Ask The Get Out of Debt Experts Retirement Related

I Have Too Much Credit Card Debt to Refinance the Mortgage. – Bob

“Dear Steve,

Was out of work for a while, and took a sizeable pay cut to take a job. Between my wife and I we are about 50K$ in CC debt. We make about 10,900K$ take home a month. Our expenses are about 5980$/month using your form.

We need to refinance our mortgage to get the payments down (never late with the mortgage) but we won’t be able to with this amount of CC debt.

One of my wife’s cards jacked up the rate to 29% and they won’t agree to a plan or a reduced rate. I do have a large 401K that I can borrow against at 4%. I am tempted to do that and cut down to one card each with 3K limits.

I am 50 my wife is 42, I have a very good 401K program at work, 7% with matching dollar for dollar up to the 7%. I have two pensions from earlier jobs, 30 years total service and my wife is a teacher so she has a pension.

What should we do about the 29% CC rate and should we borrow from my 401K?



Dear Bob,

Do not borrow from the 401(k). It’s not cheap money at 4%. It’s 4% plus the rate of return you lose when you take money out. I’ve written a lot about this mistake. Click here to read more.

Have you already talked to a mortgage broker about refinancing or are you assuming you would not qualify? Just having the $50,000 of credit card debt does not disqualify you from a refinance if the numbers add up. If you have not talked to a local mortgage broker, please do.

Outside of that, I’d look at getting a debt consolidation loan through the peer-to-peer lending network, In fact my standing offer is if you do get a loan through LendingClub I will help to fund that loan for you.

The downside to LendingClub is the loan will only be enough to consolidate about half your credit card debt. I don’t know from the information you gave me if that would be beneficial enough to give you the overall break you need.

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It sounds like your issue isn’t cash flow, but interest rates. In that case the solution might be all you need to break this cycle of high interest.

Check it out and report back if you think that will work for you. If not, we’ll have to think about a Plan B.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


  • Too many Americans today are struggling to make minimum payments on their credit cards. It is a growing problem with the state of our economy. I encourage you to join my forum so we can talk about it as a community. There are answers…
    .-= Bill´s last blog ..Question and Answer =-.

  • Thanks, very good advice on mortgage refinancing and tips for not borrow from 401k programs. I think to consolidate the debt is to refinancing a lower interest rate loan to repay higher interest rate loan and start paying debt by cutting down expenses. Budget planning and following budget is also critical to improve financial status.

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