I have about $12k in credit card debt. My cards are Discover, PNC and Ulta mastercard. I pay a little less than $300 a month in credit card payments. The interest rates are high. My highest minimum credit card payment for one card is about $144. I think the others are $56 and $84. I really want to consolidate the payments and get rid of my credit card debt as fast as possible. I want to buy a home in a year. Rent is $1750 split in two. I make about $3900 a month. I would say that in total will all bills, I pay about $1300 a month. We are also paying for our wedding that will be in January 2027. I just want to give a full picture of my financial situation. Am I drowning? Sinking? Could it be worse?
Smartest and fastest way to get rid of credit card debt?
byu/Honest-Mail9001 inCreditCards
Posted by Honest-Mail9001
12 Comments
This is more of a finance question.
Address your basic personal finance. Increase income, decrease expenses, ideally both. One of the biggest issues I see here is that you have one of the biggest expenses (a wedding) on your plate at this time. I don’t know if that’s something you can put off for a bit in order to address your debt first.
stop using the card(s) with the debt – don’t add more charges that will add to the interest you’re paying from the day you charge them. You need to be paying significantly more than the min payment required, each month to get rid of the debt.
if you can get approved, get a card with a 0% interest promo period for balance transfers, move as much of the debt as you can get approved for there (starting with highest interest rate), charge nothing new to that card, pay the debt off, or as much as you can, before the 0% interest period ends.
If debt is carried by multiple cards, pay the highest interest rate card/debt off first.
in terms of managing overall budget/payments/spend, you’ll probably get better help from a personal finance sub, than from this credit card sub (that is really focused on maximizing credit card bonuses and rewards, for people who do not carry a balance on credit cards)
$3900 per month is not enough pay to navigate life in the USA. I doubt anyone is going to give you $12,000 of credit to transfer all of those cards. Let’s take this in order. Call all 3 numbers on the back of those cards and ask if they will lower the interest. Some will some will not. DO THAT TODAY! Then apply for the Citi Simplicity 3% transfer fee 0% APR card for 21 months. If you get the card then transfer over the highest interest debts first. Then, this is the most important part, you need to stop using these cards and get a higher paying job and or a second and third job! Clearly you do not have enough spending power to keep up with your spending. You should have $10,000-$20,000 in a high yield savings, be maxing out a Roth IRA and investing in a 401K, and be able to pay your credit cards off in full each month. You have to make a ton of money to navigate life, assuming in the US, and to be able to retire someday. Time to do a financial reset!!
r/personalfinance
https://www.reddit.com/r/personalfinance/wiki/commontopics
Check out r/credit too!
The answer is simple, pay more.
The minimum payment is designed to keep you in debt for decades and paying thousands of dollars in interest.
If you can pay $1,000 per month it’ll be gone in about a year.
If you can pay $500 it’ll be gone in about 3 years.
For simplicity list the accounts in order of smallest balance to largest.
Make the minimum on each, put anything extra on the smallest one until it’s paid off. Then take that amount and put it toward the next one until it’s paid off, and so on.
Sounds like you need to consolidate that debt into a single fixed loan to ever have a chance of paying it off. Then reduce spending so you can live and continue paying that consolidation loan. If you cannot do that, you may need to look at bankruptcy because it sounds like you’re just paying interest (and even then just some, not all) and the debt will continue to snowball
Discover is pretty good with personal loans however they wont let you consolidate Discover card debt. The only way around that is to take a higher loan rate and apply for a unsecure personal loan then pay off the cards. You can stretch out the term as long as possible but you need to make frequent payments and try to get it paid off ASAP. Start selling things around the house and any extra you get goes to the loan, not to Amazon, Restaurants or Starbucks.
The main thing is that you need to understand yourself and your spending habits. Why did you accumulate this debt? Did you get socked with an extremely high medical bill or something but you are generally very financially literate and responsible? Or is this consumer debt and mostly a psychological issue around spending?
In the former case, I would recommend paying your debts in order of the highest interest rate first. Pay the minimum on every card. Find the card with the highest interest rate and pay as much as you can to that card on top of the minimum. After you pay a card off, the amount you were paying to that card now gets added to the minimum that you were already paying on the card with the next highest interest rate. Repeat until debt free. Potentially, if your credit allows and if your cash flow is good enough to pay off everything before the end of the promo period, find a 0% intro offer to give you time to do this without interest.
If it is the latter case, I would probably not even consider applying for new credit even though consolidating the debt could save you money. Stop digging yourself deeper. Put the credit cards away. Freeze them into blocks of ice if you have to. Then pay them off in order of either interest rate as above, or, if you know you are the kind of person who needs a couple of easy wins or you’ll give up, pay down the smallest debts first. This is not technically the best way to go about it mathematically, but often with debt the psychological angle is more important to people. As you pay the cards off, I would strongly consider closing most of them. Yes, this will affect your credit history. Your credit history is less important than not drowning in debt.
Based on the fact that your payments are across multiple cards and include a retail card, and given that you don’t even seem to know the exact details of your payments and balances, I’m going to guess that you are in group two. Even though on paper consolidating at no or low interest is the best move and could save you a lot in interest, I would be extremely leery of opening a new card. I have seen a lot of people do this and then it psychologically frees them up to take on even more debt.
We can’t give you the full picture of your financial situation with the information you’ve presented here. When you say you make $3900/month, is that before or after taxes? Does your total figure with all bills include things like grocery and transportation? And do you have an emergency fund? How reliable is your employment? How reliable is the employment of your roommate and/or fiance?
However, given how much money you have after bills, the next question is how did you end up with $12000 in credit card debt in the first place? Where does this missing $2600 a month (plus the spending that got you into debt) go? You need to make a budget so that you know where all of your money is going. You can probably figure out a pretty good picture by going through a few months of credit card statements.
It depends on where you live, what kind of wedding you are looking at, and what kind of home you are looking at, but that goal of paying off your debt, presumably having some emergency savings, paying for (half?) a wedding, *and* having (half?) a down payment for a house within a year does not seem reasonable. If every cent of that $2600/month is real and can be directed toward building an emergency fund of three to six months of expenses and paying off debt, you’ll be just about done with that within that time period, depending on interest rates. There is not enough time left to build a down payment on a house in most places in the US. The wedding depends entirely on you. A courthouse wedding is almost free. Or for a big fancy wedding we could be talking multiple years of saving.
Probably online
You can’t afford a wedding until you get out of debt. Get married in a courthouse. You’re too deep in debt. You don’t need a wedding to be married.
Everyone has already given really good suggestions. I would like to add one more.
If there is a possibility to do your job remotely, just move to Asia or Latam, like a good life with less than half the expenses in the US and pay your debts.
And always pay 100% unless you are in an emergency situation and have no other options. These bankers will take 24-36% interest rate ; this interest rate is higher than the local vendors in Africa/Asia