The Wrong Payoff Plan

Judy heard some advice from Jim Cramer about doing a settlement on your credit card debt, but Dave's not sure he agrees with it.

QUESTION: Judy heard Jim Cramer talk about transferring all your credit card debt to one card, then call them and work them down to a settlement offer. Can you do that? Dave doesn’t like that plan; he’s got a better one.

ANSWER: Jim Cramer is a very smart man, but getting out of debt is my part of the equation, and he’s wrong. You don’t want to take his advice on that. The best way to work yourself out of debt is to use the debt snowball, like we teach around here all the time. Live on less than you make and pay off your debts in the smallest to largest order. Don’t try to mess someone over doing that, which is what this plan is.