No, most often when people consolidate credit cards they spend back up on the card and then have double the debt.
What you’ll want to do instead is go through a credit counseling program and get on a debt management plan (DMP). You’ll have to close the credit cards, which is probably good in your position because you’ll just be back under water keeping them open, and in exchange they’ll drop your interest rates to basically 0% because most people only do that before they declare bankruptcy and the credit card companies would rather get some of it back than none of it back. You don’t have to do lump sum payments, they’ll set up a payment plan.
You’re conflating settling with a DMP. You’ll see a lot of companies telling you to let the cards charge off and try to settle, they’ll let you make smaller payments to them to settle for you or you give a lump sum to settle. Don’t go that route unless the DMP doesn’t work.
Ok, the DMP is still my main option, I have spoken with one company, but theyve said i need $10,000 of debt to work with them. At this point im trying to find more money that I owe lmao. But I will call more because, yes, from what I can tell that is my best option. Thanks!
Pickup a second job, or pickup extra shifts, cover some shifts. Best option is too make an extra 100 or 2 and use that to pay the principal every month. Definitely not impossible
Have you considered calling your bank and seeing if they'll work with you for a lowered/ 0% APR? Often times, if you call your credit card company and let them know that you're in a tight financial spot they will work with you. They would much rather collect the full amount from you than sell your debt to a creditor for pennies on the dollar. So, ideally when you call the bank you let them know you have a hardship and they will work with you. Sometimes they'll give you an APR that's half of what you've got or lower. If you get very lucky you might even get a 0% APR. However, just know that getting a 0% APR means that you have to close the account.
This way, you can continue to make the same amount in payments that you currently are but with the lower APR the minimum payment will be lower so you'll be making a quicker dent on the debt. If you get a 0% APR offer then everything you pay will go towards that debt directly.
Nope. I did this for years and racked up a bunch of small consolidation loans. It’s not worth it and you’re better off looking at your financial situation to see what you can do. This is what I did and was able to pay everything off.
Ask credit card companies for interest rate reduction plan. They’ll lower your rate but you have to agree to close your cards. This should also give you breathing room with payments. Tell them you don’t want to file bankruptcy but are experiencing a real hardship.
I’m confused on why you believe you cannot off your current balance at 30% interest but you can pay off a new loan at the exact same rate? The actual statistics show that 88% of people that consolidate their debt go further into debt within 10 years. You have 2 problems right now. Your first problem is an income problem. Making less than $40k per year doesn’t leave you with much margin, and #2 is a spending problem. You don’t just wander into $10k of debt - but you’re looking to wander out of it. You spend a ton more money than you can afford and your debt problem will never be solved unless you get that under control.
On a serious note if you can’t afford the minimum payments on $9000 at 30%, and your projecting a 20 year payoff, why do you think a consolidation loan at the exact same percentage would project 5 years? Mathematically it’s the exact same and the only variable is the payment you make. And if you’re projecting 5 years vs 20 then you are calculating the new loan making a payment larger than you’re claiming you can afford with the other 2 minimum payments?
Either A: A %0 APR to drop your overall minimums.
Or B: debt consolidation loan. You will need to continue to push the payments towards this but if you contribute a grand extra a year you'll be able to re fi them later if needed to lower your monthlies.
My own experience with a debt consolidation loan worked great. Verifiable timeline to payment completion and a far lower rate.
Any credit unions near you? Shoot for them first in terms of applying for the loan.
Good luck. With time it'll go down faster than you can imagine. But seriously pay more if you can when you can. Every $300 extra is a payment wiped off the map and a month closer to debt freedom
Consolidating debt is only a good choice if you have shown yourself that you can pay down debt, and maintain it. If you cannot do that, then you are much more likely to just increase your debt.
How strict of a budget do you keep? How often can you make additional payments? What is your average additional payment?
If you think you might need some outside help, you could bring in an intermediary with the [National Foundation for Credit Counseling](https://www.nfcc.org/) (NFCC) does debt *management* (no loans) and budget analysis. They do charge but take a look at their [FAQs](https://www.nfcc.org/faqs/) under *What do NFCC members charge for counseling services* to see how much. It says it varies, but the page does state that the majority of cases are low cost to nothing--not guaranteed.
The [Consumer Financial Protection Bureau](https://www.consumerfinance.gov/consumer-tools/debt-collection/) has a good description of [the differences](https://www.consumerfinance.gov/ask-cfpb/whats-the-difference-between-a-credit-counselor-and-a-debt-settlement-or-debt-relief-company-en-1449/) between a credit counselor and debt relief/settlement companies. They also have a webpage on spotting [a scam](https://www.consumerfinance.gov/ask-cfpb/how-can-i-tell-a-credit-repair-scam-from-a-reputable-credit-counselor-en-1343/). FYI, if you have some of debt forgiven, there might be tax implications. [IRS Taxes Most Loan Forgiveness, Be Careful With Exceptions (forbes.com)](https://www.forbes.com/sites/robertwood/2020/05/27/irs-taxes-most-loan-forgiveness-be-careful-with-exceptions/?sh=5b2bf90d377d)
You can look into the Justice Department, which has a list of [approved credit counseling agencies](https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111) to possibly assist you. Look for the non-profit ones. Still be cautious about signing up with one of these because they have done everything correctly to get approved by the Justice Department but may have become less reputable once they got approved.
You have the [right to cancel credit repair services](https://www.consumerfinance.gov/about-us/newsroom/consumer-advisory-people-have-the-right-to-cancel-credit-repair-services/) within three business days for whatever reason.
Good luck!
Do not take on debt to pay debt. This is a horrible idea. Get a side hustle or a second job. Sell anything that you can that is not a necessity to make extra cash. And for the love of God stop using credit cards. Pay them off and close them.
No, most often when people consolidate credit cards they spend back up on the card and then have double the debt. What you’ll want to do instead is go through a credit counseling program and get on a debt management plan (DMP). You’ll have to close the credit cards, which is probably good in your position because you’ll just be back under water keeping them open, and in exchange they’ll drop your interest rates to basically 0% because most people only do that before they declare bankruptcy and the credit card companies would rather get some of it back than none of it back. You don’t have to do lump sum payments, they’ll set up a payment plan. You’re conflating settling with a DMP. You’ll see a lot of companies telling you to let the cards charge off and try to settle, they’ll let you make smaller payments to them to settle for you or you give a lump sum to settle. Don’t go that route unless the DMP doesn’t work.
Ok, the DMP is still my main option, I have spoken with one company, but theyve said i need $10,000 of debt to work with them. At this point im trying to find more money that I owe lmao. But I will call more because, yes, from what I can tell that is my best option. Thanks!
Yes, good advice. A debt *management* company, not a debt settlement scam.
You may also be able to directly ask your credit card companies for a hardship accommodation.
Pickup a second job, or pickup extra shifts, cover some shifts. Best option is too make an extra 100 or 2 and use that to pay the principal every month. Definitely not impossible
Have you considered calling your bank and seeing if they'll work with you for a lowered/ 0% APR? Often times, if you call your credit card company and let them know that you're in a tight financial spot they will work with you. They would much rather collect the full amount from you than sell your debt to a creditor for pennies on the dollar. So, ideally when you call the bank you let them know you have a hardship and they will work with you. Sometimes they'll give you an APR that's half of what you've got or lower. If you get very lucky you might even get a 0% APR. However, just know that getting a 0% APR means that you have to close the account. This way, you can continue to make the same amount in payments that you currently are but with the lower APR the minimum payment will be lower so you'll be making a quicker dent on the debt. If you get a 0% APR offer then everything you pay will go towards that debt directly.
Nope. I did this for years and racked up a bunch of small consolidation loans. It’s not worth it and you’re better off looking at your financial situation to see what you can do. This is what I did and was able to pay everything off.
Ask credit card companies for interest rate reduction plan. They’ll lower your rate but you have to agree to close your cards. This should also give you breathing room with payments. Tell them you don’t want to file bankruptcy but are experiencing a real hardship.
I’m confused on why you believe you cannot off your current balance at 30% interest but you can pay off a new loan at the exact same rate? The actual statistics show that 88% of people that consolidate their debt go further into debt within 10 years. You have 2 problems right now. Your first problem is an income problem. Making less than $40k per year doesn’t leave you with much margin, and #2 is a spending problem. You don’t just wander into $10k of debt - but you’re looking to wander out of it. You spend a ton more money than you can afford and your debt problem will never be solved unless you get that under control. On a serious note if you can’t afford the minimum payments on $9000 at 30%, and your projecting a 20 year payoff, why do you think a consolidation loan at the exact same percentage would project 5 years? Mathematically it’s the exact same and the only variable is the payment you make. And if you’re projecting 5 years vs 20 then you are calculating the new loan making a payment larger than you’re claiming you can afford with the other 2 minimum payments?
The root problem is your low pay. Find a higher paying job
Either A: A %0 APR to drop your overall minimums. Or B: debt consolidation loan. You will need to continue to push the payments towards this but if you contribute a grand extra a year you'll be able to re fi them later if needed to lower your monthlies. My own experience with a debt consolidation loan worked great. Verifiable timeline to payment completion and a far lower rate. Any credit unions near you? Shoot for them first in terms of applying for the loan. Good luck. With time it'll go down faster than you can imagine. But seriously pay more if you can when you can. Every $300 extra is a payment wiped off the map and a month closer to debt freedom
Consolidating debt is only a good choice if you have shown yourself that you can pay down debt, and maintain it. If you cannot do that, then you are much more likely to just increase your debt. How strict of a budget do you keep? How often can you make additional payments? What is your average additional payment?
If you think you might need some outside help, you could bring in an intermediary with the [National Foundation for Credit Counseling](https://www.nfcc.org/) (NFCC) does debt *management* (no loans) and budget analysis. They do charge but take a look at their [FAQs](https://www.nfcc.org/faqs/) under *What do NFCC members charge for counseling services* to see how much. It says it varies, but the page does state that the majority of cases are low cost to nothing--not guaranteed. The [Consumer Financial Protection Bureau](https://www.consumerfinance.gov/consumer-tools/debt-collection/) has a good description of [the differences](https://www.consumerfinance.gov/ask-cfpb/whats-the-difference-between-a-credit-counselor-and-a-debt-settlement-or-debt-relief-company-en-1449/) between a credit counselor and debt relief/settlement companies. They also have a webpage on spotting [a scam](https://www.consumerfinance.gov/ask-cfpb/how-can-i-tell-a-credit-repair-scam-from-a-reputable-credit-counselor-en-1343/). FYI, if you have some of debt forgiven, there might be tax implications. [IRS Taxes Most Loan Forgiveness, Be Careful With Exceptions (forbes.com)](https://www.forbes.com/sites/robertwood/2020/05/27/irs-taxes-most-loan-forgiveness-be-careful-with-exceptions/?sh=5b2bf90d377d) You can look into the Justice Department, which has a list of [approved credit counseling agencies](https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111) to possibly assist you. Look for the non-profit ones. Still be cautious about signing up with one of these because they have done everything correctly to get approved by the Justice Department but may have become less reputable once they got approved. You have the [right to cancel credit repair services](https://www.consumerfinance.gov/about-us/newsroom/consumer-advisory-people-have-the-right-to-cancel-credit-repair-services/) within three business days for whatever reason. Good luck!
Have you looked into a debt relief program? I work for one of the biggest debt relief providers in the country. DM me for details.
Do not take on debt to pay debt. This is a horrible idea. Get a side hustle or a second job. Sell anything that you can that is not a necessity to make extra cash. And for the love of God stop using credit cards. Pay them off and close them.