I Live in NYC And have Great Anxiety About My Debt.

“Dear Steve,

In the scheme of things, my situation is probably not as bad as others but it still calls me great anxiety. I’m 25 years old with a 50k income and 10,000 debt on one credit card. I live in NYC and have an expensive rent. I was hoping you could help me figure out the best way to start paying off and fix my credit. Other blogs have mentioned transferring my debt to another card; not sure how this would fix the problem and I don’t have good credit to open another card.

Any advice is welcome.

Jessica”

Dear Jessica,

I can fully appreciate how this situation makes you anxious and filled with stress. That’s a normal reaction to a situation that appears dire and without a solution. Rest assured, there is a solution to this so let’s embark on that journey and help eliminate your anxiousness.

The amount of debt is not what makes a situation extreme, it’s the emotional pressure it exerts on the individual. I’ve seen people with $300,000 in debt not worry and people with $3,000 of debt be a complete emotional wreck.

Transferring the balance from one card to another can be a way to reduce a balance if you can continue making the same level of payments you are now or pay the card off by the time the introductory rate expires.

But I’d say in your situation I suspect that would not work, especially if you are adding to the balances each month. In that case you would be using the cards to help make ends meet and a lower interest rate isn’t the key to breaking this cycle.

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You mentioned your expenses, at least in rent, are somewhat high. So let’s take a look at the most common way to alter the debt equation, we either need to lower expenses, increase income, or a combination of the both. But again, I suspect, if that had been possible you would have already done that.

Let’s start with the basics.

I’d suggest you first read How to Get Out of Debt. The Honest and Unvarnished Truth and The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. They will give you a great overview of what we need to deal with to get you moving in the right direction.

Then use the free How to Get Out of Debt Calculator to review your options.

After that, come back here and comment about what seems to make the most sense and let’s discuss that.

Does that sound like a reasonable approach?