$25,000 in credit card debt....... OMG!!!!!!!!!?

Question

I have $25k in cc debt.... paying $300 in finance charges alone a month..... how can I pay it off??????

Answer 1

First of all, STOP using your credit card. STOP applying for credit cards and put yourself on a budget. Cut down to the bare minimum until you can get yourself back on track.

A lot of banks will help you budget yourself if you need the help. Or you can consult with a debt reconsolidator.

Answer 2

1) You really first need to figure out why you have 25K in debt. No debt elimination plan will work without some serious, serious personal reflection.
2) Start reading www.simpledollar.com. (Not mine, I just love it and has changed my life.)
3) Pick any of the forementioned plans, smallest card first, lowest interest what works for you and stick to it.

My 2 cents is that you don't need a debt consolidation place, you can do those things on your own. I also am in support of getting interest rates lowered. It will make a huge difference, even if it 1 or 2%.

My husband and I will have paid off 20K in 18 months with vigilance and so will you.

Answer 3

First of all, make yourself a list (or a spreadsheet, if you're technically inclined) of all the cards, how much you owes on them, what the typical minimum payment is, and what the interest rate is.

Add up all the minimum payments. This is the minimum monthly credit card expense.

Check to see if any of the cards have a pretty low percentage usage. For example, if you had a $3k limit on average, are any of the cards under $1,500? If so, pay every last penny he toward the card that has the lowest balance until it's paid off, while you continue to pay the minimum on the other cards.

If there isn't a card close to pay off, he can choose to focus on either the card that has the lowest balance or the one that has the highest interest rate.

If there's some "room" on cards with lower interest rates, it's also not a bad idea to transfer some of the balance from the highest interest card to lower ones, then focus on paying off the now-reduced amount on the high-interest card.

Once one card is paid off, leave it open as an emergency buffer (also known as the broken fridge fund). Later, this will be replaced by a bank account buffer, but if you can get a credit buffer going, it's more important to pay off your debt than to have a lot of money in the bank.

Then choose another card to focus on. (The next low balance or high interest card.) Take the minimum amount that you used to pay on the first card and snowball it into the payment of the second. Wash, rinse, repeat.

Example:
Card 1 - 1,200 (minimum payment: 50)
Card 2 - 1,000 (minimum payment: 40)
Card 3 - 800 (minimum payment: 25)

Once you pay off Card 3, you can then pay 65 per month to card 2.

Don't cancel the cards once you pay them off.

If you owe $30,000/$32,000 that's a 93.75% usage.
If you pay off a $2,000 card it's then $28k/$32k which is 87.5% usage.
However, if you close the paid off card it's now $28k/$30k, which is 93.33% usage.

Keeping the card open but not used makes you look better, because you're not as close to being totally maxed out. (Plus, that's your emergency fund until you get you credit card payments low enough to make a savings account emergency fund.)

In all but the most dire situations, it is possible to pay off debt. This process will take a while, but it'll be worth it!

Answer 4

See those finance charges you have? You have to pay more than that a month to cut out the finance charges to get your payment to go into the principal balance. Don't charge anything else to the card. If you can, pay $500 a month on the card or $125 per week. This will cut down on the finance charges if you pay weekly because most of the balance will not be reflected in the interest cycle. If it is all on one card, there isn't much you can do but pay it. If it is on several cards, pay extra a month on one card at a time.

Answer 5

First, get $1000 in the bank so you don't have to use the credit cards again. You need that $1000 for the emergencies that come up.
Second, cut up the cards and decide not to use them again!
Third, get on a budget (www.daveramsey.com) and STICK to it
Forth, get another job and all that money goes on the debt.
Fifth, how much is your car payment? You may want to sell your car, get a cheap car until you are out of this mess. If you didn't have a car payment you could use that money to pay down the credit cards. (If your car balance can't be paid off in 18 months or less, sell the car, get a cheap car until you are out of debt.)

Work hard and you can get out. We have been using Ramsey's plan for 1 1/2 years and have already paid off $15k in debt.

Answer 6

Most people who are in over their head find the debt snowball to be an effective tool.

First, you've got to find a way to make more money available to debt relief. It doesn't have to be A LOT, but you've got to find more. Some people sell a bunch of things. Other people cut expenses...like going from expanded digital cable down to basic broadcast cable. Still others decide to go out and get another part time job. You've got to find something that will make some additional money available to debt payoff.

I presume you're paying the minimum payment on everything. Keep doing that, except for the SMALLEST debt you have. Take all your additional money and fork it over to the smallest debt, so that you pay more than the minimum. Keep doing that until your smallest debt is completely paid off (it may take months or years!).

Once you've paid it off, roll EVERYTHING you paid towards that smallest debt into the next smallest debt. So if you were paying $125 per month on the small debt, and your minimum payment is $25 per month on the next smallest debt, you should now be paying $150 per month towards that next smallest debt. You'll find it won't take quite as much time to pay off the second smallest debt. Then, roll that over into the third one, etc.

Thats the debt snowball. Then there's the most important thing: Don't accrue any more debt. Put $25 a week in a savings account as your "just in case / emergency" fund. Use THAT when things happen like "the car breaks down". DON'T use your emergency fund for non-emergencies, like "I really need a new couch and they're on sale this month."

Answer 7

Take a deep breath...Relax.. You didn't get in this mess overnight, you won't get out of it overnight.

First.. Cut up those credit cards.. Do not use them anymore. Second... Contact one of those "non-profit" debt programs. They can help lower interest rates, and consolidate the cards into one payment.
Third. Avoid getting into this mess again by limiting yourself to 1 card and only charge what you can pay off each month.

Answer 8

"A debt consolidation program helps to get out of all high interest debts. There are various types of debt consolidation loans.

Home equity loan is one such debt consolidation program where a person can use home to get a loan.

This is a secured loan and the interest rates are low compered to unsecured loans.

Selecting a online debt consolidation is very easy as it allows you to total all your debts into one small payment.


Going for online debt consolidation is a good option, you need to take into account the fee charged by the debt consolidation companies."

Answer 9

You better find a way to pay more than just minimum payments. You will be in debt for the next 30 years, if you do this. You might want to restructure your debt. Talk to a financial counselor about this.

Answer 10

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