boy oh boy

[Caelum]

do I need help, haha...i have a credit card with a balance of $4,300 and am barely making bills(unable to pay some)...im way under my head, is consolidation good? I don't want it to affect my credit at all, basically I just want a service that helps consolidate but doesn't put a little Asterisk or anything else in my credit report, is there such a thing? Or make me feel better and lemme know theres some other people out there in a similar or worse situation so I know im not the only one, hahaha

 

[JPPT1974]

I am paying one credit card to another with paying off the credit cards with another credit card so don't feel bad at all. Call your bank or credit loan officer. That is the only advice I can give you.

 

[MrsGnomeCrusher]

I don't think a consolodation loan will look bad against your credit. If anything, it'll look good. You're taking responsibility to get everything paid off. You're not saying, "oh well" to it.

Do you have other outstanding debts? If you only have a credit card, perhaps a loan isn't what you need. Perhaps you should shop around for a different card with a low interest rate and no annual fee. Read the fine print. There are a lot of offers out there. Just remember, if you do go with a lower interest rate card, most likely your minimum payment will go up. Sometimes a lot.

Also, if you have other debts, what are they? I have a student loan I'm paying off on top of car and credit card. I wouldn't throw my student loan in a consolidation loan because I have such a low interest rate. I doubt I'd get that low with a consolidation loan.

Hopefully there's some financial guru here that can help you out.

 

[leah-bygrace]

do I need help, haha...i have a credit card with a balance of $4,300 and am barely making bills(unable to pay some)...im way under my head, is consolidation good? I don't want it to affect my credit at all, basically I just want a service that helps consolidate but doesn't put a little Asterisk or anything else in my credit report, is there such a thing? Or make me feel better and lemme know theres some other people out there in a similar or worse situation so I know im not the only one, hahaha

I would be wary of going to a consolidation/credit counseling place. There are "good" ones, but they are few and far between. Also, there will be a remark on your credit report about the consolidation and that does look bad to some creditors. These places aren't regulated by the government, so the only way to validate them is through the Better Business Bureau. I've read many horror stories about people getting ripped off and left in worse financial state then before. Some places just take your money and never pay your cards and you don't even find out until your credit is ruined.

IMO, it would be safer to find a local credit union and try to consolidate there. I JUST went through this myself (and believe me, I'm in way more debt), and after reading all the warnings online about debt consolidation companies, I decided to try and get a consolidation loan from a local credit union instead. Credit unions are a lot more lenient than large banks like Bank of America or Wachovia, it will be a lot easier to be approved.

I was even a bit surprised when they approved me and now I'll be paying HALF of what I was paying for the next 5 yrs. I believe the amount you want to consolidate ($4300) has has to be less than 25% of your salary (you must make more than $18,000). They also asked me to close all the credit card accounts that they paid off; which believe me, I happily did.

My advice: try a credit union ASAP, especially since you are barely making payments as it is; you don't want to make your credit worse! If you don't get approved, then DO A LOT OF RESEARCH before you decide to consolidate.

GOOD LUCK!

 

[Caelum]

Thanks Guys, i'll figure out something

 

[uniqute]

Yeah, I'd say go the credit union option! I had a reasonably big debt myself, still do to some extent, but its getting paid off now.
One thing that really works for me is to get the credit union to take the payment out as soon as your income goes in to your account. Hard to miss making the payment if its already gone!

 

[Living4Him03]

Cut up the credit card! Then work to pay off your balance. Seriously, credit cards should be limited to one card at most and it should be used rarely. If you can't use a credit card rarely and have trouble getting into debt, don't use credit cards for awhile until you learn how to better manage your money.

 

[Caelum]

Cut up the credit card! Then work to pay off your balance. Seriously, credit cards should be limited to one card at most and it should be used rarely. If you can't use a credit card rarely and have trouble getting into debt, don't use credit cards for awhile until you learn how to better manage your money.

Well, that would have been great advice a few months ago, however it does absolutely nothing for me now!

 

[Raanan]

My parents always told me while growing up, "If you don't have the money in your bank account then don't use the card."

Now I have a card and follow that very simple rule of thumb. Honestly though, it's really easy for me to follow as my card is a debit card. If I don't have money in my bank account I can't use it...

Looking into getting a card simply for the benefits you can get making your purchases with plastic instead of paper.

 

[MrsGnomeCrusher]

I have read/heard somewhere that you can pay off your debt quicker if you break up your entire payment into two and pay it every two weeks? For example, say you pay $300 a month for your vehicle. You pay $150 on it every two weeks. They say that it reduces the amount of interest one pays. Now, it makes sense as you're paying interest daily on your balance. So if you pay that $150 and the other $150 when the payment's due . . .you'd be paying less interest.

Is that how it works? And is it a big difference--enough for me to make the extra trip to the bank--or is it just pennies? Anyone do this?

 

[Out of the Flames]

I have read/heard somewhere that you can pay off your debt quicker if you break up your entire payment into two and pay it every two weeks? For example, say you pay $300 a month for your vehicle. You pay $150 on it every two weeks. They say that it reduces the amount of interest one pays. Now, it makes sense as you're paying interest daily on your balance. So if you pay that $150 and the other $150 when the payment's due . . .you'd be paying less interest.

Is that how it works? And is it a big difference--enough for me to make the extra trip to the bank--or is it just pennies? Anyone do this?

The only way you can pay less in interest on your car is if you pay more than the monthly payment. Car payments are paid interest first and then the remainder toward the principal. So if you pay $300 a month, they'll put $120 toward interest and $180 toward principal (depending on your interest rate). So based on your method of calculation, over the course of a year, you'd make 26 payments of $150 for a total of $3900, whereas if you just paid the $300 a month, you'd pay $3600. To me, an extra $300 a year is not worth 14 extra checks and trips to the bank.

But for some, every cent counts.

 

[Spicy McHaggis]

The only way you can pay less in interest on your car is if you pay more than the monthly payment. But for some, every cent counts.

If your interest is compounded daily though, wouldn't chipping away at that pronciple 2, 3, or 4 times a month be better in the long run?

 

[Raanan]

If your interest is compounded daily though, wouldn't chipping away at that pronciple 2, 3, or 4 times a month be better in the long run?

That's pure mathematics and yes is the answer. You make more payments and therefore keep the interest from acruing (spelling?) as much but you also lower the principle more frequently which thereby lowers the amount of interest acrued even in the 2 weeks. Mathematically, more frequent payments at less per payment is better. Then again, I'm no expert and my assumption of interest being acrued off the remaining principle instead of the base loan amount is probably false. My assumptions frequently turn out wrong.

 

[MrsGnomeCrusher]

If your interest is compounded daily though, wouldn't chipping away at that pronciple 2, 3, or 4 times a month be better in the long run?

That's what I thought. Most interest is calculated on your average daily balance. Therefore, if I pay $150 after two weeks, I'll be paying on the balance (and interest), but when they go to calculate the interest the next day, I'll have less of a principle to add insterest to. Wherever I read/heard this, I remember it stating that if you did this with a 30-year mortgage or what have you, you'd shave years off of it. (Not sure if this is true).

Hey, if I'm driving by the bank anyway, I'd rather have $300 bucks in my pocket after it's all said and done than in the banker's.

 

[Spicy McHaggis]

Cut up the credit card! Then work to pay off your balance.

Good advice.

When you find yourself in a hole, you should stop digging.

 

[Warrior Poet]

Moma says that credit cards are of the devil. Moma also says that alligators are so irratable because they have all those teeth and cant brush 'em.

Moma might be a tad confused,



Warrior Poet

 

[Out of the Flames]

If your interest is compounded daily though, wouldn't chipping away at that pronciple 2, 3, or 4 times a month be better in the long run?

If the interest on your car is compouded daily, tell me where you carry your financing, because I'm going to refi with your bank. The interest on my car through my current financier is per cycle. But I believe that when I move my loan to my new credit union it computes daily, at which point, yes, if I made 4 payments a month, I'd drastically cut down my interest paid.

But still, at an extra $300/yr in payments, you're only saving about $150 in interest. Over the life of a 60 month loan, you'd save about $750.00.

See, this question is a lot more complicated than it would seem, because there are so many factors to consider, such as interest rate, how your finance charges compound, and how frequently you pay. All the information you need to calculate your savings in different scenarios would be in your statements, though.

But given the fact that I haven't slept in a week, I'm not really in a position to run numbers. And that ain't good 'cuz I work in numbers.

 

[Jill Pole]

Read the book "Financial Peace" by Dave Ramsey. He gives sensible and practical advice for getting out of debt and staying there. But check it out of your local library instead of adding another charge to that credit card to purchase it.