“Dear Steve,
I am currently about 15,000.00 in credit card debt and 2500.00 in student loan debt. I have come across many difficult troubles in the past 5 years and i also supported someone for 3 years that completely drained me.
I am currently working three jobs just so i can get by and pay the minimum on my cards and student loans. I haven’t had a late payment in five years and i dont’ know how i am ever going to get ahead and pay this off i wish i could just freeze them its the interest payments that are killing me, what do i do? please please help me
Jessica”
Dear Jessica,
This is a good news / bad news situation. There are things you can do to lower or eliminate your interest rates but all of them will negatively impact your credit report and credit score.
If you want to dig out of debt with the best possible credit, then I would suggest that paying at least the minimum, more than the minimum, or the full balance is the only way to do that.
You could always try a balance transfer to a lower rate credit card, but there is no guarantee that the new rate won’t be higher than your current rate once the introductory period expires.
The best way to put this debt behind you is to increase your income, reduce your expenses or a combination of the both. If you want to figure out where your money is going, follow my spending plan approach that begins on page 81 of Eliminate Your Debt Like a Pro. You can download the book for free using the link.
Once you identify how much money you can use for debt repayment, pay only the minimum amounts due and save up at least $1,000 in a boring old savings account to protect you in case something happens and you need cash in a flash.
Next, use the debt snowball method of reducing your debt. This method makes it easier and more emotionally rewarding to dig your way out of debt.
That plan should work well for you.
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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