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My friend has about 20k in credit card debt spread across 6 cards with an interest rate on average of about 24%. She is able to pay a little more than the minimum but obviously continuing this way will end up with her paying a lot of interest over quite some time. What is her best option in trying to get a lower rate.
I imagine her credit card score isn't too stellar at this point so how likely would it be to transfer the balance over to multiple cards at a better rate as i assume the debt would be too much to put on one card. Also is a debt consolidation loan a reasonable possibility? She does not own a home. Thanks for your insight.
What to do about the debt
Hi Jesse,
First of all ask her to pull a copy of her credit report, and then check the status of all the credit card accounts. If she still has not defaulted on any of the cards, you can ask her to consolidate her debts.
Debt consolidation lowers the interest rate, and thus it becomes much easier to pay off the debts. In debt consolidation, all the debts are consolidated into one, and thus a single loan is taken to pay off the debts. Under debt consolidation, you need to make a single payment. Consolidation doesn't even affect your credit negatively.
Thanks,
Aaron