Help! My friend is addicted to credit card offers, despite being in debt.

How to help a credit card surfer who isn’t taking her debt seriously

Beth takes on a tricky new money question—and offers expert advice on how to resolve it and how to talk it over in constructive ways.


The situation

A friend of mine has five credit cards, with balances ranging from $500 to $12,000. She owes in total around $19,000. How do I know all this? Because she prides herself on juggling her debt, and she brags to me about the “good deals” and sweet introductory offers she gets on her cards. I’m afraid this game of musical chairs won’t end well. What should I tell her the next time she whips out her latest credit card find and offers to pay for lunch?

—Maya, Miami 

The solution

The high that people get when they feel they are gaming the system can be addictive. But as you rightly suspect, your friend’s financial house of cards will eventually come crashing down. Credit card companies wouldn’t offer these “deals” if there weren’t something in it for them. At some point, they’ll get paid. And in the meantime, they’re racking up interest and fees on what your friend owes.

Sadly, her situation isn’t all that unusual. In households where people have credit card debt, the average total balance is nearly $16,000. This is one case in which you don’t want to be an average American, and you definitely shouldn’t aspire to be above average!

With credit card balances soaring and interest rates rising, experts are predicting that there will be fewer credit card transfer offers, and the low-rate windows they dangle in front of consumers will get shorter. That means the next time the teaser rate on one of your friend’s cards is set to expire, she might not be able to find another card to transfer to. Plus, most of these transfer offers are available only to people with good credit. If your friend’s credit score gets dinged for any reason—a late payment, a hit because her balances are too high compared to her available credit, etc.—she might not be eligible for a new card.

The solution isn’t glamorous. It doesn’t involve a can’t-miss deal on a new card a 0% interest window to pay off her balance gradually. (Likewise, even if you pay off your balance in full every month, churning rewards cards to reap bonus points can be a dangerous game of its own.) If your friend wants to defuse the little plastic grenades (a great phrase for credit cards Elizabeth Warren once shared with me), she needs to pay down her credit cards, as quickly as possible, before she ends up in a vise of big monthly payments with no room to maneuver.

Here’s how she, or anyone, can get out of debt the smart way. (Note: The tips below assume that you’re paying more than the minimum on your credit cards each month—the first big step toward paying off your debt.)

  1. Focus on the highest-interest card. While making minimum payments on the rest of your cards, put all your available money in excess of your minimum payments toward the one with the highest interest rate. Pay it off, and then move to the card with the next-highest rate. This approach, known as the avalanche method, sounds logical, but only about one in 10 people who carry a balance on multiple cards actually use it. A new study of 1.4 million U.K. credit card users found that most people simply look at the balance on each card, then divvy up their payments proportionally: If you owe $1,000 on one card and $2,000 on another, you’ll put twice as much toward the higher balance. But if the card with the $1,000 balance has a much higher interest rate, you’re wasting money. In fact, the same researchers found that households owing money on five different cards paid an average of almost $350 a year in unnecessary interest. I’ve heard people recommend something called the snowball method, in which you pay off your smallest debt first, then take the money you were using to pay it down and put it toward your next smallest debt. Psychologically, people have been shown to respond positively to short-term “wins” like this. If that’s the only thing that works for you, then go for it. But in my book, saving hundreds a year in interest beats the fleeting, feel-good motivation of the snowball method.
  2. Reduce the interest you’re paying. While I don’t condone “credit card surfing,” which is the deceptively fun term for what your friend is doing, it is a good idea to pay less interest. Instead of switching from card to card, though, try lowering your rates. Call your current credit card companies and ask for a reduction, politely mentioning that you’re considering cancelling your card if you don’t get it. A recent survey found that seven in 10 cardholders who asked their company for a lower rate got one. Pretty great odds! If your company does say no, go ahead and see if you can find a card with a generous transfer offer. ( and are great places to look.) Just beware of the balance transfer fee many cards charge—typically at least 3% of your balance. Use a balance transfer calculator to make sure it’s worth your while—or try to find one that doesn’t charge a fee at all. And remember, reducing your interest is of limited value if you don’t keep chipping away at your debt.
  3. Go zero-tolerance on racking up more debt. You won’t pay off those credit cards if you keep charging on them. Yet many of us want to use credit cards for the rewards, as well as the fraud and price protections. Enter Debitize, a free app that allows you to link a credit card to your checking account. Every time you make a credit card purchase, the app deducts that same amount from your checking account and sets it aside in a reserve account from which you will pay your credit card bill. Signing up for this service requires sharing certain financial info. If that makes you nervous, you can do the same thing yourself—it just requires some extra accounting. What I like is the concept of “a dollar in, a dollar out.” If you stay on top of your current purchases like that, plus pay extra each month toward your existing balance, you really will see it shrink. And it won’t be due to any magic wand or irresistible deal.

Score one for financial willpower!

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