Pay Dirt is Slate’s money advice column. Have a question? Send it to Athena and Elizabeth here. (It’s anonymous!)
Dear Pay Dirt,
I have a dilemma regarding my husband and my credit score. At the holidays, I took out a department store card. I never received the card, nor did I receive any billing statements. I wrote to the store through its website in December and January and never received a response. My credit score was 750 at that time. I found out that it has dropped over 100 points. I found a bill from the store dated in June just this week when I was looking for mortgage information. The bill had dropped behind my husband’s desk and was under the baseboard heater. My husband is asking to separate, but I think he is deliberately trying to ruin my credit in advance of doing so. How do I proceed now? Do I just pay the bill? Do I try to speak to someone? Do I go to a credit bureau to fix things? My husband denies everything, but I do not believe him.
—Hung Out to Dry
Dear Hung Out to Dry,
The first thing you need to do is call the company, explain what happened, and close the card. If you signed up in-store with an initial purchase, you knew you had a balance on this account, and I’d recommend trying to negotiate this amount down as best you can. It is frustrating that no one replied to your online inquires, but you should have called the customer service hotline after you did not receive a response. If you didn’t charge anything when you opened it, report the fraudulent purchase when you call the company. The company has so many days to reverse the charge. If that doesn’t work, write to the credit bureaus. You will need proof of your communication with the company and all the steps you’ve tried to take to fix it. You’ll want to keep all records throughout this process, as well as figure out a better system for monitoring your bills going forward.
Then you’ll want to obtain your free annual credit reports from the three bureaus and go over them with a fine-tooth comb. A 100-point drop in your credit score is pretty significant, and you need to be fully aware if there’s anything else that has contributed to this. If any debt has been taken out in your name by your husband, it’s better to know now than before divorce proceedings happen. Different states have different laws on how debt is handled during a divorce, so you’ll want to ask your attorney about this. You may also want to temporarily freeze your credit and change your passwords on any accounts that aren’t shared. Good luck.
Dear Pay Dirt,
I’m the writer who reached out about the prenup. I really appreciated your response! I’m going to use my company’s EAP to discuss with a lawyer, and my fiancé and I have had a robust conversation about discussing the intricacies of our financials with family members.
All of which is to say, now he has a question on the specter of student loans. I have none, and he has $35,000. He is under no illusions that Joe Biden will pay off his loans, nor does he expect me to contribute (and would be mortified if I tried). But he has not been paying his student loans during the COVID moratorium and is in no rush to exceed the average amount he pays monthly (over $300, including interest) once that resumes—even though he has $15,000-plus in savings.
I get it, savings are hard-earned. But the fact of the matter is the minuscule amount of interest he earns by keeping that money sitting in the bank is being outflanked by the interest accumulating on top of his student loans. Wouldn’t it be better to take a good chunk of that savings to pay off the debt? I’m not suggesting he sign over the contents of his account, but surely it’d pay to get more of that debt off his plate? His other finances are in order. Or should he just increase his monthly payment?
—My Fiancé Is Rolling His Eyes as I Write This
Dear Rolling His Eyes,
Aaaah! I’m so excited to be hearing from you again, and I’m happy that the response was received well. It sounds like it opened dialogue for a positive financial conversation, which is just what that situation needed!
Now, let’s get to the student loans Biden won’t pay. Your fiancé is correct in refusing to liquidate his savings account to pay his student loans. You are absolutely right in saying a few thousand dollars will affect how much he pays over the lifetime of his loan. But right now, I wouldn’t recommend it. If the past year and a half has taught us anything, it’s that our economy can be flipped at a moment’s notice. It’s now more important than ever to ensure you have an emergency fund that can cover three to six months of expenses. It’s fantastic that he has $15,000-plus, but I wouldn’t touch it.
There are still a few ways he can lessen the amount he’ll pay over time. You already mentioned one thing: increase his monthly payments. He can start with the debt snowball method, and once he sees how quickly the extra payments add up, he’ll be tempted to increase his payment amounts even more. (This is an especially good strategy if he’s already hit that six-month mark for emergency savings.) He can also look into refinancing his student loans, possibly lowering the interest rate. And finally, he should make sure his savings are parked in a high-yield account. Let me know how it works out!
Dear Pay Dirt,
My dad died when I was in elementary school. I received a modest amount of life insurance money, which my mom put into an investment account. She would withdraw money from this account to pay for things on my behalf—like clothes or the private school she insisted on sending me to. She chose not to work, and her new husband was often unemployed or underemployed. We basically all lived off my Social Security survivor’s benefits. She cut me off financially as soon as I graduated high school and the benefits stopped (so maybe I cut her off financially?).
Although I lived very frugally, by the time I finished college, the account had dwindled to almost half of what I had originally received, but I haven’t touched it since. Now the balance is almost back to the original amount I received from my dad.
I am not very financially literate, but my husband is. He has invested wisely in the stock market, so much so that he could retire now if he wanted to (he’s in his early 40s). I honestly feel like he could invest my money as wisely, if not better than the mutual fund, but I have an emotional attachment to this money, because it’s basically all I have left from dad. Also, due to COVID, I haven’t been working to be able to watch our children. I like having my own nest egg, especially since I know all too well that something could happen to my husband at any time. In case things go south for whatever reason, I would at least have enough to get by for a year or two.
I think part of the reason for my hesitancy to let my husband invest my money is because of the financial abuse from my mom, and I also would be devastated if something happened to it because it came from my dad. I fully trust my husband, but I just keep hitting a wall when trying to decide what to do with this money. Should I leave it in the same account, let my husband handle it, or do something else entirely?
Dear Blood Money,
I’m sorry your father died when you were so young. My mother passed away my freshman year of high school, and I had family who used me for my Social Security checks. It sucks. But please know that your mom financially cut you off, and not the other way around.
Because of the history of financial abuse you’ve endured in your past, wanting to keep your nest egg away from your husband is completely justified and understandable. All women should have their own money set aside, whether they are happily married, eyeing the exits, or a cat lady of one. Marriage does not equal financial security, especially for a woman. Anything can happen, and you want to have your own money that is easily accessible.
I think you should hire a certified financial planner to help you go over your inheritance and develop an investing strategy that you feel comfortable with. CFPs can be either fee-based, where you’re charged a flat fee for using their services, or they can earn commission off of financial products they sell or manage for you. I would start with a CFP who will regularly manage your portfolio and work with you to develop a financial strategy that you feel comfortable with. (You can ask friends or search local social media forums for recommendations for trustworthy CFPs, too.) I’m excited for you and your new investing journey!
Dear Pay Dirt,
Since graduating from grad school in 2011, I’ve been working full time for the same nonprofit and steadily paying my federal student loan bills (until the COVID reprieve that started last year). I’ve been paying the minimum each month, which barely scratches the interest. I am hoping my loans will be forgiven under the Public Service Loan Forgiveness program within the next year.
My loans are $92,000—almost $20,000 higher than they were when I graduated. And I just found out my loans are about to be transferred to a new loan holder. The last time that happened, I “lost” a year or so of qualifying payments, setting me back another year and causing me great anxiety. I don’t want this to happen again; frankly, I don’t want to pay any more than I already have! It has been a huge weight around my neck, directly preventing me from saving money, owning property, starting a family, or moving out of the nonprofit sector for fear of losing loan forgiveness. (Yes, I regret believing that I needed this degree—big time.) If loan forgiveness fails me, I see no way out of this hole. I would love to find a trustworthy student loan counseling service to help me navigate this, and I see businesses offering help but am not sure which ones to trust. I’ll soak up any advice you have for me.
—Trapped in a Bottomless Pit
The issue with the PSLF program is that one day it may no longer exist. There are millions of others who are hoping that the program will still be around when their loans are up for forgiveness, so you’re not alone in your fear of being stuck here forever with this debt.
When your loans were transferred to a new servicer, this should have been accurately documented in the National Student Loan Data System. The information is usually available within two weeks of the loan transfer, so by the time you were notified, your payments should have been correctly documented for the PSLF program. Was there a gap in the paperwork sent to the Department of Education? I bring this up because if it was a fault on the servicer’s end and not yours, you could potentially get those payments credited toward the amount you need for the forgiveness. It’s worth your time to pick up the phone and try to get some answers.
If that doesn’t help, I recommend making an appointment with the National Foundation for Credit Counseling. It is the largest nonprofit credit counseling center in the United States and helps those with credit issues as well as student loans. I would ask for guidance on the PSLF program, the missing payments, and how to approach the student loan debt before trying to refinance with a private lender or any other options that might pop up on your targeted Google results. NFCC also may be able to point to other programs or resources that can help. And remember: You’re not alone.
Introducing the How to Do It Podcast
Your wildest sex advice questions are now being answered in your headphones. Listen to new episodes with Stoya and Rich every Sunday, with exclusive episodes for Slate Plus members on Mondays.