‘She trusts me completely’: My sister offered to pay off my credit-card bill. I’ll repay her over the next 4 years. Am I taking advantage of our relationship?

Dear Quentin,

I have little money. It’s strictly my fault. I ran up a credit-card bill, and it’s nearly maxed out. I am nearing the end of the interest-free period. My sister, through hard work, is very well off. She trusts me completely, and volunteered to loan me the money because she hates paying interest and doesn’t want me to pay it either. 

I accepted and, although she said it was unnecessary, I had a contract written up that I planned to have notarized shortly before I take the money. I am now having second thoughts about borrowing the money. It would take me four years to pay her back. What if something happened during that time resulting in my not being able to keep up on the payments? 

She has no set monthly repayment. I chose an amount. She would gift me the balance because that’s the kind of person she is. I would feel terrible, if it came to that. If I don’t accept her offer, my once good credit will stay bad and it will take longer to pay it back, but I wouldn’t feel as bad getting behind on payments to a company as I would with it being my sister. What should I do?

Indebted Sister 

Dear Sister,

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

Some tough love: Stop spending money on things you can’t afford, and ask yourself why you racked up a credit-card debt that you were unable to pay off. Otherwise, history will repeat itself. If it’s a question of budgeting, start now. 

If you’re using your credit-card to fill a bigger, emptier space in your life — and you could be forgiven for feeling at a low ebb or alone these 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 ebb than you — an elderly relative or neighbor — and ask them what you can do to help. It will do more for you than any Amazon package. 

It was smart to suggest a notarized loan agreement, and not to put the onus on your sister to bring it up. It provides security if the borrower/creditor relationship deteriorated or, perish the thought, the borrower passed away in the meantime.

Don’t beat yourself up. Your sister trusts you to pay this money back in a timely manner, but she doesn’t want you to make an anxiety sandwich between the credit-card company and your sister. Your sister loves you. She wants to help you.

If anything good has come out of this affair, let it be that.

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