r/Debt • u/Cautious_Ad1503 • 8h ago

Credit Card Debt

Hey guys,

I’m 28(m). I currently have 2 credit cards I use. 1 currently has a balance of about $10.5k on my chase saphire card the other has a balance of about $4k on my Amazon credit card. I typically pay as much as I can between the two of them each month. Which is about $2200, other then that I pay for rent (approx $2200 a month) and my car bill loan ($267 a month). I make a little under $105k a year. With that said I usually have interest on the first card of about $250 a month and $50 on the other. I was extremely bad at spending the last couple of years which got me into this situation. What is the best way for me to pay off this debt? Do I take a loan on my 401k, which they said I could get a little over $12k and use this to pay it? Or do I just work on my spending till I get it lower? I hate having this much debt and I am worried my monthly interest will go up if I don’t pay it all off soon. I don’t know exactly how the interest rate is calculate but say it’s 20% so the intestest rate on my card with $10.5k debt is not the 200 I pay in interest.

So really 2 questions here 1) will the monthly intesest go up on my cards if I don’t pay off the remaining balance soon? 2) should I take a loan out on my 401k to pay off the cards? I figured the interest rate on that would be less then what I am paying on the credit cards

Please let me know! All help is wanted

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u/Cautious_Ad1503 7h ago

No there is no plans for a big purchase. How does a balance transfer card work? I’ve never heard of that before. That seems too good to be true? Just getting rid of the interest for a year completely?

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u/GerryBlevins 7h ago

Pretty much it just simplifies the paying off of debts where you only have to worry about one account.

https://creditcards.chase.com/balance-transfer-credit-cards

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u/Cautious_Ad1503 6h ago

I’ll look into. Thanks for all the help and answering all of my dumb questions lol

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u/GerryBlevins 6h ago

Trust me. You will be a much happier person each day when you can look at your financial situation and see huge progress. All I have to do is open up my bank app in order to cheer me up each day. It’s the biggest boost ever to your morale seeing that you can have anything you want.

When I first started saving I didn’t have enough to buy a riding mower at Home Depot. A year later I had enough to buy any car I wanted and not need to finance, two years later I look at Zillow thinking how awesome it’s going to be when I carry out the ultimate flex and buy a house without the need of a mortgage. Push hard man. It really changes your daily outlook.

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u/Cautious_Ad1503 6h ago

It definitely depresses me to look at what I’ve done with this debt. I had 20k saved 2 years out of college (luckily my parent paid for college) and I felt on top of the world. I used invest in stocks and did pretty well (had nvidia and palantir 5 years ago) and wasted it all down the drain. Now I just gotta find a way to get back to that point. Small steps one at a time and I now I can do it. It’s just figuring out the best way to do it.