My friends in massive credit card debt

Hey guys,

Haven't posted on here in well....ages.

A close friend of mine (not it's not me), has managed to get himself into very very big credit card debt (about $30,000).

He's currently paying 30% P.A. interest on that debt and i'm looking at refinancing options for him to get the interest rate down.

Putting aside all the "he was irresponsible" stuff which me and him are both aware of, does anyone know of any good options out there for refinancing credit card debt?

I doubt it's still offered but pre-GFC there was some bank (might have been St George) offering a $20,000 limit credit card with an interest free period of 6months. Obviously really bad idea for most people, but under these circumstances it may be appropriate. Does anyone remember this and whether it is still available?
 
Not sure if it was StG, but possibly Citibank was offerring 0% or 2% for bal transfers a few months ago...not sure if still on offer?
 
Not sure if it was StG, but possibly Citibank was offerring 0% or 2% for bal transfers a few months ago...not sure if still on offer?

Yeah, Citibank was doing 1.9% on transferred balances.

Maybe if he gets one of them, transfers the money owed and throws the card. (interest of purchasers is 20% or something)
 
Bear in mind that if he doesn't pay off the balance within the 6 month period (or whatever is on offer) then the interest rate will revert back to the market rate of at least 19%
 
Bear in mind that if he doesn't pay off the balance within the 6 month period (or whatever is on offer) then the interest rate will revert back to the market rate of at least 19%

19% is still better than 30% though. I'd see if he can do that and pay as much as possible off over the six months, then see if he could roll it over again to a different card.
 
I know its not helpful, but its all relative

I have seen card debt of 200 k and people recover from it

Im sure there is a soln there

ta
rolf
 
yeah i didn't think $30k was high - i mean, if it's maxed out how is that any different to a bad car loan? everyone's had one of those at one stage.

best thing they can do is cut the cards up immediately and pay down in $500-$1000 chunks IMPO. the debt will be gone in about 3 years.
 
He should try to get this debt rolled into a personal or home loan with a much lower interest rate, and cut up the credit card/s.

He should then up his repayments so he makes headway in reducing the balance.

Alternatively if his debt is made up of a series of cc he could start paying off the smaller of the amounts and work up.

First however, he should contact the banks to negotiate a lower interest rate. They will do this if you say you'll switch to another bank offering you a lower interest rate ( 12% should do it ;)).
 
Qaz

These are the Citibank options on balance transfers:

Citi Clear Platinum - 0% interest first 6 months
Citi Gold - 1.9% interest first 12 months
Citi Silver - 2.9 % interest first 12 months
Citi Gold - 3.9% interest for life of balance transferred

Been down this road a while ago. It is/was quite difficult to overcome as alot of it is/was psychological. Reducing the rate is only part of the solution.

Your friend will need to put together a plan of action, stay physically and mentally strong and focused (poor health or depression can worsen the situation), cut out anything that isn't a necessity and stick to the plan but don't dwell on it either, it will be paid off in no time when he gets into a routine and he'll probably be an excellent saver afterwards.

Hope all works out well.
 
I know its not helpful, but its all relative

I have seen card debt of 200 k and people recover from it

Im sure there is a soln there

ta
rolf

It was around $60k+ at one stage and he sold an investment property/old PPOR to lower the debt.

He will get out of it eventually, I mean, his on a huge income (over $150k a year gross).

But any ways of refinancing the debt to a lower rate are helpful at this stage.

I leant my friend the book, "I will teach you to be rich" by Ramit Sethi in the hope it will change his spending habits.
 
sounds like he needs to tighten the belt, sell the car, run around in an ex-fleet commodore for a few years and sort that ***** out.
 
It was around $60k+ at one stage and he sold an investment property/old PPOR to lower the debt.

He will get out of it eventually, I mean, his on a huge income (over $150k a year gross).

But any ways of refinancing the debt to a lower rate are helpful at this stage.

I leant my friend the book, "I will teach you to be rich" by Ramit Sethi in the hope it will change his spending habits.
So, he only got $30k to use to lower the debt after the sale of the house?

I may be jumping to conclusions, but I think if he is on an income of that level AND he had to sell a property, to only make a $30k dent in the debt, it sounds to me like he's not really trying.
 
I reckon, on an income of $150,000 he could get rid of that $30k debt in a little under a year. its just under $600 a week which would leave him about $900 a week to live on...

I cant see the problem personally but there again I dont know his other commitments and spending habits...

Boods
 
So, he only got $30k to use to lower the debt after the sale of the house?

I may be jumping to conclusions, but I think if he is on an income of that level AND he had to sell a property, to only make a $30k dent in the debt, it sounds to me like he's not really trying.

I don't think you're far off Skater, this is a common trend. There are alot of people with the capacity to earn big, spend big on expensive tastes and worry about it later cos they can earn "more than enough" to pay it back later. I used to be a victim of this and I see alot of people that are still a victim of this.

Heck the person that used to live in the apartment I am currently renting hasn't notified the credit card companies that they have moved out. I have a 6 month pile of letters from credit card companies and lawyers and fine wine companies :confused: on my kitchen table.

Luckily for Qaz' friend, he has a friend in Qaz who is sort of staging an intervention into his spending habits. Hopefully Qaz's friend takes it more seriously.
 
I cant see the problem personally but there again I dont know his other commitments and spending habits...

I agree boods99, but then qaz deliberately knobbled the entire thread by putting this corker into the original post.

Putting aside all the "he was irresponsible" stuff which me and him are both aware of

The bit that has been asked to be 'put to the side' is the only thing worth talking about, as is by definition both the root cause of his mate's predicament and also the thing that will keep him squarely in the bad debt corner.

The tiny portion of tweaking the interest rate on the debt is irrelevant. Tackling the cause of the debt in the first place and the personal habits that create them isn't being spoken of.

Being "aware" doesn't mean jack squat.
 
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