How to pay off 30k in credit card balance and mounting interest?

[Anonymous]

I am trying to help my dad. He pays approx. $500 in interest each month to his credit cards. He's currently retired and laid off his job because of covid. His balances are as follows,

Discover 12,706

Walmart 3,005

Home Depot 1,948

Target 2,432

Best buy 638

Capital One 3,898

Citibank 3,225

JcPenney 2557

I'm not aware of any covid help these cards might offer or what the best route is to minimize the balance or defer/erase interest? Any help is appreciated.

[Anonymous]

I would not be able to tell you specifics, but many of my cards have a banner at the top of their website after you log in saying "click for more information" for Covid-related things, like deferrals.  

Would be worth pursuing, to see if they have a forebearance

program.  

Whether he takes any of these options might depend on how possible it would be for him to catch up after the world goes right side up again.  If not, as he is retired, he may want to pursue other paths, for which other forum members  would have more expertise than I.

[silver_idle]

---

@Anonymous wrote:

I am trying to help my dad. He pays approx. $500 in interest each month to his credit cards. He's currently retired and laid off his job because of covid. His balances are as follows,

Discover 12,706

Walmart 3,005

Home Depot 1,948

Target 2,432

Best buy 638

Capital One 3,898

Citibank 3,225

JcPenney 2557

I'm not aware of any covid help these cards might offer or what the best route is to minimize the balance or defer/erase interest? Any help is appreciated.

---

Many of the creditors you listed will sometimes waive interest upon request, especially with everything still going on. They may waive one month interest and *might* waive future interest but its hard to say and best to have him contact them. Many of them do have covid19 hardship programs but there might be more options depending on current income, etc. Capital One, as an example, will work with customers going through hardship, especially with issues involving covid. Others might be able to chime in with more info, but in all, your best option is to have him call them but continue making payments if possible while working with them. If he has extra cash, he could try snowballing it by starting with the card with the lowest balance and move up from there. 

[rostrow416]

Call each creditor and explain the situation and see what kind of programs they offer. 

I did a program with Discover a couple years ago where they lowered the interest rate to near 0 and set me up on a payment plan for 12 months to help me get stable.  

[Openwater]

If the accounts have been paid on time and you might be able to apply for either a personal loan or a debt consolidation loan. That will bundle everything in to one lump payment that is much lower that paying each on individually. This will lower the interest that you are paying, as well as open up more monthly cash flow.

[Anonymous]

How are his credit scores?  There's a chance he could grab a loan to knock out all of the balances on those cards, then just be left with the one monthly loan payment that would be at a significantly lower interest rate than the cards have.

[JR_TX]

His first course of action should be to lump them all up in one consolidated loan but I'm not sure of any FI that will be willing to lend him a $30K loan at this economic climate much so with his current employment situation unless he has other income apart from his SS that can be considered for loan repayment. 

A liquidation of asset/s should be his second option if the first is not possible. Equity loan on a property is also part of the second option.

Then finally, a bankruptcy might be his only option in which he'd need to consult a lawyer.

Best of luck to him!

[Anonymous]

1.) Could apply for a personal loan and consolidate it all, you will then have an installment product with a definite end date it will be paid off. No "minimum payments" and 20-30 years of indebtedness. 

2.) If he can't get approved for personal loans, I'd see if I could use any one or two of the cards (highest limit) to balance transfer the rest onto it. If anything, it will minimize the number of potential lates (less accounts carrying a balance) and lessen the sheer number of creditors he will have to face if he defaults. 

3.) Sometimes, very rarely, creditors will allow you to close the account and pay the balance off at a reduced interest rate, in exchange for removing the ability to charge anything else to the account. 

[SOGGIE]

---

@Anonymous wrote:

I am trying to help my dad. He pays approx. $500 in interest each month to his credit cards.

---

I have a friend who was in this same predicament. They found it quite easy to consolidate their CC debt with a loan from Discover.

[Anonymous]

---

@Anonymous wrote:

I am trying to help my dad. He pays approx. $500 in interest each month to his credit cards. He's currently retired and laid off his job because of covid. His balances are as follows,

Discover 12,706

Walmart 3,005

Home Depot 1,948

Target 2,432

Best buy 638

Capital One 3,898

Citibank 3,225

JcPenney 2557

I'm not aware of any covid help these cards might offer or what the best route is to minimize the balance or defer/erase interest? Any help is appreciated.

---

The absolute first thing he should do is tear up his credit cards and never ever use them again. The second thing he should do is pay off some of the very low balance cards for some psychological support, as well as making the debt appear more manageable. That would be the Best Buy card first, then maybe home Depot and JC Penney.

He can consider debt consolidation, as other have mentioned, but that will not solve the problem if his problem is his behavior. What are his sources of income? Does he have any? If so, you could create a budget with him to locate any unecessary spending categories. Use the decrease in expenses to help aggressively pay off his card debt. If he doesn't have income you may want to consider bankruptcy, but that comes with serious penalties to go that route.

Good luck.