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Friday, May 24, 2024   

Helping a friend with debt
by Scott Bilker
Scott Bilker is the author of the best-selling books, Talk Your Way Out of Credit Card Debt, Credit Card and Debt Management, and How to be more Credit Card and Debt Smart. He's also the founder of DebtSmart.com. More about and DebtSmart can be found in the online media kit.
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Scott Bilker

Hi Scott:

First, thank you so much for what you do--it has already helped tremendously in the situation I'm writing about. I first found your name and website from Consumer Reports, which is why I trusted you from the outset--they're one of the few consumer sources I trust to steer me well.

My best friend (yes, really, a friend, not me) is having severe credit card debt problems after a period where he had to use the cards after being laid off and having difficulty finding work and also unexpected medical bills that accumulated during his time off work. He has a balance hovering around $33,000.00. Using your suggestions I have helped him get reduced (temporary) finance charge percentages and have transferred some of the debt to lower interest cards (by calling his credit card companies and applying for zero percent cards), so his payments are paying down the debt better than they were. He's paying MUCH less in finance charges at this point (thanks to you!).

The problem is, while he is currently able to make the monthly payments (and, ironically, he has a spectacularly positive payment record--he has NO late payment history at all) he is BARELY able to do so--his new job pays just enough for rent, food, basic supplies, and his credit card payments (he lives and works in an urban area and does not have/need a car), but the fact that he has no margin for saving money or paying down the balances (beyond the minimum payments) is setting him up for even more problems down the road.

Should he seek credit counseling or debt reduction? He doesn't really qualify, from what I've read at your site, for debt reduction because he's not delinquent with his payments at this point.

The pressure from all this is really dragging him down, and he keeps plugging away at his new job (he's been there almost a year now, and he's well-loved there) but really does feel as though he's just treading water, not really advancing. Plus he literally has no "spending money" beyond the basics, which also wears on him.

Any suggestions you can offer would be GREATLY appreciated by me as well, as it's tough to watch a good friend (or anyone, for that matter) go through this.

He has very solid values and wants to do the right thing and pay this off, but he fears he never will be able to (he's 46, by the way).

Thanks Scott,
John G.


You're welcome. Glad to hear that DebtSmart.com is helping.

It's great that you're helping your friend with his finances. I always tried to help my friends if they asked, and that's how I got started writing about credit cards and debt management.

Moving all his debt to zero percent is the best place to start. That's the most efficient action to take because you save the maximum amount of cash in the least time by negotiating with banks. And if that doesn't work, then transferring to new cards with low rates is next. (My recommended card list is at http://www.debtsmart.com/cards/.)

I wouldn't suggest he seek credit counseling or debt settlement. He's doing a fine job right now. He is in a tough position, but it's okay because he's making all his payments on time and is able to pay all bills and living expenses. He may not be able to save, however, by paying off his debt, he is saving. He's saving on interest charges. The money that went to the credit cards will be savings when all the debt is paid off.

I would suggest that he pursue ideas that generate income. Focus extra time on thinking of a side business or online business. Think about going back to school (online) to advance in his current field or jump ship into another career. He may also qualify for government loans to go back to school. He should ask his employer about education reimbursement and what he would need to do to advance. In other words, he needs to increase his income.

Help him generate ideas that make more money. I'm sure that he's had some in the past and maybe you've had some ideas for him as well. Simply provide the encouragement and confidence to get him to take action in that area.


Dear Scott:

Thank you so much for the quick reply and the ideas and words of encouragement. I will pass these along to my friend and will let you know how it goes.

And yes, I will continue to help him as best I can, too.

In that vein, do you have any reliable references/resources for brainstorming ideas on available online businesses? I've certainly seen plenty of advertising for same (especially infomercials), but how do you know who to trust and what businesses actually are successful and generating real income?

I would be interested in supplementing my own income with an online business as well, since my current job (which I mostly love) requires me to be available on a flexible schedule 7 days a week, which prevents me from taking on a second job since I cannot commit to any fixed hours elsewhere. But with current inflation income has fallen behind my living costs, and I definitely could use a supplemental income.

Again, thank you so much for what you do--I know you hear often how much it means to people, and you can add my friend and myself to that group of fans.

John G.


You're welcome!

You should be wary of infomercials that talk about making "easy" money. The only easy money is the money they're making selling the program. There may be some that are good, but they're hard to find.

I'm talking about developing your own ideas. Finding a need and filling that need. We've all had the experience of saying "hey someone should invent this..." and then maybe a few years later you see that in the invention in the mall.

Or you may think of a service that people need. Or maybe just break away from you current company and be their competitor. A close friend of mine did that and started his own pest control business and now he lives in a million home in Central New Jersey!

PS: I have quite a few great articles posted that talk about earning more money.
You can find them listed here.


Thanks--my gut has usually steered me away from infomercials in general, so your opinion on same only reinforces that feeling.

I will sit down with my friend and brainstorm, will do the same on my own, and will check out the articles you linked me to.

Again, thanks so much!!

John G.



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