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need advice from those who have consolidated their credit card debt!


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Help! I am really not sure under what category to post this but I have a lot of credit card debt and want to use a debt consolidation company but I am VERY HESITANT to do so. It is very hard to know who to trust and I am terrified of putting myself in an even worse situation financially. Can anyone provide any feedback on this? I know the basics... such as the fact that I need to check with the Better Business Bureau, etc. to see if the company has alot of complaints or has not been around for a long time, etc.

 

Whether you have done it with positive or negative results- I am very interested in hearing about your experience. Please help! Thanks!

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Hands down the best way to handle it is the following (in my experience at least):

 

1) Make IN-FULL payments. That means, save up to pay off one credit card at a time. I am doing this now and I should be out of $10,000 debt by next year.

 

2) ONLY POSSIBLE WITH HIGH FICO SCORE -- Apply for 0% balance transfer (with no transfer fee) credit cards and start moving your balances to them. Most credit card companies offer 6 to 12 months of 0% before the interest starts accruing. Once those 6 to 12 months are up, move it to a new credit card.

 

3) Apply for a personal loan from you bank. Again, you need a high FICO score, stable employment, and a history with your bank.

 

No matter what you do, getting out of debt is hard. Your spending habits need to go poof NOW! You need to watch your money and EVERY penny of it.

 

Make sure you know where all of your money is going.

 

Another thing, debt consolation hits your credit pretty hard if you do it incorrectly. Make sure that you have a legitimate company helping you, or you could be hurting for the rest of your life.

 

Best of luck to you!

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I am past the point where I can make an in full payment on any credit card in one shot. It is also not possible for me to get any more 0% credit cards. My debt is high enough that these are now being denied me. I am also way over $10K in debt.

 

I have heard people say that you should pay off one credit card at at time... and start with the one with the highest interest rate/largest amount but my question is this, what about the other credit cards? Do I let them default in the meantime instead of making minimum payments and focus on the one I am paying off first? Wouldn't that make the other credit cards interest rates skyrocket? It's paying minimum payments to like 6 different credit cards that makes it so I can't just focus on one at a time.

 

SUGGESTIONS?

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I am past the point where I can make an in full payment on any credit card in one shot. It is also not possible for me to get any more 0% credit cards. My debt is high enough that these are now being denied me. I am also way over $10K in debt.

 

I have heard people say that you should pay off one credit card at at time... and start with the one with the highest interest rate/largest amount but my question is this, what about the other credit cards? Do I let them default in the meantime instead of making minimum payments and focus on the one I am paying off first? Wouldn't that make the other credit cards interest rates skyrocket? It's paying minimum payments to like 6 different credit cards that makes it so I can't just focus on one at a time.

 

SUGGESTIONS?

 

Did you read my links for my professional advice?

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I think Fortunate One has great advice and if I had to do it again, I wouldn't use a credit counseling service. That being said, my Xwife DID sign us up for one years ago when we were still married, due to the massive amount of debt that we racked up on credit cards (probably close to $20,000). It took 6-years total.

 

The CCCS we used consolidated our debt and figured it out to pay them all off in a 3-year period. They called the card companies, the accounts were closed, and the rates dropped. The CCCS distributed payment to all the cards AND took a $30/month fee. They were okay... they never scammed us and were very friendly. They also assured us it wouldn't go on our PERMANENT credit score, but it certainly did affect our credit WHILE we were using the service. We had a hard time getting a car loan, etc.

 

Now, all they did was lower the interest rates on the cards, which is something YOU can do. Creditors don't want to lose your business and they'd rather get some money than none at all. So call them (or have someone do it for you) and tell them you'd like to lower your rate and close the account.

 

But above all else, at least pay your minimums on all your cards. DO NOT let any of them default while you pay off one. Some people say to pay off the highest balance/highest rate cards first, but I tend to like to pay the lowest card first. That way, THAT card balance goes fast and then I throw that card's payment toward the next card. It makes me feel like i'm making more progress.

 

Hope this helps.

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I am past the point where I can make an in full payment on any credit card in one shot. It is also not possible for me to get any more 0% credit cards. My debt is high enough that these are now being denied me. I am also way over $10K in debt.

 

I have heard people say that you should pay off one credit card at at time... and start with the one with the highest interest rate/largest amount but my question is this, what about the other credit cards? Do I let them default in the meantime instead of making minimum payments and focus on the one I am paying off first? Wouldn't that make the other credit cards interest rates skyrocket? It's paying minimum payments to like 6 different credit cards that makes it so I can't just focus on one at a time.

 

SUGGESTIONS?

 

My fiance is in the same boat as you, the only problem is shes 8 months pregnant and now all of her bills (and mine) are falling to me. Its very tough these days to make ends meet. If you cannot make a payment you need to find out how your CC company will handle this. If you are going to simply rack up $39 late fees every month, plus your interest you will be going further into the hole, not getting out of it.

 

However, if they understand your situation and will put a hold/ stop on your account this may be the way to go. There is the option of getting some of your credit cards on a payment protector program. I think this is usually reserved for when you are sick, or unemployed etc. but the payment protector suspends your interest, and payments for a set period of time. That might buy you some breathing room if you can do it.

 

If you come up with a magic way out, please do let me know!!!!

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my credit is actually still good at this point I think. I heard somewhere to make payments of more than $10 over the minimum if possible because that helps slightly and I try to do that when I can, of course that is not going to get me out of debt!

 

Lets say you have a minimum payment of $35 on a credit card. Your finance charge is $24 a month (just for arguments sake). So if you make a $35 payment you are only paying down the balance $11 per month. On a thousand dollar card.... thats going to take a LONG time to pay off.

 

I would pay the minimum on all cards except for one, and then pay as much as you possibly can on one card. Repeat this every month, and when that one card is gone you start paying on the next card, adding the extra cash from the one you just paid off onto the new card.

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