Card Consolidate Credit Debt Into Loan One

Together we have 10 credit cards totaling up to about 12,000 in debt. It is so hard paying 10 different companies.. Should I take a loan out, pay them off, then pay on the loan? I need advice.

Shifting all the credit card debt to one big loan isn't such a good idea. While you might have only one payment and maybe even a better interest rate, folks tend to run those credit cards right back up. Then you have the big loan payment and the credit cards to pay.

Instead, you should work on paying off all that credit card debt. Take every penny you can squeeze out of your budget and throw it at the highest interest rate credit card, while making minimum payments on the rest. When the highest rate card is paid off, move to the next till they are all paid in full.

Find ways to bring in extra cash -- have a garage sale, collect alum cans, get a second job. Throw it all at the credit card debt.
If you really work at it, you can pay it all off within 2 years.

Once you get those credit cards paid off, only charge what you can afford to pay in full each month. You may want to close some of those accounts, particularly store and gas cards.

2009-03-21 12:07:52 by xoxo

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I have 12,000 in credit card debt. I have 5,500 on one card and about 6,500 on another. The main reason I am so in debt is because I had to live off one of my cards in the month after I graduated from school and I have had to do car repairs and security deposits since then. I have a good paying job (I net around $730 a week after taxes, insurance, etc). However, I have only been at this job for a little over 4 months and I don't have great "job stability" according to places I have inquired about loans because I have been on the job for less then a year.

My question is, should I consolidate all my credit card debt into one loan that is a lower percentage and one easier to handle payment? (One card is at 9.9% and the other is at 0% for a little less then a year but the payments are hard to handle) If so, how would I get this loan when the only thing of value that I have is my car (worth between 3000 and 4000)?
P.S. I own the car title free and clear

Here is a plan that can help you. If you work the plan, the plan will work for you:

A. Have a garage sale and sell anything that you no longer need/use
B. Do NOT do a loan consolidation. It will show up to be almost as bad as a bankruptcy on your credit report.
C. Consider getting a temporary part time job. Many places are hiring now for the holidays. If you can bring in an extra $1,000 per month, then you can dump all of this debt in less than a year. It is better to have a no fun year than a no fun decade.
D. You are netting close to $38K per year now. Keep a spending journal for the next two weeks or a month and write down every penny that you spend. I am sure that when you look through that journal, you will find lots of things that can be cut from your budget.

1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Put everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an "emergency fund" category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don't even have to worry about it. You must cut your spending and live on less than you make.

2.First get current on all of you debts, if you are not already, and make no more late payments, if you have had any. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.

3.Pay the minimum due on all of your debts and then put your extra money towards paying off the highest interest one first. After you get that one paid off, you put the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off faster. When that is paid off, you put all three payments towards card #3 and that one will be paid off pretty quickly. As an example:

To start :
Debt #1 (highest interest): minimum payment+ extra payment
Debt #2 (middle interest): minimum payment
Debt #3(lowest interest): minimum payment

Debt #1: paid off
Debt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra payment
Debt #3: minimum payment

Debt #1: paid off
Debt #2: paid off
Debt #3:Mimimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.

That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late payments. This works no matter how many different debts you may have.

4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Put that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.

5a. When you have your emergency fund in place, add a category for "fun" to your budget. Save for a holiday, a vacation, a big screen, or dinners out, whatever goal you want. Remember to enjoy your life.

5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money? Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.

5c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.

You can do it and it isn't as hard as you think. Just follow the plan.

2008-10-31 10:02:30 by Rae

I have a credit score of 570ish and I want to get an unsecured personal loan to consolidate my credit cards into one payment....what are my options if i dont want to use a debt consolidation or settlement company
Are there any banks that anyone knows of that would approve me...i dont have a cosigner or a car or house to borrow against either.

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2008-06-09 14:15:55 by Me

Need help and ideas for what to do with credit card debt.

I’ve posted before, but for some reason the post was removed from the site.

I have about $20,000 in credit card debt. When I called a bank to talk about consolidating credit cards into one personal loan, they said it would depend on my credit score.

So I have a high amount of debt and a ok credit score, transunion reported showed 590, but another report from experian showed 670, so I don’t know what is right.

so if I am right about this, the bank will not give me a loan because of a “OK” credit score, but the credit cards are slowly going down and I am paying a high interest rate.

How can I get out of this catch-22 situation ? without ruining my credit-score. I also found out that doing one of those ‘debt consolidation’ programs can negatively affect your credit score and make banks look the other way down the road because they can see you did that.

Thanks for any ideas.

It will probably be impossible for you to obtain a debt consolidation loan. Banks are being very strict these days. Your 590 score is considered poor and your 670 is only fair. Therefore, there's really no incentive for a bank to assume the risk.

Your best bet is to continue making all your payments on time. You should also eliminate any wateful spending. Most importantly, stop buying things on credit. It's a good idea to keep one card in your wallet in the event of an emergency. Other than that, leave the plastic at home.

2009-09-11 15:15:41 by Keeping Anonymous

I have a bunch of credit card debt and am looking to consolidate it. I don't use my credit cards anymore and i have a perfect payment history on all my accounts on my credit report. Never one late payment on anything. I am looking for some way to consolidate the credit cards to one loan with a reasonable interest rate since some of my cards are very high interest( over 21% for one of them). The problem is being in a lot of debt i dont get enough credit when i apply anywhere to transfer the balances. I have some equity in my home but not nearly enough to tap into it or i could risk being "upside down in it" Does anyone have any suggestions how someone with a perfect payment history but hight debt to available credit ratio can consolidate?
It is nice for people to try to help but i dont even know if the person who replied read what i said. I dont need my credit repaired i have a perfect credit history just lots of debt.

I'm in debt management and if you've never missed a payment then your best bet would be to call each credit card and ask to see if you could get onto an internal program. That will lower your interest and maybe even the payment. Keep sending the same amount don't send the lower payment obviously. But the internal programs are for a limited time only so ask how long it will last. Before you do that, you may want to check how much more you could pay a month. The other would be to consolidate with a debt management company but that would close all the accounts. I wouldn't recommend it unless you feel you can't afford the payments and expect to start struggling. We help with credit counseling if you would like.

2008-04-27 11:53:29 by crappa