What is the Best Way for Me to Get Out of Debt?


Dear Steve,

I have about $70,000 credit card debt. I finally got a reliable full-time job and could make about $2500 to $3000 monthly towards it, but the interest rates are killing me.

I’ve never had a late payment, and the only thing bad on my credit report is my debt ratio. I’m in my early 40’s.

How can you help me and what is your suggestion?



Dear Giselle,

It is funny how such a simple question is so complicated.

If your credit score is the most important thing to you, then pay your debt off as fast as possible and in full.

If you pay $2,500 per month at an average of 20 percent interest on your accounts, it will take 39 months to pay off and cost about $95,000, with $25,000 of that being interest.

You could shop for a personal loan or find enough 0 percent balance transfer cards if you want lower interest rates. However, to pay it off at the lower transfer rate, you should expect to pay up to $2,000 in fees, and your monthly payment would be about $6,000 per month to clear your balance before you were hit with regular interest rates.

Applying for balance transfer cards or a personal loan can lower your credit score based on how many credit inquiries you make.

Paying back a big balance can cost you more than a million dollars in lost retirement savings. You should also factor in the future cost of paying off the debt. I want you to make an informed decision. Use my online calculator.

What is the Best Way for Me to Get Out of Debt?

If you made three years of $2,500 a month payments and never put anything more towards your retirement, you’d have about $1,259.400.

Alternatively, if you are eligible for a Chapter 7 bankruptcy, you could legally eliminate all of your debt tax-free in about 90 days and for less than $2,000 in legal fees. In addition, you can rebuild your credit quickly afterward.

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You could settle your debt, but that would require defaulting and leave a negative mark on your credit for seven years. In addition, the forgiven debt might be taxable.

See, what I mean, it can be a complicated decision.

Because of this, I would strongly advise talking to my debt coach friend Damon Day and have a conversation about what your current and future financial goals are and let him craft a customized solution that best fits you.

Talking to a debt relief salesperson can inadvertently cost you millions of future dollars by making the wrong choice. Shocker – the sales commission debt relief salesperson will try to sell you their product seemingly regardless if it is right for you. Many salespeople just don’t know better.

Please come back and comment below and let me know what you decide to do.


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.

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Damon Day - Pro Debt Coach

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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.
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