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I Need Advice About And My Situation. – Shannon

“Dear Steve,

I am almost 24 years old. My salary is $30,000. I have a school loan which is almost $31,000 and I have the payments according to salary, which I have to reapply for each year and am currently set to pay about $77/month so I can pay more on my credit cards.

I have about $25,000 total of credit card debt coming from 5 credit cards. A few of them have high interest rates, which I’ve tried to apply for 0% credit cards to transfer balances to but can’t get approved for anything even though my credit is good.

I have NEVER been late on any payments on any debt I’ve ever had so I’m assuming its b/c of the economy and me debt to income ratio. I am currently trying to do the snowball effect on paying off my cards but it just never seems to go anywhere.

My lowest credit card balance is 2,500 with interest rate of 26.58% and according to what I pay a month on it (being more than any other credit card) it would take me 8 months to pay off!! That seems forever for just that one card and my highest card is $9,200 with an interest rate of 10.24%. It really stresses me out just wondering how long it’ll take to pay off all my debt if my lowest credit card will take me 8 months to pay off.

I don’t want to hurt my credit since it is good, so debt settlement or bankruptcy is out of the question. I’m hoping to be out credit card debt within 3 years so I can then put all that money towards my school loan. I don’t save any money except the 3% of my pre tax paycheck to go into my Roth 401 retirement account at work b/c they match dollar for dollar up to 3% but other than that I have no money saved up for emergencies, etc. I have tried to apply for a $25,000 loan to put all credit cards in one but can’t get approved anywhere b/c of debt to income ratio and I do not own a house.

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I need advice on what I should do to get out of debt. It’s overwhelming me mentally. I have been looking at a loan consolidation website,, where on my estimate I could pay around $560/month for 66 months and with interest rate at possible 9.9% but this was just an estimate not a definite.

I was considering doing this but I don’t know how negative it will affect my credit report. I was thinking I could do it and the extra money I have left over a month I could save to pay extra on it later or for emergencies. I currently pay $800/month on credit cards (minimums plus extra $ lowest card). Any advice would be great on what would be the best thing for me to do. Thank you!


Dear Shannon,

First, let me congratulate you for all the things you are doing right. It sounds like you have a good head on your shoulders, you are working hard and you are smart.

The path you are on now isn’t wrong, just frustrating. I get the fact you want it to vanish faster but it is what it is.

CareOne Debt Relief Services offers a traditional debt management or credit counseling program and I assume that is the plan they suggested to you. But there are some facts that you need to be aware of with any credit counseling or debt management plan.

The terms Care One is offering you are terms passed down from the creditors. They are not fixed and can be changed by the creditor or your account could be sold to another creditor and the terms changed.

While participating in a debt management plan does not specifically hurt your credit it will diminish what your credit score could be. Traditionally, credit cards included in a DMP are closed by the credit grantor. This means that any benefit you would have received from maintaining a long payment history with a creditor, will be severed. That hurts what your score could have been if the accounts were not closed.

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If having the best credit possible is the goal than the best path is the one you are on with the debt snowball approach. I prefer to see people pay off accounts by smallest balance first rather than interest rate. It is easier to keep motivated and going when the accounts are falling fast.

Another alternative that you could explore is to get a consolidation loan through LendingClub is a peer-to-peer lending network and you could consolidate your credit card debt with an actual loan and pay it off sooner. This would let you get out of debt faster, reduce your overall interest rate and not close your cards thus boosting your credit history.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out 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.

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

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.

1 Comment

  • Thank you so much for the advice! I’ve decided to not do the debt management program and continue the “snowball effect”. I’m going to pay as much as possible towards my credit cards each month and tough it out. I’ll keep you updated on my progress!

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