Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Number your cards on a piece of paper. Line them up like Sean said with the snowball effect, but place them in the order of highest interest rates first and lowest at the bottom. The one at the top is your obvious priority because by dumping it quicker, you'll save more money.
You can research snowball effect on Wikipedia or something for details on how much to place on each, but that's something you have to answer personally -- not sure how much you're willing to put down.
I just got out of debt a few months ago and know that you will too. Good luck.
oh god, that must be nice, that is living the dream!...hopefully someday!
First, you don't need a debt consolidation company.
I'm curious as to why you were considering it at all. Are you stress financially making the minimum payments? If not, what was the point?
You can 'consolidate' the debt on fewer cards on your own (say for example if you just prefer making one payment and fewer bills to worry about.)
Now, that depends on how much available balance you have on your cards. And it would affect the debt to available credit ratio for that card.
Also, are you still USING your cards or do you use them often, or for any kind of monthly expenses?
Does the card you have the zero percent balance on send you balance transfer offers? IF SO, you COULD do the math on whether it's worth it to pay a 3% transfer fee to get the 10 and 12 percent debt over to 0%. That depends on how long it would take you to payoff the debt at the current 10 and 12%.
Snowballing on O% goes further than snowballing on 12%. But you still have to do the math.
(I have one card for monthly expenses or the few online purchases I make, that I pay off every month. And use my other cards for more 'substantial' purchases that take longer to pay off. And they're all at 0%)
I would not do a consolidation loan, especially over $9000. My biggest concerns when people do consolidation loans are:
1. If you snowball your debt, you'll end up with smaller minimum payments over time and increase cash flow. This cash flow can come in handy if you have a lean month, maybe your paycheck is late, you have to take unpaid time off work, etc. With one big payment, they'll likely make you set it up on autodraft from your bank account and you'll have no control over it and it decreases cash flow.
2. If you consolidate all your cards to the loan, your cards now have no balances and leaves you at risk to charge up the cards again. Unless you have a complete, ironclad budget, I wouldn't risk it.
3. It gives you a false sense of accomplishment. You didn't do anything but shift the debt around.
We've paid off over $36K in debt over the last 16 months (we have about $3,440 left and will be debt-free in July). We aren't high income either (grossing around $75K). You can pay off $9000 fairly easily. I'd look at places to cut in your budget like eating out, entertainment, shopping, meal planning to reduce groceries, meatless meals, etc.
I do not know the company you reference but unless I was saving a lot of interest I think I would skip consolidation. Especially if you have to pay a fee to the consolidation co,
Hello. I am thinking of consolidating my credit cards and was wondering if it would be good for me or not.
Here's my situation:
I have 4 credit card balances totaling $9091. Of the 4 credit cards, one of the credit cards I have 0% APR til next may($1200 balance) which I should be able to pay off no problem. The other two are 11.99% APR and one of them is 9.99% APR. The Minimum monthly payments are $53, $52, $49, and $20(for 0%).
Would it be a good idea to consolidate by using non for profit consolidation company like incharge.org? They said that if I pay $250/mo. to them, I will have $9091 paid off in 3 years.
Also, If you say I should consolidate, should i include the 0% APR card in the consolidation? Would appreciate any advice, thanks.
Your interest rates are not out of the ordinary for unsecured debt. Just pay off the cards yourself.
This isn't a bad idea, but it really is a dumbed-down way to get Americans to feel good about paying off their debt. However, I'm for whatever will motivate people.
If you do the snowball method, please taken Suze Orman's route and pay off the highest interest card first. It will save alot more money than simply the lowest balance (lunacy)
If you do get a consolidation loan, WHATEVER YOU DO, DON'T CONSOLIDATE THE CARD WITH 0% interest! And you only do a consolidation loan if you're getting an improved interest rate, so first, you should see what banks would be willing to give you. A consolidation loan's upside isn't simply in having 1 bill to pay, but rather, will it save you money? Otherwise, it's just a mind-game.
Good luck. I know you can do this.
Dave Ramsey (debt snowball) and Suze Orman are like an apple and an orange; individuals are different and so are their optimal payoff strategies.
The debt snowball is intended for those who get a motivational boost from retiring debts individually in order of size - seeing those debts go away entirely. For everyone else, paying off debts in decreasing order of interest rate is the proper approach.
Though the OP was in 2008, some things I'll add for today:
1. Do you have an emergency fund established? $1000-$2000, depending upon your comfort level.
2. Do you have a written budget? How much can you throw at your one focused debt until it is paid off?
3. Though debt laddering usually pays off faster than debt snowball, I've run scenarios with clients where it didn't. Always run both scenarios to determine your best course of action if your ultimate goal is to pay the least amount of interest.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
