I'm seriously thinking about consolidating my credit cards. This would be my first time and there are so many options as far as which bank to go to. Does anyone have any advice?
2006-12-11 16:03:23 · 9 answers · asked by Teedy 1 in Business & Finance ➔ Credit
Yes weigh all your options before you do anything...
Read this article about your opttions to eliminate debt:
VeRY InterEsting.
http://www.expert-credit-advice.com/options_to_eliminate_debt.htm
2006-12-11 16:07:37 · answer #1 · answered by Anonymous · 0⤊ 0⤋
There are some things you need to think about first. One is the consolidated loan interest rate lower than the interest rate you are currently paying. If not, don't do it. You will eventually pay more overtime. Also consolidating can have some negative effects. Are you closing the other cards? If so, your average credit age (the amount of time the cards were active) will lower and hurt your score. What percentage of credit are you using compared to your credit availability on each of the cards? If all of the cards are less than 30%, I would advice against it because if you consolidate and your credit availability (credit limit) on the consolidated card will be higher than 30%, you will also hurt your score. I'm not saying it is a bad or good thing, because each person has different things going on with their credit and only they know what is truly best for them. Just be sure you look at both sides because you could pay more overtime if your credit score drops because you will be paying higher interest rates later on and possibly higher insurance rates (for your car and home since those companies look at your score as well and base their premimums off your credit score).
2006-12-11 18:33:05 · answer #2 · answered by Mariposa 7 · 0⤊ 0⤋
Consolidating ones debts is perhaps the most common, practical and expedient means Of surviving life, financially. There is no bad way of doing it, however some ways are better than others.
If you own a home, it makes it better because the interest is tax deductible.
I don't know enough to suggest a 3, 4 or 5 year loan, but the 'shorter the better, IF you can make the payment.
The trap in a consolidation loan is not in the loan, but what you do afterwards, and that means NOT using any credit cards until you repay at least one third of the loan.
You didn't give us details, so I can;t be more specific.
.
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2006-12-11 17:05:07 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Many articles and companies offer tons of advice and are willing to help. However, ask yourself do you really need the help or can you really manage this on your own?
Consolidation companies are a good resource. They can negotiate with your credit card companies and get the interest rate lower. I heard some consolidation companies negotiate down to a 0% APR. It is most likely that the credit companies view this as a prelude to bankruptcy and are willing to go the extra mile.
However, there are drawbacks in using these consolidation companies. First, you must agree not to use the credit cards under the consolidation program. This means you do not need to disclose all of your credit cards but it is highly encourage. Second, if you use cards under a consolidation program expect a call and a lecture from the consolidation company. In addition, they may drop you from the program, which your interest rates will go back to normal. Third, some programs do not allow you to open new accounts. I am not sure what the consolidation company views as an account. However, student loans and car loans are accounts. The consolidation company may view it as so and drop you from the program.
If you absolutely or desperately need assistance, then I highly recommend these programs. However, if you have a few thousand ($12000 max) in balances, then consider other alternatives. The main way in getting ahead is generating more income and cutting back expenses. I wish you success.
2006-12-11 16:40:28 · answer #4 · answered by jynxx25 2 · 0⤊ 1⤋
If they all have the same interest rate, there's no real need to consolidate these balances. Think about it. If you have $2,000 outstanding on two credit cards at 16.9 percent, what's the savings in having the balance on one card at the same interest rate?
Most credit card agreements have higher interest rates for cash advances and will also charge a fee for the transaction, too, so it's not going to be a less-expensive approach to paying down your credit card debt.
People typically look to debt consolidation to reduce their interest rate or extend the term of the loan. Credit card debt is open-ended or revolving credit, so shifting balances from one card to another isn't going to extend the loan term. You've stated that all of the credit cards are at the same interest rate, so that's not a reason to move balances.
2006-12-12 07:31:01 · answer #5 · answered by aleish 2 · 0⤊ 1⤋
Use the equity in your home to consolidate. You can save money every month and QUICKLY get your credit score back up (assuming the major problem is high balances). Just get into a short term fixed program and refinance a little while down the road when you can get into Prime rates.
Send me an email so I can give you more advice. That's available through my profile.
2006-12-11 18:53:06 · answer #6 · answered by utopiafourteen 2 · 0⤊ 0⤋
some debt consolidation info I found for you:
Ways to Consolidate Debt
http://www.debt-explained.com/category/Ways-to-Consolidate-Debt.html
2006-12-11 23:44:24 · answer #7 · answered by marie a 2 · 0⤊ 1⤋
I just transferred all my balances to the card i had with the lowest interest rate, so all my debt is on one card, i only have to make one payment a month for them, etc. its a really good idea.
2006-12-11 16:11:01 · answer #8 · answered by obscuremagic 5 · 0⤊ 1⤋
the only one advice it is too look for credit tips...
so far i recommand :
icebergtips.com
Look to "credit" tips there...
2006-12-11 17:11:07 · answer #9 · answered by Like2know 1 · 0⤊ 1⤋
keep shopping around until you find something that is right for you.
2006-12-14 16:08:15 · answer #10 · answered by luciousgreeneyedlady 5 · 0⤊ 1⤋