. Assuming your parents give you space, and dont interfere, ie making living there unbearable....i would stay home. And figure out why you have so much CC debt. Take what would be your new rent, and put 2/3rds of it down”

“Stay with parents as long as possible. You are in debt. Student loan debt is lower %”

“folks here can get you started and still check out what they say (for accuracy, level of help in the advice). There R free services for financial health, awareness. Also costly ones (that CAN be of benefit), Go slow BUT GO! as U have the math of compounding interest those of us ‘older’ do not. "What U dont manage, manages U” weather on the sports field, business, home front or own individual life. Ur wife’n U are a team in so many ways, here is just another aspect. Wrk that to benefit altho”

“Husband (24M) and I (25F) have been married 2 years, all joint finances. We had a bit of a rough start financially but have managed to get $10k in a high yield emergency savings account. We have approximately $32k in debt (auto loan, 9.99% interest and student loans, 2-4.5% interest). We have credit cards but pay them off every month, mostly for gas just to help build credit. We just moved/changed jobs and bring in about $80k together ($10-20k increase). I also just got my first 401k and with ma”

“This issue isn’t your credit score, it’s the fact that you’re paying 27%. If you stay invested you’re basically gambling that your investments will go up more than the guaranteed 27% loss per month. That absolutely is not going to happen in the long run, and probably not the short run either. This is a habit that will eat you alive.”

“I appreciate the input. I don’t really have anyone to talk to about this stuff”

“This is the worst lender! I've had a CareCredit account for a couple of years. It had a $12,000 limit. I've used it a few times and paid the balance. Never late. Never less. And never more than 10% of the credit limit. I have my payments automatically withdrawn, but I always pay a little extra, too. Last night, I logged in and paid an extra $50 on the $600 balance. I always check to make sure my autopay processed correctly and to make sure no unexpected charges have applied. While I'”