Dear New Frugal You,
I'm in real trouble. A few years ago I got a credit card my husband didn't know about. I managed to run up a balance of over $8,000 without telling him. At first it was only a few dollars and I planned to pay it off. So I didn't say anything. But it kept growing. Now I'm afraid that telling him could ruin our marriage. What should I do? -- Lynette
Wow! That's a tough one. Not only are you dealing with how to get out of credit card debt, but also should you inform your husband of your financial unfaithfulness.
Let's start with the husband aspect. As you already know, it's your decision whether to tell your husband. I'm not a marriage counselor. I'd suggest that you seek one out. You're right that this could potentially be damaging to your marriage. You need expert advice.
Confessing a long-held secret is never easy. Often there are severe consequences. Personally, I advise that partners share major financial decisions. But, given your unique situation, a marriage counselor might have different advice.
Digging out of debt will be easier if your husband can help you. Paying off an $8,000 debt will almost certainly cause some hardship to your entire family. Typically those hardships are more easily handled if they're endured in pursuit of a common goal.
It sounds as if the credit card is not a joint account. If it is, your husband is just as liable for the debt as you are. It could also affect his credit score. When you speak with the marriage counselor, make sure he understands whether it's a single or joint account. It could affect the advice you get. Also complicating matters is that in community property states , creditors can come after your husband because debts run up during marriage are assumed to be the responsibilities of both parties. The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Alaska is an opt-in community property state.
Don't discount the possibility that your husband already is aware of the debt but hasn't known how to bring up the subject. You've been spending beyond your income. That's not easy to hide.
Once you settle on whether to tell your husband or not, it's time to create a plan to repay the debt.
The first thing to do is to make sure that you're not paying more interest than you need to.
You don't say what interest rate you're being charged. According to the CreditCards.com weekly rates survey , the average offer on new cards is about 15 percent.
Consider a balance transfer card. Along with getting the lowest rate on the balance, you also need to stop the bleeding. You didn't mention how you accumulated the balance, but it needs to stop. Whether it's mall, online or other shopping, you need to break the habit now.
Once that's done, it's time to find the money to repay the balance. Begin by looking for big chunks of cash that can be applied to the loan.
If your husband is onboard, you could consider shopping for lower cost home or auto insurance with any savings going to your debt. And look for other underutilized assets that could be sold, such as a camper, boat or a collection.
Next, look for other places you can cut your budget to find dollars for your debt. For most families, food and groceries are the next biggest expense (after housing and transportation). So that's a good place to start.
But even an extra $10 or $20 a month will make a difference. So look at all your expenses with an eye to cut unnecessary ones.
There's no doubt that you're in a tough place. I'd encourage you to take steps immediately to change your direction. This problem will not take care of itself. Ignoring it only adds to your stress and the likelihood that it will blow up your finances and your marriage.
See related: Hiding debt from hubby , Poll: 6 million Americans hide debt from spouse , Who pays secret debt in divorce?