I’m Stressing Over My $40K Credit Card Debt and I’m Running Out of Options

a woman sits at a table with a worried expression on her face and holds a credit card.
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Dear Penny,

I need advice on how to pay off $40,000 of credit card debt fast.

I have some at zero percent interest, but only for a year to a year and a half.

What’s the best starting point? We are not using our credit cards anymore. My husband and I both work, and we can pay this back. I just need advice.

I am scared it will jump up to 25% interest before I can make a big enough dent. After an autopay mix-up that resulted in a late payment, our credit scores have dropped from the mid-700s to the mid-600s, and we aren’t getting any more zero percent interest offers. We were turned down for a few consolidation loans.

Any advice on how to deal with that, or who to contact? I just feel overwhelmed, and instead of having so many great options, I wish I had a step-by-step plan.


Dear M.,

It’s time to call in some backup and talk with a credit counselor. Not one of those credit repair scams you’ve probably seen or heard ads for — I’m talking about a reputable, nonprofit debt management agency.

After an initial call or visit, a credit counselor can assist you in disputing negative items on your report or help you manage your debt through a payoff plan. A legitimate debt management plan shouldn’t charge more than $50 per month.

The most nerve-wracking part is making the first appointment. I did this a few years ago when I was feeling crushed by my credit card, student loan and small-business debt.

My counselor asked me a ton of questions about my debt. Balances, interest rates, minimum payments. She asked about my checking and savings account balances, and what I was paying in estimated taxes each quarter because I was self-employed. She asked about my rent costs. My utilities. If I hadn’t signed up for this, I would have thought it was invasive.

She crunched some numbers and sighed a little. “You just need to keep going,” she said, explaining that my credit was good, my payment history was solid and my interest rates were fairly low. The best course of action would be to stay the course and keep making whatever payments I could.

This might be the same news you’ll get if you call a credit counselor. But you’ve likely been looking at this debt so much that you need an impartial third party to review your situation.

It was hard to accept that a debt management plan couldn’t help me then. Like you, I wanted a plan. An answer. Any answer.

The reality was that I had to form a plan on my own. I tackled small balances first to clear them away, and then moved on to debt that had higher interest rates. But the real key was to stay motivated. It’s going to be a long road out from under this debt, whether you work with a credit counselor or on your own. As you rebuild your payment history, your score will go up. The zero interest transfer offers will return. You can keep transferring the balance and throwing money at your debt for as long as you have to.

And for the next few years, that’s going to have to be OK. Because even if it takes years, there will be an end to that journey. If you can stay motivated, you’ll be well on your way to freedom from debt.

The inbox is open. Submit a question or send your worries to [email protected], and I’ll see what I can do to help.

Disclaimer: Chosen questions and featured answers will appear in The Penny Hoarder’s “Dear Penny” column. I won’t be able to answer every single letter (I can only type so fast!). We reserve the right to edit and publish your questions. Don’t worry — your identity will remain anonymous. I don’t have a psychology, accounting, finance or legal degree, so my advice is for general informational purposes only. I do, however, promise to give you honest advice based on my own insights and real-life experiences.

Lisa Rowan is a senior writer at The Penny Hoarder.