This article comes from Austin Morgan. Austin lives in Japan where he teaches English and runs Foreigner’s Finances – a personal finance blog with an international twist for twenty-somethings and college students. Austin is a newcomer here on Credit Card Chaser.

Editor’s Note: Have you ever wondered how you could discuss your friend or family member’s credit card debt problems without offending them? Austin has some great tips for how you can approach this potentially very tricky situation. As a former English teacher in China myself I would encourage you to read through this article and then be sure and visit Austin’s site at ForeignersFinances.com, subscribe to his RSS feed, and then be sure to check out our true cost of credit cards calculator to see just how much carrying a credit card balance can really end up costing you!

Talking About Credit Card DebtWe all want our family and friends to be happy. There’s nothing worse than watching someone close to you struggle with a demon in their life. What’s even worse is watching a loved one hurt themselves unknowingly.

According to MSN Money, about 45% of households carry credit card debt from one month to the next. Chances are you have someone close to you who is drowning under credit card debt, and they don’t even know the price they’re paying.

For example, if you carry $3,000 of credit card debt on a card with 19% APR, it’ll take you 26 years to pay if you only pay the minimum. What’s worse: you’ll pay $7,896 just in interest!

I had a good friend who often discussed his money troubles in public.

Through his stories I could piece together that he paid the minimum on his credit card every month and his paycheck was disappearing fast every two weeks. It appeared he had no savings and was just banking on making more in the future to make up for his money troubles. He also continued to spend extravagantly on a new video camera, a nice car, and nights out to expensive clubs.

At the time, I had just started learning about personal finance and decided this was going to be my chance to put my knowledge to use. I could save him tens of thousands of dollars if I got to him early before the debt consumed him even more.

One night I sent him an email saying I’d like to help him out with his money troubles by looking at the numbers and seeing how we could figure out a way to get rid of his debt.

After I clicked send I felt awkward after sending the email. I didn’t know if it was my place. The next day I saw him and he seemed thankful, but rushed by saying, “I don’t have my accounts right now, but we’ll discuss it later”.

Based on his demeanor, I knew he wasn’t ready to discuss money yet, so I said “yeah, definitely” and we never discussed it again.

My first mistake was rushing to try to fix the problem. I immediately put him on the defensive by saying, “I know you have a problem, let’s fix it”. I believe he knew he had a problem, but I don’t think he was quite ready to fix it.

Before you go all Dr. Phil/Oprah/Suze Orman on people’s money problems, understand that there won’t be any change unless the person wants it.

So how do you help out a friend or family member who is struggling with credit card debt, but doesn’t know it?

You be a social sleuth.

Wait for the right time to bring it up. Don’t do it at a party or anytime there are other people around. Wait until you’re one-on-one with the friend. Perhaps over lunch, casually watching TV, or in the car together.

Let them mention their money problems. Like I said earlier, my friend occasionally mentioned his money troubles. Wait until they are admitting there is a problem and this will be your best time to help because there natural self-defense walls will be lowered. The perfect time to suggest change.

Once they mention their troubles, offer suggestions for furthering education and knowledge. Only mention A+ stuff that you’ve had experience with. The stuff that turned around your financial life is a great place to start.

Put them in your shoes, by showing how you turned your money situation around. Don’t gloat about your success, but empathize and suggest that they too can experience a money and debt turnaround.

Mold your suggestions to their favorite medians. If they like reading, offer your favorite personal finance book. If they prefer blogs and short reading, offer 2-3 personal finance blogs that you like. If they are a video person, find a good YouTube video that’ll help them.

If they show ANY interest at all in fixing their problem, offer to provide the medians. You must do the work for them because it’s too easy for them to avoid following up on your advice.

- Email them the links to the blogs

- Buy the personal finance book and give it to them the next time you see them

- Send them the YouTube link to a money video that’ll peak their interest

Your suggestion has to be eye-catching or else they’ll get distracted and move on to something else. Suggest something that makes them go “wow, I need to change how I handle my money”. If you can get them to say this sentence, you’ve done your job and they’ll be eternally grateful.

After this, they can explore the new information on their own. If you’re lucky, they’ll mention how much they liked the video, book, or blog, and hopefully you will see the money light go on above their head.

You can only do so much in the beginning stage without smothering.

Show them there’s a way out.

People don’t realize how many medians there are for money education. But if you have the possibility to suggest even one, it can potentially open their eyes to a financial world they didn’t know existed.

Remember: be patient, wait for them to bring up their money troubles, offer (don’t tell) a suggestion that suits their interests, and then step aside and let them explore.

This formula isn’t guaranteed to work, but it’s a soft approach to handling a rough topic. You don’t want to hurt your relationship with the person, so be patient and gentile with how you offer the information.

Good luck!

Have you successfully helped someone close to you learn about money? Ever tried and failed? Share your stories in the comments below!

Make sure to check out Foreigner’s Finances today!

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Austin lives in Japan where he teaches English and runs Foreigner's Finances - a personal finance blog with an international twist for twenty-somethings and college students. Austin writes on anything from saving money while in college to starting a part time job to help earn money for school expenses.

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One Response to “How to Discuss Your Friend’s Credit Card Debt”

  1. Great tips! My wife and I have some siblings that could use some guidance but, as you said, it’s not an easy thing to bring up.

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