Ask The Debt Free Diva

By |2017-10-31T06:44:49-04:00October 31st, 2017|Uncategorized|

By Dee Dee Sung

Q: I am currently $35,000 in credit card debt. I do not want to file bankruptcy, have always managed to pay my bills, but these credit cards just slipped up and now I am stressed out. The interest rates are low, but it is still hard to make the payments of about $700 a month. I’d like to combine everything into one payment and feel I can afford to pay $500 a month. I don’t want to do anything that will hurt my credit or cause me not to be able to use any of my other cards that I have put up for emergency. What options do I have and how should I go about this?

A: Credit card debt is overwhelming and often hard to stay on top of. There are a number of debt relief options people can turn to but they are usually for worst case scenarios when your credit has already been tarnished. In your case, you’ve kept your credit in good shape and therefore, the same options wouldn’t necessarily be available to you. It’s almost as if you’re penalized for being responsible and timely with your payments.
So you’re aware, here are the debt relief options available:
¥ Bankruptcy
¥ Consumer Credit Counseling/Consolidation
¥ Debt Settlement/Negotiation
¥ First Mortgage Refinance
¥ Home Equity Lines of Credit
¥ Unsecured Consolidation Loans
The first three options will have a negative impact on your credit rating. If you own a home, I recommend you explore the possibilities of refinancing your mortgage or obtaining a home equity line of credit. Not only will your interest rate and payments be lowered, allowing you to put more towards the principal reduction, the interest you pay will be tax deductible. If you don’t own a home, you could do one of two things: talk to your bank or credit union about an unsecured consolidation loan that is on a fixed term with fixed monthly payments. In this case, the interest will not be tax deductible but you will know exactly how long it will take for you to become debt free. In addition, you could talk to the credit card companies and negotiate lower rates. The problem is that given you’ve made your payments on time, there’s really no incentive for the credit card companies to work with you as you’ve not demonstrated any financial hardship or inability to repay. Also, be aware that MBNA, Citibank, and Bank of America have announced that they are doubling their monthly payments on outstanding balances. Other credit card companies are expected to follow suit in the near future.
Once you’ve determined the best route to take, here are four things you must do:
¥ Determine how much money you can free up each month to add to the principal reduction – what I call “Debt Detonator Dollars!”
¥ Identify and change the negative habits and emotional patterns that got you into this debt. If you don’t change your behavior, the debt will come back.
¥ Plan something to look forward to in the future as a reward for paying off your debt. Once you’ve decided how long it will take to eliminate your debt, you can plan on a reward for the short, medium and long term. It doesn’t have to be big or expensive, it must be something that brings you joy!
¥ Once you’ve paid off the debt, take that same payment and put it towards your future. For example, by investing $700 per month for 10 years, averaging a 6 percent return, you’d accumulate just under $115,000. Now that’s something to look forward to!
Above all, remember that this debt in no way defines who you are as a person. Building a strong sense of self worth will serve to increase your net worth!

Metro Detroit speaker, author and syndicated radio personality Dee Dee Sung is the founder and creative director of The Debt Free Diva with a mission to educate, entertain and inspire people in reinventing their relationship to money. Be sure to listen to Magic 105.1 every Sunday at 7:30 a.m. for “The Debt Free Diva” talk show. To learn more, visit

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BTL Staff
Between The Lines has been publishing LGBTQ-related content in Southeast Michigan since the early '90s. This year marks the publication's 27th anniversary.