Getting My Sister Out of Debt
By Jenny in General | 5 comments
When my younger sister graduated from college and landed a good job with an investment firm, she decided it was time to get a credit card. I told if she was going to start establishing her credit to do it wisely, never spending more than she could afford. Of course she ignored me and within six months she had five credit cards on the go. To her it was no biggie, because she could afford the minimum payments. What she didn’t realize was those monthly payments were barely putting a dent in the balances, because of the interest rates. She finally realized that she was in some financial trouble and of course came to me for help.
I told her she needed to look into debt consolidation so that she would only be dealing with one interest rate and one monthly payment. And I also told her she would have to put the credit cards away until the debt was all paid off. I went with her to my bank and helped her get a personal loan to pay off the cards. She has decided that with the money she is saving on the monthly payments she will make extra payments to get the debt cleared up faster. A hard lesson, but one well learned.
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Isaac | Mar 3, 2009 | Reply
Credit cards can be totally dangerous. I think that debt consolidation is sometimes a case of robbing Peter to pay Paul, but it’s definitely an option. You’re right; often the interest rates are much better.
Samuel | Mar 3, 2009 | Reply
Personal loans might be kind of tough to get right now depending on the kind of collateral your sister has. The most important thing is to STOP SPENDING!
Carmen | Mar 3, 2009 | Reply
Making extra payments to bring your debt down faster is one of the smartest moves you can make! That’s what I’m trying to do with my cards now. I definitely sympathize with your sister.
ann | Mar 3, 2009 | Reply
As an older sister myself, I think you’re being kind of harsh to your kid sister. She got into this situation and I’m sure she feels guilty enough about it; you don’t need to make it worse. Good job giving her options, though!
abigail | Mar 5, 2009 | Reply
I think you’re definitely right to be so harsh; she has got to learn how to take care of herself and become financially viable. You’re just looking out for your sister; good job!