Debt Consolidaiton

**terickson82** · 11-05-2008, 09:00 AM

Debt consolidation is not the way to go. Your monthly payment might be pretty low, but you're still going to have all that debt there that needs to be paid off. Best course of action is to throw any extra money you may have at one specific debt (after going through your budget to find out where your money is going, and also while paying just minimum payments on the other credit cards), and then once that's paid off take whatever you were paying on the first debt and roll it into the next one.

You can either pay off the smallest debt first to at least get momentum going along with a feeling of accomplishment, but many people like to pay off the debt that has the highest interest rate. In your case your credit cards have a 0% rate for now, but if that's just an intro rate like you said, they will go up no doubt, so watch out.

As I mentioned, don't go with debt consolidation. Instead, just pay them off one at a time, concentrate on one to throw any extra cash you may have (work overtime, get a second job, whatever that might be). If you take this route and succeed, you'll be MUCH better off for it.

**Car Insurance Guy** · 11-11-2008, 04:32 AM

That's excellent you found cards to carry the $40K at 0%, even if they're introductory rates. If you found them once, you may be able to find them again.

Play the musical-chairs-credit-card game until the debt is paid off. You may not be able to do that years on end, but by the time your 0% rates run out, banks may be more apt to lend again at favorable rates.

I like terickson's idea of one debt at a time for a sense of accomplishment.

**disneysteve** · 11-11-2008, 04:52 AM

Originally posted by arthurb999 View Post

I don�t want a home equity loan because I do believe I should turn unsecured debt into secured debt.
We both have never been late and have 700 fico scored.

If you have good credit scores and are responsible with your money and don't intend to ever run up credit card debt again, even at 0%, I see nothing wrong with going the home equity loan route. The rate will be better plus the interest is tax deductible.

Your main focus, though, should be on cutting all the fat from the budget to get rid of this debt as soon as you can.

**boosami** · 11-11-2008, 10:29 AM

Originally posted by arthurb999 View Post

� did banks stop offering such deals?

Unsecured loans are really hard to get right now in any substantial amount, especially at a low interest rate. Banks simply can't jeopardize their capital on what is effectively one of the most risky forms of lending (other than credit cards).

**arthurb999** · 11-12-2008, 05:13 AM

I explored the unsecured route and got 50K but it was at 11% so forget that.

I did some research on how my credit cards figure out minimum payments and threw it into a spreadsheet... so I would be able to see the end in sight.

(Interest Rate%/12) x Outstanding Credit Card Balance + 1% x Outstanding Credit Card Balance

Basically if I pay the minimum on 2 and max I can on the other… then put all the money to the next once it’s paid off… the snowball effect… it would take about 60 months to be out of debt assuming everything stays the same. Obviously I can plow any “extra” cash I run into… into the debt… like tax returns, side money, etc.

We get the 0% offers all the time (usually for 12 months) from different credit card companies so I think we’ll be good… I just set up auto pay so I don’t forget and lose the 0%...

Thanks for the help!

Arthu

**Tree0164** · 11-12-2008, 07:00 AM

I would play the balance transfer game as long as you can on this-if you keep making payment.

Do you have any that have small balances focus on paying that one off and then hopefully they will you more credit or send you another option to transfer at 0% or a low rate.

**zetta** · 11-12-2008, 08:13 AM

Be sure to make up a spreadsheet showing each card and when the 0% expires -- you want to be sure and do a transfer before you incur interest.

For your snowball, you might consider focusing first on the card whose 0% rate expires first...

**boosami** · 11-12-2008, 09:11 AM

Originally posted by arthurb999 View Post

(Interest Rate%/12) x Outstanding Credit Card Balance + 1% x Outstanding Credit Card Balance

I'm assuming you've confirmed the minimum payment is calculated from 1% of the balance for each of your cards... This varies per card: 2% is also common, and it can be as high as 4%. Sometimes people make the mistake assuming it will be 1% when it is actually much higher.

**arthurb999** · 11-12-2008, 10:33 AM

Originally posted by boosami View Post

I'm assuming you've confirmed the minimum payment is calculated from 1% of the balance for each of your cards... This varies per card: 2% is also common, and it can be as high as 4%. Sometimes people make the mistake assuming it will be 1% when it is actually much higher.

Yes I did the math to check. I just need to find a 4th player to keep the balance transfer game going...

**boosami** · 11-12-2008, 12:38 PM

Here's about 20 cards that offer 0% on balance transfers: Balance Transfer Credit Cards - Many choices available for your transfers - CreditCards.com

**tn2008** · 11-14-2008, 09:03 AM

Originally posted by boosami View Post

Here's about 20 cards that offer 0% on balance transfers:

Good information. Thanks.

**Eagle** · 04-08-2015, 05:49 AM

Originally posted by terickson82 View Post

Debt consolidation is not the way to go. Your monthly payment might be pretty low, but you're still going to have all that debt there that needs to be paid off. Best course of action is to throw any extra money you may have at one specific debt (after going through your budget to find out where your money is going, and also while paying just minimum payments on the other credit cards), and then once that's paid off take whatever you were paying on the first debt and roll it into the next one.

You can either pay off the smallest debt first to at least get momentum going along with a feeling of accomplishment, but many people like to pay off the debt that has the highest interest rate. In your case your credit cards have a 0% rate for now, but if that's just an intro rate like you said, they will go up no doubt, so watch out.

As I mentioned, don't go with debt consolidation. Instead, just pay them off one at a time, concentrate on one to throw any extra cash you may have (work overtime, get a second job, whatever that might be). If you take this route and succeed, you'll be MUCH better off for it.

+1 to this comment. List your debts smallest to largest and pay off the smallest first. Then pay off the 2nd smallest next... So on and so forth. You can do it arthurb999!

**fowlerandfowler** · 04-14-2015, 06:59 PM

Hi,I think you have to consult with debt advisor.It is better for you.As an advisor he can give you more advice about your concerned problem and you will be get out of debt.

**tripods68** · 04-15-2015, 07:44 AM

Originally posted by arthurb999 View Post

My wife and I inherited a house and spent some money renovating it and now live there. We owe 40K on credit cards. I currently have them all on 0% intro rates now.
I used to get things in the mail all the time from Bank of America and others offering debt consolidation loans. The form was basically a big grid with the different loan amounts, interest rates and terms.
I don’t get them anymore… did banks stop offering such deals?

Does anyone know a good place to do a non-secured loan like that. I don’t want a home equity loan because I do believe I should turn unsecured debt into secured debt.
We both have never been late and have 700 fico scored.

I guess I should keep playing the balance transfer game but I really like the idea of having one payment and a set term so I can see the light at the end of the tunnel.

What do you guys think?

Arthur

I'm taking the other side of equation here instead of consolidation loan.

Change your mindset and behavior. That means you have to pay this off using a good budgeting plan. Transferring into zero interest loan doesn't change anything to me. You still OWE no matter where it is.

I'm going to assume you have income and contributing towards retirement. Here's what I would do in your situation:

1) Stop contributing towards retirement apply those contributions towards the loan instead.
2) Apply available cash savings towards paying this loan.
3) Start selling anything you can sell and apply it towards this loan.
4) Set a timetable to pay this off in less than 1 year. The sooner the better.

Be Mad as Hell to get rid of this loan! Thank me later

Debt Consolidaiton