how can i pay off debt with little income?

[Roxie0816]

i have about 3500 (maybe a little less) of CC debt..i'm in college and so i dont make a lot of money at my work-study job at the school.... basically i live paycheck to paycheck and barely have enough money to pay my CC every month...i try to pay at least 20 over my minimum payment though.

my question is this...is there anyway i can get the CC company to either lower my minimum payment, interest rate, or is it possible to freeze the card and just make continual payments on it without accruing tons of interest...because right now, i can only afford the minimum payment and at this rate it'll NEVER get paid off. any advice would help.

[carolinagirll]

So you are making payments and not behind.

Normally they do not settle unless you are behind. You could give them a call and see what they will do now.


Making $20.00 payments will get you no where(as you know specially with the interest accruing)

You could ask about settling or freezing now and see what they say. They may become complete *******s on the phone but stand your ground.

[Roxie0816]

well...im paying about 20+minimum payment....(so im paying each months interest plus about $40-50 more of my balance...which is getting me nowehere)

[4n6chick]

Call them and ask. No harm in that. My mom always told me that if they are mean to you tell them you want to cancel you card. They tend to become more willing to make a deal then. Good luck.

[Rich Lunsford]

I am glad to see you are focusing on paying the debt off completely. I understand that while in college, you don’t have much expendable cash. I am also proud that you haven’t missed a payment yet and I want you to continue your disciplined approach. One suggestion – If you have about $3,500 in debt and are paying about $25 per month, you are likely not making much headway on paying the debt down. If your interest rate is about 8.5%, you could be paying on this debt for as much as 50 years to pay it off! However, if you were able to pay $50 per month the debt would be gone in 8 years. This means that if you can carve out $25 from each paycheck per month, you can make a serious dent in the debt. Plus that college education is going to pay off at graduation. Your income will be more and make it easier to continue your debt reduction strategy. Just don’t miss a payment now. If you do, then the interest rate jumps way up and makes it tougher to pay down the debt.

Rich Lunsford is a CERTIFIED FINANCIAL PLANNERTM practitioner with USAA Financial Planning Services, one of the USAA family of companies. Rich holds the Series 7 and 66 securities licenses. Rich also holds the designations of Chartered Financial Consultant (ChFC®), Chartered Life Underwriter (CLU®), and CHARTERED RETIREMENT PLANNING COUNSELOR (CRPC®).

Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and CERTIFIED FINANCIAL PLANNER™ in the United States, which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

[rosebud*]

Often times you can speak with them about freezing interest and such. Discover is very good at doing that. Often times they have a 6 month program where they stop interest and what not. It never hurts to call and ask.

[lovemachine]

Just a suggestion...but what about taking out a student loan paying off or paying down your balance...that way you can hold off on payments till after graduation....

or what about transfering your balance or balances to one card with a promotional 0% interest for the first year or so

[rosebud*]

another thing you can do is take the one with the lowest balance and put all extra money into that card ( so just pay the minimums on the other cards, but put all the extra you were paying into the one card) then when its paid off you can move onto the another card all the while paying the same amount you have been paying.

[DakotaCowgirl]

Since you are making more then the min payment; do what Clark Howard stated. It does work. I'm starting to see a bit of hope.

You pay 1/2 the 1st and the rest the 14th. Just make it around your billing cycle. You will be paying down on interest and working your way towards your goal. Many CC companies charge interest daily. This way, you are getting more towards principal.

It is a struggle but keep going. Contact CC companies and just ask to get your rate reduced.

Good luck.

[Kitten35]

Originally Posted by rosebud* another thing you can do is take the one with the lowest balance and put all extra money into that card ( so just pay the minimums on the other cards, but put all the extra you were paying into the one card) then when its paid off you can move onto the another card all the while paying the same amount you have been paying.

This works super well. It's coined the "Debt Snowball" by finance advisor Dave Ramsey and I've been doing it a few months now. It's great! You'll be out in several years!