I have a good credit score, last time I checked about 6 months ago it was about 720-730. Recently I have acquired a big credit card debt, about $9,000 on one credit card (with a limit of $10,000) and about $3,000 on another one (with a limit of $5,000) for many different personal reasons. After the whole spending money ordeal was over, I was left with all this debt on my credit cards. Since then, I have cut back on all unnecessary spending, besides the obvious things like food, gas, etc. I have never been late on payments and have never been over the credit limit. I Also try to pay an extra hundred bucks on top of the minimum payment due when I can. Are there any good ideas on how to consolidate these two credit card debts and help me out with all this? Thanks!
How do I go about consolidating my credit card debt?
First of all, consolidating the debts wont really change anything. In fact may adversely affect your credit score.
You need to do the following:
1. Evaluate you interest rates. If you are paying more than 12%, then think about finding a new credit source to consolidate. With your credit score you are probably getting teaser rate offers in the mail. (Beware of a teaser rate that rests after 6 months, as what you save wont be that much) Look for a credit card that will allow you transfer the balances for a long period at a low rate. Many cards offer rates of 5.99 or less for up to 2 years, but also check if there is a transfer fee. This can be as much as 4%)
2. If you find a good card and rate to transfer, then transfer as much as you can from the higher of the two rates you currently have. If you able to transfer all of 3000 debt, do not cancel that card. (Just make sure you dont use it) Having a zero balance and available credit actually improves your credit score.
3. Make a plan. Figure out how long it will take to pay off each card by taking the minimum payment amount (principal only, not interest) and divide into the amount owed. Lets say on the 10,000 card the principal payment is $277, that means it will take 3 years to pay off that card.
4. If both cards have the same rate of interest, but different pyoff dates, put all your extra monthly payment towards the card with the highest % to the credit line (in this case the 9,000 card as that is at 90% of your limit, vs the 3,000 which is at 60% of your limit). The lower the % owed the better for your credit score.
Finally, do not use the cards. Pay cash for everything. (This is very important if you end up consolidating to a lower interest card. Those cards will apply all of your payments to the low interest balance first, and start accruing a high rate on the new purchases. that will go on until the original amount is paid off).
Reply:Try the DiscoverCard. They sometimes offer a 0% interest forever as long as you make the minimum payment and two purchases per month. They have been very good about not changing the terms of this agreement. For my two charges each month I purchase two yogurts or two gas purchases at about 50 cents each. Remember that your minimum payment will be about 2% of the total balance.
And once you have transferred a balance to a 0% balance card, you DO NOT want to use the card unless you have to. The reason being that any payments are applied to the lower APR balance first. So if you transfer to a 0% and then charge an additional $50, the $50 will accrue interest until the 0% balance is paid off.
Reply:your best bet would be a personal loan through your bank or if you own a home taking out a home equity line. Either of these would allow you to pay off those high balances and have a lower interest rate, making your overal monthly payment lower.
Reply:First, let me give my standard warning about consolidation loans.
Many people have fallen into this trap. They take out a loan to pay off their credit cards....then turn around and run up the credit cards again. Now they are in twice the amount of debt, and end up filing for bankruptcy. I have seen this happen many times.
That said...
If you have a home get a home equity line of credit. The interest rate is low, and it's tax deductible.
You can get a personal loan, but trying to get a $12k loan with no security may be difficult.
I'm not sure you will find a credit card with a $10k limit either, but if you can find one with a great interest rate, do that.
For now, pay off that card with the small balance as quickly as possible, then pay off the large debt.
Also don't be afraid to call the credit card company up and ask them to lower the rate. Sometimes you will catch them on a good day, when they are acting human.
Reply:I understand what you are going through, but I did it a bit different than you. I also got into credit card debt, but was able to pay it off by simply transferring the higher interest card balances to ones with 0 introductory for at least 12 months and a low fixed rate afterwards (8 % instead of the 20 something bank of america gives you!) So you can pay it off faster. Frankly, I didn't want to get into loans (imho some are way too high interest) and with the newer credit card I only ended up paying about 167 dollars of interest on a 4,200 dollar debt. The only thing you should make sure is DO NOT be late on a payment..doing so will raise your interests rate to a ridiculous rate.
Reply:Go to your bank and get a small loan for as much as you need and then pay off the two credit card companies...and it sounds like you have all your ducks in order concerning any spending habits, etc. If you have collateral, it would help for the bank purposes. Good luck...(If that doesn't work, maybe an arrangement with a family member for a loan (get it done by a lawyer) would be an option.
Reply:Bad credit debt consolidation provides many benefits to the borrower like:
Unification of all debts into a low interest rate loan
Saving money that is paid as interest
Hassle-free processing
No harassment by lenders
Improvement of bad credit history
Bad credit debt consolidation can be obtained in two forms, secured and unsecured. Something many of us seek when we’re unable to get past all the credit debt which as piled up. Indeed, as the national credit debt burden grows, many creditors are pleased to work with people interested in resolving their debts.
for information on current lenders you can check out:
http://www.insightempire.com/badcredit.h...
Reply:My husband and I use a company called The Freedom Point. What they do is work with your creditors to lower your interest rates. You can not spend anything on either account while it is part of the program. It does NOT negativly affect your credit score. We pay TFP our set payment each month, and they distribute it to our creditors. You're doing better than us, our debt on the plan mounts over 30,000.... but we're on track to be debt free on less than 4 years. They can most likely set you up with a plan to get you out of debt quicker than that, it just depends on what you are able to afford to pay. They're available online.... or you can call them. Good luck hun!
Reply:you get a credit card that will consolidate all you others into one payment. they will pay off all the other cardds and close them so that you will only have one payment to make on the new card.mose major banks offer consolidations. check out some that says 0% intrest for a year like chase. this should able you to pay it off sooner.
Hope this Helps.
Reply:do a transfer balance on a new card at 0% for a year or so paying what your minimums are on cards with a higher rate. this will get them paid off faster, if you have good credit...they will give you a longer 0% transfer period
btw..chase sucks. their customer service is bad. phone time is like 15 minute wait
Reply:The Credit Score (also known as your MyFico score) is calculated with the following breakdown:
* 35% - Payment History
* 30% - Credit to Debt Ratio
* 15% - Credit History
* 10% - New Credit
* 10% - Credit Types in Use
The best is a smal personal loan consolidation. I found interesting information about your answer %26amp; options here. Goodhttp://all-debt-consolidation-loan.blogs... luck!
Reply:Transfer the debt to another card that gives you 0% APR for 12 months. The transfer itself will probably cost you 3% of the debt amount.
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