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    credit card debt consolidation

    I have 7 credit cards with about $30,000 worth of debt on them. I realize that there is no way that I can pay them all off and so I am considering credit card consolidation. My question is, is it better to use a company to do this or is it better for me to try and do this on my own? Do the credit card consolidation companies, due to their experience, have a better chance of getting a better deal? Do they have inside contacts to get better deals than I can? If not, why would I choose one over doing it myself?

    #2
    IMO, you should only consolidate when you have cut up your cards. Absolutely, do it yourself. The only way to lower your balances is to stop paying on the cards and ruin your credit score.

    Any amount a consolidation company can lower your balances would more than likely be washed in their charges. People who are current on their payments are not likely to get lower balances.

    Your best option is to cut your expenses, work extra and sell off anything you can and just pay what you can.

    Do you have anything to use as colateral for a loan?

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      #3
      I woudl absolutely say that doing it yourself is the better way to go. Debt consolidation companies, as an industry, have a bad reputation for excessive fees and unscrupulous practices.

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        #4
        Yes, they make money off people in desperate financial situations. Do whatever you can to make the minimum payment on all, and apply any extra cash you can scrape up to the one with the highest effective interest rate. Like Maat said, you would benefit from consolidating them into one loan if you can get a lower interest rate than that on your cards.

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          #5
          You have to do it yourself. Relying on Credit card consolidation companies can prove risky sometimes. Whereas doing it yourself, you would know exactly who is given you a better offer by comparing between the different offers and schemes. Always compare that you get a better and low interest and charges on the new loan than that of the credit cards.

          All the best.........
          Last edited by Alex_Adviser; 06-26-2009, 09:23 PM.

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            #6
            Agree with comments above.

            1. Do it yourself. Do not rely on consolidation companies.
            2. Try to get 0% balance tranfer card.
            3. Pay little more than required monthly payment.
            4. It may help to talk to CC companies to reduce your interest rate.

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              #7
              I agree with every one- do it yourself. There are too many risks trying to find the best one to represent you.

              Also, be careful. You did not specify how you got into the $30K hole - make sure your behavior has changed. The last thing you want to do is consolidate, be in the process of paying it off, and then falling on old habits again.

              Hope this helps.

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                #8
                The only way to lower your overall bill is to stop paying the minimums for 6 months or longer, trash your credit, and then have the cash to pay them off in a settlement. If you stop paying your cards and trash your credit but dont have the money to pay the settlement, there is no point. In the settlement, after 180 days of non payment, you can negotiate for 40 to 50 cents on the dollar. The longer you go with non payment, the higher the odds of a company having sold your debt at auction to a second debt collections agency. The more times it is sold, the cheaper your debt will be to settle, but the longer your credit will be trashed. If you can't come up with $15,000 in 6 to 8 months and are set on not paying the debt, you'd be better off to just cut up the credit cards and ignore them for a few years until you can just pay off the debt. Either way, you trash your credit for a long time.

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