I’m So Afraid of My Debt. – Jes

“Dear Steve,

I really need your advice, I just came from your website and just reading about debt makes me sick to my stomach.

I am in debt with credit cards about 15,000. I had great credit before hand hence why I could get the cards at a young age ( at 20/21) but now I got returned payments and my available credit is way over my limit !

On my $5500 card I owe 14,000 . I was wondering if this affects my credit score at all? I am so worried I will have bad credit and not be able to get a loan in a house when I am older i am so embarrassed.

I feel like I will never be able to get out of this I need your advice please and thank you!


Dear Jes,

First, let me assure you that the financial future can be very bright for you. The fear and anxiety you are feeling is normal but that does not make it real. Rather than worry about what might be, we need to worry about developing a good plan to deal with the current situation.

From what you shared it seems you were extended credit young and have now found it difficult to manage. This difficulty in missed payments has probably resulted in your credit limits being reduced and it has hurt your credit, for now.

You have to keep in mind that just because a creditor extended you credit did not mean you could afford it. It just meant they were willing to take the risk. Ultimately only you can determine if any offer of credit is affordable. And while you are learning lessons, here is another one.

worryCredit offers are absolute, you have to make at least a certain minimum payment each month no matter what. Life is not absolute and can change on a moments notice. You can lose you job, get in an accident, develop some medical problem, etc.

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As you move forward and resolve this situation you absolutely must focus on building your emergency fund in a boring old savings account and start to save now for retirement.

The emergency fund will protect you in months with financial surprises. You can dip in and make a payment, repair the car, or pay an unexpected bill. If you start saving for retirement now, by the time you can’t work anymore you will have enough saved to live safely. If you don’t start soon there is no replacement for the lost time except for higher monthly savings later.

There are two basic ways to deal with the debt.

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

1. Pay your way out by making diligent on-time payments. Your good payment history will help to improve your credit as you pay down your debt. A really good way to get some structure in your repayment plan is to use the free service from ReadyForZero.com.

You can find extra money in your month by increasing your income and/or reducing your expenses.

2. If the debt is too much for you to afford then we need to look at some sort of intervention. You can use the Get Out of Debt Calculator to look at your options.

I can assure you, your financial life is not over. By dealing with the debt you will be able to rebuild your credit and get a house one day.

There is no need to be embarrassed or ashamed. The vast majority of us have faced money problems or troubles at one point or another in our lives. It happens, it’s not the end of the world, there is hope, and you will emerge better for it.

Please post your responses and follow-up messages to me on this in the comments section below.

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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