“She trusts me completely”: my sister offered to pay my credit card bill. I will repay it over the next 4 years. Am I taking advantage of our relationship?

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Dear Quentin,

I have little money. It’s strictly my fault. I have accumulated a credit card bill, and it is almost sold out. I’m nearing the end of the interest-free period. My sister, thanks to hard work, is very well off. She trusts me completely and volunteered to lend me the money because she hates paying interest and doesn’t want me to pay it either.

I agreed, and although she said it wasn’t necessary, I had drafted a contract that I planned to have notarized shortly before taking the money. I now have doubts about borrowing the money. It would take me four years to pay it off. What if something happens during this time and i am unable to keep up with the payments?

She has no fixed monthly payment. I chose an amount. She would give me the balance because that’s the kind of person she is. I would feel bad if it came to this. If I don’t accept his offer, my once good credit will stay bad and it will take me longer to pay it off, but I wouldn’t feel as bad about falling behind on payments to a business as if it were my sister. What should I do?

Sister in debt

Dear sister,

Your sister offered you an interest-free loan. Take it. The average interest on a credit card is 16.2%. If you had a $ 5,000 credit card balance and only paid $ 250 each month, it would take you two years to pay it off and cost you $ 867 in interest.

Tough Love: Stop spending money on things you can’t afford and ask yourself why you racked up credit card debt that you couldn’t pay off. Otherwise, history will repeat itself. If it’s a budget issue, start now.

If you’ve been using your credit card to fill a bigger, more empty space in your life – and you could be forgiven for feeling like you’re on your low or lonely over the past two years – ask yourself how you can become more connected. to others.

Consider reaching out to people who may be more isolated and / or at a lower level than you – an elderly relative or neighbor – and ask them what you can do to help them. It will do more for you than any Amazon package.

It was smart to suggest a notarized loan agreement and not leave it up to your sister to talk about it. It offers security if the borrower / creditor relationship has deteriorated or, thought to be, the borrower has died in the meantime.

Do not worry. Your sister trusts you to pay that money back on time, but she doesn’t want you to make an anxious sandwich between the credit card company and your sister. Your sister loves you. She wants to help you.

If anything good came out of this business, let it be.

Yoyou can email The Moneyist for any financial and ethical questions related to the coronavirus at [email protected], and follow Quentin Fottrell on Twitter.

To verify the private Facebook Moneyist group, where we seek answers to life’s toughest money problems. Readers write to me with all kinds of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Monetary regrets not being able to answer the questions individually.

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