Advice on CC Debt Please!

[disneygirlatheart]

Hi! Looking for a little advice please. My dh went to the bank today and borrowed enough to pay off our cc. Is this going to be a smart move to consolidate all these debts into one. Or is it a mistake? I am looking for advice on any one who has dealt with this before. Thanks in Advance!!

[tink2]

Has he already done it or are you looking to stop the loan?
I don't know your situation and we are dealing with cc debt ourselves. If it is a low interest loan- lower than the credit cards- it is one option. You will get many different opinons on this one. We went through the Dave Ramsey classes and started with the lowest balance and paid it off, then moved to the next one. That allows you to see some relief- getting some of the smallest ones paid and being able to apply that money into the others. DR doesn't personally recommend borrowing money to pay them off. But, you will find others that tell you it is ok as long as the interest is lower.
Without having more info- can't really give you advice. But, I will say that if you find a plan you can stick with- you can get out of debt. I can't wait for the day dh and I are out of debt!!! Hang in there- you will do it!

[disneygirlatheart]

Has he already done it or are you looking to stop the loan?
I don't know your situation and we are dealing with cc debt ourselves. If it is a low interest loan- lower than the credit cards- it is one option. You will get many different opinons on this one. We went through the Dave Ramsey classes and started with the lowest balance and paid it off, then moved to the next one. That allows you to see some relief- getting some of the smallest ones paid and being able to apply that money into the others. DR doesn't personally recommend borrowing money to pay them off. But, you will find others that tell you it is ok as long as the interest is lower.
Without having more info- can't really give you advice. But, I will say that if you find a plan you can stick with- you can get out of debt. I can't wait for the day dh and I are out of debt!!! Hang in there- you will do it!

Yes, he went to the bank today and added on to our loan. We already had a loan but it was free and clear. He added on to this to pay off the cc's. We have not used the money yet. It is a lower rate than any of the cc's though.

[yrdlyprincess]

i would say the same...not enough info. but if you did get a loan and pay them off cut up your cards, call the companies and get them to lower your credit limit, not send you out ANYTHING for cash advances, pay everything in cash-cause if you don't have the cash you don't do it. Most important make a budget!! For everything that you spend-I mean everything. I know how rough it can be (been there & done that) but if not you will get hooked again in that same cycle:coffee: I hope that helps!! Good luck

[dvcgirl]

From a mathematical standpoint, it would seem to make sense to transfer your debt to a lower interest rate. However, lumping CC debt onto a larger loan may not change the behavior that got you into debt in the first place. You are just moving the debt from one place to another. It feels like you've accomplished something, but in reality you've just lowered the interest rate....and your payment. While this is a good thing, the bulk of the debt still remains. Without a budget in place, you'll end up right back where you are now.....spending more than you earn. It's essentially the same as pulling a home equity loan and throwing the CC debt on top of it. A full 2/3 of all people who do that end up right back at the same level of CC debt in just two years. The only way this plan works is the hard way....to write down a monthly budget and stick to it. Good luck!

[twinklebug]

From a mathematical standpoint, it would seem to make sense to transfer your debt to a lower interest rate. However, lumping CC debt onto a larger loan may not change the behavior that got you into debt in the first place. You are just moving the debt from one place to another. It feels like you've accomplished something, but in reality you've just lowered the interest rate....and your payment. While this is a good thing, the bulk of the debt still remains. Without a budget in place, you'll end up right back where you are now.....spending more than you earn. It's essentially the same as pulling a home equity loan and throwing the CC debt on top of it. A full 2/3 of all people who do that end up right back at the same level of CC debt in just two years. The only way this plan works is the hard way....to write down a monthly budget and stick to it. Good luck!

::yes::
adding - best advice I had heard when we consilidated our debt in a similar fashion - keep your oldest account, providing it doesn't have an annual or monthly fees and freeze it in a block of ice. Do NOT thaw it our use it for ANYTHING unless there's a true emergency (plane ticket to a dying family member type emergency). Get rid of all other CC accounts.