Friend with extremely high interest credit card debt

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Zapp Brannigan
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Friend with extremely high interest credit card debt

Post by Zapp Brannigan » Thu Feb 15, 2018 7:49 am

I have a friend with $14,000 in credit card debt at extortionate interest rates, like 30%+. She works two jobs and makes $30,000/yr, no kids to worry about, no savings.

The root of her problem is she spends too much, which I've tried and will continue to address. But I've avoided credit cards my whole life and don't really know what her options are in terms of debt forgiveness, balance transfers, what have you. It seems insane to me to pay $350/mo and not even tread water. I can see how demoralizing that could be to someone trying to get motivated.

Any advice is appreciated.

Falcon2018
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Re: Friend with extremely high interest credit card debt

Post by Falcon2018 » Thu Feb 15, 2018 8:02 am

You tell her she needs to stop spending pay it down. That's the only solution.

It's really not your problem to lose sleep over.

Drew777
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Re: Friend with extremely high interest credit card debt

Post by Drew777 » Thu Feb 15, 2018 8:05 am

She has an income problem, not a debt/spending problem. At $30k a year there's only so much she can save or cut spending. I'd be focusing 100% of my time and effort on increasing my income if I were her.

magicrat
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Re: Friend with extremely high interest credit card debt

Post by magicrat » Thu Feb 15, 2018 8:11 am

She can try to transfer to a new card with a low or 0% balance transfer offer, but that is not going to matter if she doesn't change her habits. You don't mention whether she is committed to change or not. If she is, she'll need a simple budget and a plan to pay the credit card off, then never carry a balance again. If she's not committed, there's nothing you can or should do. It's her life.

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sunnywindy
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Re: Friend with extremely high interest credit card debt

Post by sunnywindy » Thu Feb 15, 2018 8:11 am

I've never faced this situation myself or with friends (on a chronic level), but I doubt there's much you can do except propose outings where you don't have to spend money. Go for a walk, or get books from the library, or make dinner at someone's house, etc... Otherwise, this is something most likely she has to learn (internalize) herself. Personally, I definitely would not say anything.

How do you know these details?

(If she offered up the details, then she knows she is in an unsustainable situation and that is a big hurdle overcome. If it was me, I would physically destroy the card and go to cash, so at least spending would be less convenient.)
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mouses
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Re: Friend with extremely high interest credit card debt

Post by mouses » Thu Feb 15, 2018 8:15 am

I would first of all try to balance transfer to cards with lower interest rates. I checked the interest rates on my cards and they are Chase promotion of 0% until March of next year, and Digital Federal Credit Union at 12.5%. I don't know if they would accept her as a customer. But getting rid of that $350 a month interest or even reducing it would help.

Then if she is really spending too much, she has to cut that back.

If she is working two jobs and only making $30,000 a year, she is in a tough spot. Try to see if she can get qualified for a better paying job.

Zapp Brannigan
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Re: Friend with extremely high interest credit card debt

Post by Zapp Brannigan » Thu Feb 15, 2018 8:30 am

We're work friends and it just came up in conversation. I'd recently paid off 30 grand over three years making 35 so was trying to show her what was possible when you're a budget maniac. The cost of living here is low.

As far as I know she stopped using the cards awhile ago.

gotester2000
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Re: Friend with extremely high interest credit card debt

Post by gotester2000 » Thu Feb 15, 2018 9:00 am

Zapp Brannigan wrote:
Thu Feb 15, 2018 8:30 am
We're work friends and it just came up in conversation. I'd recently paid off 30 grand over three years making 35 so was trying to show her what was possible when you're a budget maniac. The cost of living here is low.

As far as I know she stopped using the cards awhile ago.
*** Basic issue to solve is to stop living beyond means - tomorrow if income is 60k this person will run 28k debt. Rest is not that difficult.

1. Refinance to whatever lower interest offer available.
2. At $2500/month minus some income cuts, the single and healthy person should aim to hit the debt with $1000/month.
3. Debt should clear in 15-18 months.
4. Give up spending habits and start earnestly to get qualified and find better work.

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dm200
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Re: Friend with extremely high interest credit card debt

Post by dm200 » Thu Feb 15, 2018 10:13 am

One possible (part of) strategy - Pick the lowest balance card - pay extra on it and do not added charges on this card. When balance is zero, use that card and pay balance each month - no interest. Then move to the next card.

JGoneRiding
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Re: Friend with extremely high interest credit card debt

Post by JGoneRiding » Thu Feb 15, 2018 10:38 am

At that debt to income level she is going to struggle to find good cards with enough credit to do the transfer to lower cards thing. My husband had similar income but half the debt and a house with equity and I could still only get a card for 3500 with no fee balance transfer (chase has the best offer for this)

I would actually pick the least compative card and pay that. The one with the highest rate I would call and threaten with stopping payment if they won't lower the rate. She needs breathing room and 30% ing won't get it

Nate79
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Re: Friend with extremely high interest credit card debt

Post by Nate79 » Thu Feb 15, 2018 10:40 am

Dave Ramsey's total money makeover book would be a good read for her, preferably from her local library....

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BL
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Re: Friend with extremely high interest credit card debt

Post by BL » Thu Feb 15, 2018 10:45 am

Nate79 wrote:
Thu Feb 15, 2018 10:40 am
Dave Ramsey's total money makeover book would be a good read for her, preferably from her local library....
+1, but she has to want to do it.

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Pajamas
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Re: Friend with extremely high interest credit card debt

Post by Pajamas » Thu Feb 15, 2018 10:59 am

The credit card balance is a symptom, not the underlying problem, which is spending more money than she has. The high interest rate on the credit card(s) would seem to indicate that she has a poor credit rating. Sounds like she may be in completely over her head at this point with the debt increasing faster than she can pay it.

If she's asked for your help, you might help her figure out exactly what her income is and what her spending is and look at ways to increase the income and reduce her spending. It is probably going to take something fairly radical such as changing where she lives, selling her car, or getting a new job, or some combination of these and similar things.

student
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Re: Friend with extremely high interest credit card debt

Post by student » Thu Feb 15, 2018 11:03 am

As other have said, spending is the problem. For the question that you asked, I suggest you take a look at https://creditboards.com/forums/

delamer
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Re: Friend with extremely high interest credit card debt

Post by delamer » Thu Feb 15, 2018 11:35 am

If she hasn’t specifically asked for your help, then stay out of her affairs. Particularly with a work friend, the risk if you damage the relationship is high.

dziuniek
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Re: Friend with extremely high interest credit card debt

Post by dziuniek » Thu Feb 15, 2018 11:40 am

Nate79 wrote:
Thu Feb 15, 2018 10:40 am
Dave Ramsey's total money makeover book would be a good read for her, preferably from her local library....
+1.

Sic Ramsey on her.

inbox788
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Re: Friend with extremely high interest credit card debt

Post by inbox788 » Thu Feb 15, 2018 1:41 pm

Zapp Brannigan wrote:
Thu Feb 15, 2018 7:49 am
I have a friend with $14,000 in credit card debt at extortionate interest rates, like 30%+. She works two jobs and makes $30,000/yr, no kids to worry about, no savings.

The root of her problem is she spends too much, which I've tried and will continue to address. But I've avoided credit cards my whole life and don't really know what her options are in terms of debt forgiveness, balance transfers, what have you. It seems insane to me to pay $350/mo and not even tread water. I can see how demoralizing that could be to someone trying to get motivated.

Any advice is appreciated.
Simple math, but 30% of $14k is over $4k. That's a lot of spending on interest alone that could be better used for shopping or groceries. She's still paying $20/month on that blouse she bought 3 years ago that she doesn't wear anymore or has donated to goodwill.

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cheese_breath
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Re: Friend with extremely high interest credit card debt

Post by cheese_breath » Thu Feb 15, 2018 1:55 pm

Don't let her problem become your problem.
The surest way to know the future is when it becomes the past.

mptfan
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Re: Friend with extremely high interest credit card debt

Post by mptfan » Thu Feb 15, 2018 1:58 pm

Did your friend ask for your advice about how to get out of debt?

Question: How many debt reduction counselors does it take to change a lightbulb?
Answer: One, but the lightbulb has to want to change.

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flamesabers
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Re: Friend with extremely high interest credit card debt

Post by flamesabers » Thu Feb 15, 2018 3:11 pm

mptfan wrote:
Thu Feb 15, 2018 1:58 pm
Did your friend ask for your advice about how to get out of debt?
+1.

As you much as you want to help guide your friend out of her debt, unsolicited advice is seldom well-received.

denovo
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Re: Friend with extremely high interest credit card debt

Post by denovo » Thu Feb 15, 2018 3:17 pm

Zapp Brannigan wrote:
Thu Feb 15, 2018 7:49 am
I have a friend with $14,000 in credit card debt at extortionate interest rates, like 30%+. She works two jobs and makes $30,000/yr, no kids to worry about, no savings.

The root of her problem is she spends too much, which I've tried and will continue to address. But I've avoided credit cards my whole life and don't really know what her options are in terms of debt forgiveness, balance transfers, what have you. It seems insane to me to pay $350/mo and not even tread water. I can see how demoralizing that could be to someone trying to get motivated.

Any advice is appreciated.
She can file bankruptcy. Has the added benefit of making sure no one will give her a credit card to run up debt for a while.
"Don't trust everything you read on the Internet"- Abraham Lincoln

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