May 16, 2025 • 19 mins
BA Fam, we’re back with a classic BA Q&A, and this week’s episode is all about the kind of debt that just hits different credit cards with sky-high interest rates. A listener wrote in with a heartfelt message and a tough reality: nearly $12K in credit card debt spread across multiple cards, with APRs climbing over 30 percent.
Mandi breaks down:
- When debt consolidation actually makes sense
- How to avoid the trap of solving a short-term problem without fixing the root issue
- What happens to your credit score (for better or worse)
- The difference between snowballing your debt vs. avalanching it
- And why it’s time to stop avoiding your balances
You’re not alone, BA fam. And no, you're not failing. You're just one plan away from a financial reset. Let’s talk about it.
📩 Got a question? Email brownambitionpodcast@gmail.com or DM @brownambitionpodcast
Resources + Links:
- Investor.gov Compound Interest Calculator
https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
- Apps for tracking expenses: Rocket Money, spreadsheets, or whatever helps you
- Credit unions for lower-interest personal loans
- Debt snowball vs. debt avalanche
LET’S STAY CONNECTED
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Website: https://www.brownambitionpodcast.com
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
If you haven't solved the root issue why you were
racking up credit or turning to credit cards in general,
then it's very likely that you will consolidate it and
shift it onto a personal loan that you can focus on,
but that you may just recreate the same problem a
year from now or even less with how expensive things are. Hey,
(00:22):
aba fan, what's up? It's your girl, Mandy Woodriff Santos
aka Mandy Money, your host hostess with the Mostess. I'm
actually here for a classic, a classic Brown Ambition episode,
the Baqa where y'all got questions. I'm going to take
them and give y'all some answers. But just a reminder
if you're new here, this is answers with a lowercase A,
(00:45):
meaning I am not your personal financial advisor. Don't sue me,
don't come for me, don't say well Mandy said I
should do. I am giving you like a besties perspective,
like a really smart, financially savvy financial journalist for over
a decade, podcast host for also a decade, knows a
(01:07):
lot of stuff about money and career, like That's where
I'm coming from here, But at the end of the day,
I don't have all your info. I don't even I
don't you know, I may not know you one hundred percent.
So just take this with a huge grain of salt.
Get your salt shakers out. Okay, now that I've covered
myself legally, let's get into the real real because y'all's
questions are becoming increasingly stressed, increasingly intense. And I got
(01:31):
a question this week from a listener called A n
and she emailed me directly, which, by the way, if
you want to get your questions financial investing, career, whatever
it may be, you can email me Browdambition Podcast at
gmail dot com or slide into my DMS. I'm at
Brown Ambition Podcast on ig. If you want to be anonymous,
that's cool. If you want to use a pseudonym, also great.
(01:54):
If you want me to say your full name so
everybody knows who it is that's asking the question. You know,
it's a to y'all. The point is I want to
give y'all a chance who may not be able to
get access to my coaching program to me one on
one ask your questions. You don't have to go through
hardshit alone, and that is what I'm here for. Okay, Okay,
(02:15):
BA fan, stay tuned. We'll be right back now. Other
housekeeping stuff, what else is going on? We have a
new intern, a new producer intern, BA fan. We want
to say hello to our brand new producer intern, Miss Gabrielle.
Welcome her. And Gabrielle is a upcoming college sophomore at
(02:35):
Syracuse University, which is an incredible journalism program. And this
is a really good example of how if you want
to know, if you want to put yourself in the
room where opportunities can happen to you. Gabrielle is an
incredible example of that because I ran into her. I
met her because she asked a question at an event
that I went to for an author and former guest
(02:56):
of the show, Alencia Johnson, when her book came out
Flip the Tables. Both me and Gabrielle happened to go
downtown to the Barnes and Noble in the Upper West
Side where Alencia was giving a talk, and Gabrielle raised
her hand also she went with her mom, which is
just adorable. She raised her hand, she asked a great question,
and I was at that point where I'm like, I
(03:16):
would love to work with a college student to give
them some real hands on experience in you know, podcasting,
and to be able to help with this brand and
also the youths. I need to connect with the youths.
So I heard Gabrielle's question. I walked up to her.
I was like, okay, tell me about yourself. You said
you went to Syracuse. What's all going on? Do you
want an internship? This was maybe back in February March,
(03:39):
I want to say. So she's like, well, I have school,
but let's talk. And so we talked. You know, she
sent me her resume, her clips. I got to know
her a little bit better, and then I was like,
you know, when do your finals over, can you start then?
And that's exactly what's happened. So she's going to be
with us for the summer and we'll see about the future.
But very excited to give her this opportunity, and I
(04:03):
know she's gonna smash it. All right, So let's get
into today's question, y'all. This is from a listener who
wants me to call her a ny and she has
a question about credit card debt. And I says, first
and foremost, Mandy, I want to let you know I
have been a huge fan of the brown Envision podcast,
a dedicated listener for the past six years. Y'all have
(04:23):
helped me so much with valuable information throughout the years.
I could really use some solid financial advice right now.
I'm carrying a total of eleven thousand, five hundred and
fifty seven dollars and twenty six cents of credit card debt.
I have an American Express card with a twenty nine
point nine to nine percent interest rate, a Capital One
card at twenty eight point twenty four percent, another one
(04:46):
at thirty one point two percent, and my PayPal credit
is at thirty point thirty nine percent. With these high rates,
it feels like I'm barely making a dent in these balances.
Would it be wise to take out a personal loan
with a lo interest rate to consolidate and pay off
these cards and then focus on paying down that loan instead.
I also have student loans, but that's a whole separate conversation.
(05:09):
Thank you, all right, And I that's really expensive debt.
I'm glad that you only have eleven thousand. I know
that that number seems really high, and it is. I mean,
it's a lot of debt, right, but I'm glad it's
not worse, because that can easily double. Like with these
interest rates. There are some interest calculators that you can use.
I know bank rate has one investor dot gov. You
(05:32):
can put this into a calculator and see what's going
to happen to those credit card balances. If you continue
to just pay you the monthly payment and you're not
actually chipping away at that principal amount, it can really balloon.
I actually do think, in my personal opinion, that it
would be wise to take out a debt consolidation loan. Now.
(05:54):
It's not going to eliminate your debt, right and I
don't want you to. This is the hard part when
you pay down those credit cards. If you haven't solved
the root issue, like if you haven't gotten to the
bottom of why you were racking up credit or turning
to credit cards in general, then it's very likely that
you will consolidate it and shift it onto a personal
loan that you can focus on, but that you may
(06:15):
just recreate the same problem a year from now or
even less with how expensive things are. So that's something
to consider for right now when you do feel like
you are bleeding from these high interest rates. I would
start shopping for a debt consolidation loan. I recommend starting
with your local credit union. I recommend shopping around online,
looking for some online lenders because they tend to have
(06:38):
fewer fees and be more affordable. Obviously, read reviews, read
the fine print. There's a lot of great content out
there where people you know will rigorously test and vet
these different products for consumers. I used to work at
a website called lending Tree, Magnify Money, you know Value Penguin,
where it was our job to really like drill into
(06:59):
the fine print of these types of products and help
consumers make educated decisions when they're comparing. So do your
due diligence. The one great thing about credit unions is
they have an eighteen percent cap on their credit cards,
and I believe it applies to loans as well. Also,
credit unions may be more willing to work with you
if you don't have the most, you know, the greatest credit.
(07:21):
And what I want to avoid is, you know, with
these high interest rates, I'm going to guess your credit
score is probably in like the fair category, maybe like six'
eighty mid six hundreds. And it doesn't mean it's impossible
to get a debt consolidation loan, it just means that
you may not save as much as you were hoping. Yeah,
that can be kind of disappointing. And if you get
(07:44):
a debt consolidation loan and the interest rate is maybe
not even that much better than the interest rate you
have in your credit card debt right now, then it
becomes a decision about simplicity and also a fixed rate
versus a variable rate. One of the key differences with
a person alone is that you have a fixed interest rate.
Credit cards have a variable interest rate, and the more
(08:06):
the Fed, you know, tweaks the interest rate and raises
it lowers it, that can impact the interest rate on
our credit cards. It's very well likely possible that when
you first took out these credit cards, your interest rate
was better than it is now, but rates have been
rising and here we are, so with a personal loan,
like let's say it's high twenties in terms of like APR,
(08:28):
which doesn't sound great, but you're not just but at
least you know then the interest rate is going to
be fixed and no matter what the Fed does, it'll stay.
You're also going to get a fixed repayment term, which
means they're going to give you a loan for like
thirty six months, forty eight months, whatever it may be.
And then you know, by the time this time is over,
I'm going to have one monthly payment. It's going to
(08:49):
be a fixed rate, and I know when I'm going
to have this debt paid off. And then you don't
have four different credit cards to keep track of, right
you have like four or five different credit cards to
keep track of. You have that one payment. But I
really encourage you, like to get rigorous and get really
diligent with your tracking of your expenses and your overall
(09:10):
budget because getting to the root cause of what's caught,
what's led to this, you know, five figure credit card debt,
that is what's going to help you prevented from happening now.
And listen, I am not here to judge. It is
so expensive in these streets, and as an entrepreneur, as
a mom, you know, with a mortgage, and y'all know,
(09:31):
I got these kids in daycare and after school activities
and summer camps is coming up. My goodness, I one
hundred percent can see how in just a few months
you can have this much credit card debt and then
it becomes really stressful and it weighs on you. Hey,
ba fam, we got to take a quick break, pay
some bills, and we'll be right back. All right, ba fam,
(09:52):
We're back. So I just want you to know it's
not at all something that you know. And I just
had Asia Evans, a financial therapist, on the show. If
y'all haven't listened to that episode from Wednesday, please go
check it out because we talk about mindset around debt
and how it's important not to put so much focus
or like really like get down on yourself on a
(10:13):
personal level because you have this debt. Like I'm dumb,
I'm you know, I made some poor choices. What's wrong
with me? I should know better. That's not helpful. It's
not helpful. You're probably making the best decision with the
options that you have. And there's this famous quote, at
least for me. In this series Little Fires Everywhere, where,
(10:35):
Carrie Washington's character is talking to Reese Witherspoon's wasp neighbor
character and she's like, Reese Witherspoon's character is judging Carrie's
character for the choices she made about her daughter, and
Carrie Washington is like, you didn't make good choices. You
had good choices, And that says so much about privilege
(10:57):
and about just the fact that we're all out here
doing our best with the plate we have, like the
lot we have in life. And yeah, unfortunately that does
look like putting things on credit that you may not
be able to pay off right away. But let's just
like set that aside. You know, acknowledge that you're doing
the best you can. You're listening to Brown Ambition. You
(11:17):
sent me your question. You know, I really hope that
this is helpful for you and that you can start
chipping away at that debt. And another good thing about
a debt consolidation loan is when you take out that
loan and use that money to pay off these credit
card balances immediately, your credit score should go way up
because your credit score, yes, you still have the same
(11:40):
amount of debt, you haven't eliminated that debt. That personal
loan will appear on your credit report, but it's not
a line of credit. It is a fixed term loan.
It's not a revolving credit line like your credit card
debt was, and your credit score should benefit from that
because revolving high interest debt can drag down your score,
(12:01):
especially when you have a lot of it, you know,
compared to your total available limit you know, utilization rate.
That's how much of your credit card limit you're using
versus how much your limit is. And another sneaky thing
that credit cards do that you may not even realize
when you're someone who is continually racking up and adding
(12:22):
more to your credit card is they will adjust your balance.
So you may think you have like a twenty thousand
dollars limit, but if they see that you are getting
close to hitting that limit and you're not paying it
down in full each month, they can of their own
will just go in there and reduce your your limit
because they're afraid that it's looking like an I may
(12:44):
not be able to pay this off, so let's actually
decrease her limit so she doesn't take on even more
debt that we're not going to get paid back for.
So that can hinder your credit score, because all of
a sudden, you may have five K, you know, on
a ten K card, which which gives you a fifty
percent utilization rate, and that's not great, but it's not terrible.
(13:04):
Then they maybe they chop that limit in half and
now that five k is on a card that has
a five five hundred dollars limit, and now your utilization
is almost at one hundred percent. And so that is
how you know, even these like little things behind the
scenes can be impacting your credit as you are relying
more on credit cards and using those on a revolving
(13:25):
basis and not paying them down in full. So and
I hope this is helpful. I also like, if it
comes down to being a budget issue and you have
cut everything that you can possibly cut from your budget,
then I would say it's time to start looking for
additional sources of income. And maybe once you have a
one fixed rate debt consolidation loan payment to worry about
(13:45):
each month, you can come up with a side hustle,
you know, a way to bring an extra income and
just use that money and say this is going to
be to pay on this debt consolidation loan. And that's
how I'm going to you know, be able to move
forward and create that space in my budget for this
new expense. Hey, bafam, we got to take a quick break,
(14:05):
pay some bills and we'll be right back. Welcome back,
BA fam. Let's get back to the show, all right,
and I think I've said everything I possibly could say
on this. I want to wish you well. I want
to wish you luck, and to our listeners who are
also struggling with credit card debt, I want to hear
from y'all. Could you email me Brand Ambition Podcast at
gmail dot com or dm me at Brand Ambition Podcast
(14:27):
on Instagram and let me know how much debt you have,
how you're managing it, and even if that's the first
time in a long time you have gone and actually
looked at all of your accounts. And just because Mandy
asked you how much debt you have, you don't have
to tell me, but I at least want us together
to hold hands and like, go check our balances right now.
(14:47):
Check your balances, check your limit, see if it's been changing.
You know, it's so easy to get a free credit report,
a free credit score these days online. Probably all your
banks offer some version of that. So let's actually look
at it. I know better than anyone that it's really
easy to just like stick your head in the sand.
It's nice and dark in the sand. You don't have
(15:08):
to look at stuff that stresses you out. But now
I have one of my recent gas rokel Odin from
HSBC Bank. I have her voice in my head like,
look at it. You have to look at it, even
if it's scary. It's not going to go away just
because you're avoiding it, and in fact, it make it
even worse. So I encourage y'all go check out your balances.
(15:29):
If you need a spreadsheet, you're going to use a
tracking app like I do. I use Rocket Money. Do
what you got to do to get all of your
ducks in a row, your financial ducks in a row,
and then we can start strategically paying them down. And
if you're wondering, like mey, hey, Mandy, why didn't you
recommend that? And I just did the debt snowball or
the debt avalanche method, that's also something like if you
(15:51):
really want to tackle this debt and you know you
don't want to take out that personal loan or an eye,
if you go and apply for a personal loan and
you find out that they're not going to give you
an APR that's any better than these credit cards, then
maybe at that point it's like, well, what's the point
I offered you all the pros of a personal loan?
So there still is a case to be made for
(16:11):
taking one out. But if you were just going to
tackle this one card at a time, the interest rates
are all so similar, it might make more sense for
you to take the debt snowball approach where you order
them from the highest to lowest balance or the lowest
to highest balances, and you pay down your smallest balance
first and then you just like let that. You know,
(16:31):
even though it's not going to save you the most
on interest technically over time, it does really help to
get that momentum going and to help give you a
bit of like positive reinforcement to see that progress being made.
I'm interested to hear what you do. Please follow up
with me and ba fan. Thank you so much for listening.
(16:52):
I would love if y'all could take a second to
leave me review on Spotify or Apple Podcasts. It's so important,
especially at its where everything in the economy is a
little Craig crag that includes the podcasting space, So your
support means so much to me. If you haven't left review,
it takes less than twenty seconds to do. You can
you scroll on your app right now find out where
(17:13):
you can leave the review. Leave some kind words. I
do love them. And I'm actually gonna shout out a
reviewer right now because I love reading y'all's reviews so much.
All right, let me go find one. There you go,
all right? From listener WGSSF, she says, yay Moms five stars, Mandy,
I love, love, love your Mother's Day episode with Moms
(17:35):
Reina and Jessica. I love how honest and thoughtful y'all were.
Your conversation was about the difficult balance that motherhood can bring.
Thank you for your candid takes on life and money.
And then listener are and Optional says so good, Thank
you five stars. Eal been listening for years. Mandy is
handling solo hosting with great Brown Tables and continues to
(17:55):
bring amazing guests. I also love how vulnerable she is
in her motherhood season. Keeping it real is how we
support each other. Thank you. That is so so kind.
Ba fam. I read all your reviews. I can't wait
to read some more. Thank you so much. And while
you're at it, shared this episode with someone who you
think might need to hear it and tell a friend,
(18:17):
Tell a friend. Until next time, I am your host.
Mandy Wichard Santos aka Mandy Money, and thanks so much
for listening. Bye okay va fam, thank you so much
for listening to this week's show. I want to shout
out to our production team, Courtney, our editor, Carla, our
fearless leader for idea to launch productions. I want to
(18:39):
shout out my assistant Lauda Escalante and Cameron McNair for
helping me put the show together. It is not a
one person project, as much as I have tried to
make it so these past ten years. I need help, y'all,
and thank goodness I've been able to put this team
around me to support me on this journey. And to
y'all be a I love you so so so so much.
(19:03):
Please rate, review, subscribe, make sure you sign up to
the newsletter to get all the latest updates on upcoming episodes,
our tenth year anniversary celebrations to come, and until next time,
talk to you soon via bye
If you haven't solved the root issue why you were
racking up credit or turning to credit cards in general,
then it's very likely that you will consolidate it and
shift it onto a personal loan that you can focus on,
but that you may just recreate the same problem a
year from now or even less with how expensive things are. Hey,
(00:22):
aba fan, what's up? It's your girl, Mandy Woodriff Santos
aka Mandy Money, your host hostess with the Mostess. I'm
actually here for a classic, a classic Brown Ambition episode,
the Baqa where y'all got questions. I'm going to take
them and give y'all some answers. But just a reminder
if you're new here, this is answers with a lowercase A,
(00:45):
meaning I am not your personal financial advisor. Don't sue me,
don't come for me, don't say well Mandy said I
should do. I am giving you like a besties perspective,
like a really smart, financially savvy financial journalist for over
a decade, podcast host for also a decade, knows a
(01:07):
lot of stuff about money and career, like That's where
I'm coming from here, But at the end of the day,
I don't have all your info. I don't even I
don't you know, I may not know you one hundred percent.
So just take this with a huge grain of salt.
Get your salt shakers out. Okay, now that I've covered
myself legally, let's get into the real real because y'all's
questions are becoming increasingly stressed, increasingly intense. And I got
(01:31):
a question this week from a listener called A n
and she emailed me directly, which, by the way, if
you want to get your questions financial investing, career, whatever
it may be, you can email me Browdambition Podcast at
gmail dot com or slide into my DMS. I'm at
Brown Ambition Podcast on ig. If you want to be anonymous,
that's cool. If you want to use a pseudonym, also great.
(01:54):
If you want me to say your full name so
everybody knows who it is that's asking the question. You know,
it's a to y'all. The point is I want to
give y'all a chance who may not be able to
get access to my coaching program to me one on
one ask your questions. You don't have to go through
hardshit alone, and that is what I'm here for. Okay, Okay,
(02:15):
BA fan, stay tuned. We'll be right back now. Other
housekeeping stuff, what else is going on? We have a
new intern, a new producer intern, BA fan. We want
to say hello to our brand new producer intern, Miss Gabrielle.
Welcome her. And Gabrielle is a upcoming college sophomore at
(02:35):
Syracuse University, which is an incredible journalism program. And this
is a really good example of how if you want
to know, if you want to put yourself in the
room where opportunities can happen to you. Gabrielle is an
incredible example of that because I ran into her. I
met her because she asked a question at an event
that I went to for an author and former guest
(02:56):
of the show, Alencia Johnson, when her book came out
Flip the Tables. Both me and Gabrielle happened to go
downtown to the Barnes and Noble in the Upper West
Side where Alencia was giving a talk, and Gabrielle raised
her hand also she went with her mom, which is
just adorable. She raised her hand, she asked a great question,
and I was at that point where I'm like, I
(03:16):
would love to work with a college student to give
them some real hands on experience in you know, podcasting,
and to be able to help with this brand and
also the youths. I need to connect with the youths.
So I heard Gabrielle's question. I walked up to her.
I was like, okay, tell me about yourself. You said
you went to Syracuse. What's all going on? Do you
want an internship? This was maybe back in February March,
(03:39):
I want to say. So she's like, well, I have school,
but let's talk. And so we talked. You know, she
sent me her resume, her clips. I got to know
her a little bit better, and then I was like,
you know, when do your finals over, can you start then?
And that's exactly what's happened. So she's going to be
with us for the summer and we'll see about the future.
But very excited to give her this opportunity, and I
(04:03):
know she's gonna smash it. All right, So let's get
into today's question, y'all. This is from a listener who
wants me to call her a ny and she has
a question about credit card debt. And I says, first
and foremost, Mandy, I want to let you know I
have been a huge fan of the brown Envision podcast,
a dedicated listener for the past six years. Y'all have
(04:23):
helped me so much with valuable information throughout the years.
I could really use some solid financial advice right now.
I'm carrying a total of eleven thousand, five hundred and
fifty seven dollars and twenty six cents of credit card debt.
I have an American Express card with a twenty nine
point nine to nine percent interest rate, a Capital One
card at twenty eight point twenty four percent, another one
(04:46):
at thirty one point two percent, and my PayPal credit
is at thirty point thirty nine percent. With these high rates,
it feels like I'm barely making a dent in these balances.
Would it be wise to take out a personal loan
with a lo interest rate to consolidate and pay off
these cards and then focus on paying down that loan instead.
I also have student loans, but that's a whole separate conversation.
(05:09):
Thank you, all right, And I that's really expensive debt.
I'm glad that you only have eleven thousand. I know
that that number seems really high, and it is. I mean,
it's a lot of debt, right, but I'm glad it's
not worse, because that can easily double. Like with these
interest rates. There are some interest calculators that you can use.
I know bank rate has one investor dot gov. You
(05:32):
can put this into a calculator and see what's going
to happen to those credit card balances. If you continue
to just pay you the monthly payment and you're not
actually chipping away at that principal amount, it can really balloon.
I actually do think, in my personal opinion, that it
would be wise to take out a debt consolidation loan. Now.
(05:54):
It's not going to eliminate your debt, right and I
don't want you to. This is the hard part when
you pay down those credit cards. If you haven't solved
the root issue, like if you haven't gotten to the
bottom of why you were racking up credit or turning
to credit cards in general, then it's very likely that
you will consolidate it and shift it onto a personal
loan that you can focus on, but that you may
(06:15):
just recreate the same problem a year from now or
even less with how expensive things are. So that's something
to consider for right now when you do feel like
you are bleeding from these high interest rates. I would
start shopping for a debt consolidation loan. I recommend starting
with your local credit union. I recommend shopping around online,
looking for some online lenders because they tend to have
(06:38):
fewer fees and be more affordable. Obviously, read reviews, read
the fine print. There's a lot of great content out
there where people you know will rigorously test and vet
these different products for consumers. I used to work at
a website called lending Tree, Magnify Money, you know Value Penguin,
where it was our job to really like drill into
(06:59):
the fine print of these types of products and help
consumers make educated decisions when they're comparing. So do your
due diligence. The one great thing about credit unions is
they have an eighteen percent cap on their credit cards,
and I believe it applies to loans as well. Also,
credit unions may be more willing to work with you
if you don't have the most, you know, the greatest credit.
(07:21):
And what I want to avoid is, you know, with
these high interest rates, I'm going to guess your credit
score is probably in like the fair category, maybe like six'
eighty mid six hundreds. And it doesn't mean it's impossible
to get a debt consolidation loan, it just means that
you may not save as much as you were hoping. Yeah,
that can be kind of disappointing. And if you get
(07:44):
a debt consolidation loan and the interest rate is maybe
not even that much better than the interest rate you
have in your credit card debt right now, then it
becomes a decision about simplicity and also a fixed rate
versus a variable rate. One of the key differences with
a person alone is that you have a fixed interest rate.
Credit cards have a variable interest rate, and the more
(08:06):
the Fed, you know, tweaks the interest rate and raises
it lowers it, that can impact the interest rate on
our credit cards. It's very well likely possible that when
you first took out these credit cards, your interest rate
was better than it is now, but rates have been
rising and here we are, so with a personal loan,
like let's say it's high twenties in terms of like APR,
(08:28):
which doesn't sound great, but you're not just but at
least you know then the interest rate is going to
be fixed and no matter what the Fed does, it'll stay.
You're also going to get a fixed repayment term, which
means they're going to give you a loan for like
thirty six months, forty eight months, whatever it may be.
And then you know, by the time this time is over,
I'm going to have one monthly payment. It's going to
(08:49):
be a fixed rate, and I know when I'm going
to have this debt paid off. And then you don't
have four different credit cards to keep track of, right
you have like four or five different credit cards to
keep track of. You have that one payment. But I
really encourage you, like to get rigorous and get really
diligent with your tracking of your expenses and your overall
(09:10):
budget because getting to the root cause of what's caught,
what's led to this, you know, five figure credit card debt,
that is what's going to help you prevented from happening now.
And listen, I am not here to judge. It is
so expensive in these streets, and as an entrepreneur, as
a mom, you know, with a mortgage, and y'all know,
(09:31):
I got these kids in daycare and after school activities
and summer camps is coming up. My goodness, I one
hundred percent can see how in just a few months
you can have this much credit card debt and then
it becomes really stressful and it weighs on you. Hey,
ba fam, we got to take a quick break, pay
some bills, and we'll be right back. All right, ba fam,
(09:52):
We're back. So I just want you to know it's
not at all something that you know. And I just
had Asia Evans, a financial therapist, on the show. If
y'all haven't listened to that episode from Wednesday, please go
check it out because we talk about mindset around debt
and how it's important not to put so much focus
or like really like get down on yourself on a
(10:13):
personal level because you have this debt. Like I'm dumb,
I'm you know, I made some poor choices. What's wrong
with me? I should know better. That's not helpful. It's
not helpful. You're probably making the best decision with the
options that you have. And there's this famous quote, at
least for me. In this series Little Fires Everywhere, where,
(10:35):
Carrie Washington's character is talking to Reese Witherspoon's wasp neighbor
character and she's like, Reese Witherspoon's character is judging Carrie's
character for the choices she made about her daughter, and
Carrie Washington is like, you didn't make good choices. You
had good choices, And that says so much about privilege
(10:57):
and about just the fact that we're all out here
doing our best with the plate we have, like the
lot we have in life. And yeah, unfortunately that does
look like putting things on credit that you may not
be able to pay off right away. But let's just
like set that aside. You know, acknowledge that you're doing
the best you can. You're listening to Brown Ambition. You
(11:17):
sent me your question. You know, I really hope that
this is helpful for you and that you can start
chipping away at that debt. And another good thing about
a debt consolidation loan is when you take out that
loan and use that money to pay off these credit
card balances immediately, your credit score should go way up
because your credit score, yes, you still have the same
(11:40):
amount of debt, you haven't eliminated that debt. That personal
loan will appear on your credit report, but it's not
a line of credit. It is a fixed term loan.
It's not a revolving credit line like your credit card
debt was, and your credit score should benefit from that
because revolving high interest debt can drag down your score,
(12:01):
especially when you have a lot of it, you know,
compared to your total available limit you know, utilization rate.
That's how much of your credit card limit you're using
versus how much your limit is. And another sneaky thing
that credit cards do that you may not even realize
when you're someone who is continually racking up and adding
(12:22):
more to your credit card is they will adjust your balance.
So you may think you have like a twenty thousand
dollars limit, but if they see that you are getting
close to hitting that limit and you're not paying it
down in full each month, they can of their own
will just go in there and reduce your your limit
because they're afraid that it's looking like an I may
(12:44):
not be able to pay this off, so let's actually
decrease her limit so she doesn't take on even more
debt that we're not going to get paid back for.
So that can hinder your credit score, because all of
a sudden, you may have five K, you know, on
a ten K card, which which gives you a fifty
percent utilization rate, and that's not great, but it's not terrible.
(13:04):
Then they maybe they chop that limit in half and
now that five k is on a card that has
a five five hundred dollars limit, and now your utilization
is almost at one hundred percent. And so that is
how you know, even these like little things behind the
scenes can be impacting your credit as you are relying
more on credit cards and using those on a revolving
(13:25):
basis and not paying them down in full. So and
I hope this is helpful. I also like, if it
comes down to being a budget issue and you have
cut everything that you can possibly cut from your budget,
then I would say it's time to start looking for
additional sources of income. And maybe once you have a
one fixed rate debt consolidation loan payment to worry about
(13:45):
each month, you can come up with a side hustle,
you know, a way to bring an extra income and
just use that money and say this is going to
be to pay on this debt consolidation loan. And that's
how I'm going to you know, be able to move
forward and create that space in my budget for this
new expense. Hey, bafam, we got to take a quick break,
(14:05):
pay some bills and we'll be right back. Welcome back,
BA fam. Let's get back to the show, all right,
and I think I've said everything I possibly could say
on this. I want to wish you well. I want
to wish you luck, and to our listeners who are
also struggling with credit card debt, I want to hear
from y'all. Could you email me Brand Ambition Podcast at
gmail dot com or dm me at Brand Ambition Podcast
(14:27):
on Instagram and let me know how much debt you have,
how you're managing it, and even if that's the first
time in a long time you have gone and actually
looked at all of your accounts. And just because Mandy
asked you how much debt you have, you don't have
to tell me, but I at least want us together
to hold hands and like, go check our balances right now.
(14:47):
Check your balances, check your limit, see if it's been changing.
You know, it's so easy to get a free credit report,
a free credit score these days online. Probably all your
banks offer some version of that. So let's actually look
at it. I know better than anyone that it's really
easy to just like stick your head in the sand.
It's nice and dark in the sand. You don't have
(15:08):
to look at stuff that stresses you out. But now
I have one of my recent gas rokel Odin from
HSBC Bank. I have her voice in my head like,
look at it. You have to look at it, even
if it's scary. It's not going to go away just
because you're avoiding it, and in fact, it make it
even worse. So I encourage y'all go check out your balances.
(15:29):
If you need a spreadsheet, you're going to use a
tracking app like I do. I use Rocket Money. Do
what you got to do to get all of your
ducks in a row, your financial ducks in a row,
and then we can start strategically paying them down. And
if you're wondering, like mey, hey, Mandy, why didn't you
recommend that? And I just did the debt snowball or
the debt avalanche method, that's also something like if you
(15:51):
really want to tackle this debt and you know you
don't want to take out that personal loan or an eye,
if you go and apply for a personal loan and
you find out that they're not going to give you
an APR that's any better than these credit cards, then
maybe at that point it's like, well, what's the point
I offered you all the pros of a personal loan?
So there still is a case to be made for
(16:11):
taking one out. But if you were just going to
tackle this one card at a time, the interest rates
are all so similar, it might make more sense for
you to take the debt snowball approach where you order
them from the highest to lowest balance or the lowest
to highest balances, and you pay down your smallest balance
first and then you just like let that. You know,
(16:31):
even though it's not going to save you the most
on interest technically over time, it does really help to
get that momentum going and to help give you a
bit of like positive reinforcement to see that progress being made.
I'm interested to hear what you do. Please follow up
with me and ba fan. Thank you so much for listening.
(16:52):
I would love if y'all could take a second to
leave me review on Spotify or Apple Podcasts. It's so important,
especially at its where everything in the economy is a
little Craig crag that includes the podcasting space, So your
support means so much to me. If you haven't left review,
it takes less than twenty seconds to do. You can
you scroll on your app right now find out where
(17:13):
you can leave the review. Leave some kind words. I
do love them. And I'm actually gonna shout out a
reviewer right now because I love reading y'all's reviews so much.
All right, let me go find one. There you go,
all right? From listener WGSSF, she says, yay Moms five stars, Mandy,
I love, love, love your Mother's Day episode with Moms
(17:35):
Reina and Jessica. I love how honest and thoughtful y'all were.
Your conversation was about the difficult balance that motherhood can bring.
Thank you for your candid takes on life and money.
And then listener are and Optional says so good, Thank
you five stars. Eal been listening for years. Mandy is
handling solo hosting with great Brown Tables and continues to
(17:55):
bring amazing guests. I also love how vulnerable she is
in her motherhood season. Keeping it real is how we
support each other. Thank you. That is so so kind.
Ba fam. I read all your reviews. I can't wait
to read some more. Thank you so much. And while
you're at it, shared this episode with someone who you
think might need to hear it and tell a friend,
(18:17):
Tell a friend. Until next time, I am your host.
Mandy Wichard Santos aka Mandy Money, and thanks so much
for listening. Bye okay va fam, thank you so much
for listening to this week's show. I want to shout
out to our production team, Courtney, our editor, Carla, our
fearless leader for idea to launch productions. I want to
(18:39):
shout out my assistant Lauda Escalante and Cameron McNair for
helping me put the show together. It is not a
one person project, as much as I have tried to
make it so these past ten years. I need help, y'all,
and thank goodness I've been able to put this team
around me to support me on this journey. And to
y'all be a I love you so so so so much.
(19:03):
Please rate, review, subscribe, make sure you sign up to
the newsletter to get all the latest updates on upcoming episodes,
our tenth year anniversary celebrations to come, and until next time,
talk to you soon via bye
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