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Question for the Money Doctors

Question submitted on Mar 20, 2012.

Question

My husband and I have about 30k in credit card debt. We're able to pay our bills, but it's going to take forever to pay off this kind of debt. We owe more on our house than it's worth because of the economy, so we can't get a consolidation loan from the bank. I was thinking of calling a consolidated credit company, but I'm afraid that will hurt our credit, which is still good in spite of our situation. What should we do?

Answer

First you may want to consider taking a hard look at your current budget. Although I'm sure you've taken this step already, going back through the process again may well yield a couple more hundred dollars per month. Try using cash to pay your day to day bills such as grocery, dining and household purchases. Then, make sure you are using your surplus funds to attack the credit card with the highest interest rate. If you are contributing to pension plans at work, you may consider suspending those, but, only until you get the credit card debt under control. Finally, you may be able to pick up some part time work and put those earnings toward the credit card debt.


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