Options for Paying Off Credit Card Debt: Hardship Programs, Balance Transfer Cards, Loans and More

Hear Nerds’ “financial horror stories” and explore solutions for paying credit card debt, from 401k loans to bankruptcy.

01:20 This Week in Your Money: Hosts Sean Pyles and Sara Rathner share their personal “financial horror” stories, including Sean’s rejected credit card application and what happened to some of Sara’s retirement account funds. They’re cautionary tales that will help you make sure you’re getting the most out of your money.

09:46 Today’s Money Question: Sean welcomes Nerd Liz Weston and Tommy Tindall to help answer a question about whether a listener should consider taking out a 401k loan to pay off credit card debt. Tommy explains how calculating your debt-to-income ratio can help you understand your options. He also shares the pros and cons of various methods for paying off credit card debt, including credit card hardship programs, balance transfer cards, personal loans and filing for bankruptcy. He also shares his personal experience of taking out a $15,000 loan from his 401k to make a down payment on a house, breaking down both the benefits and opportunity costs associated with the decision. 

28:05 Final Thoughts.

In their conversation, the Nerds discuss: financial horror stories, credit card debt, debt-to-income ratio, investment journeys, 401k loans, debt-to-income ratio (DTI), credit card hardship programs, balance transfer cards, personal loans, missed payments, bankruptcy, high credit scores, retirement money, debt solutions, paying off debt, financial tools, compound returns, cashflow challenges, opportunity costs, credit counseling agencies, and debt management plans.

To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email podcast@nerdwallet.com.

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