HELP!I'm pouring my heart out here, need advice!*Updated 6/12/07*

my calculator says...

770 x 59 = 45430
49 x 59 = 2891
45430 - 2891 = 42539

It doesn't seem to add up. That would only allow the balance to be paid off without any interest. Do CC companies do this? If they do I can't see how this would NOT effect your credit rating.
 
I just got off the phone with my credit card company.

I called to find out about what is going on with the minimum payments jumping and they told me they (Chase) are only doing that to people who have high interest rates (16% and above). I asked if they would lower my rate from 11.9% since it is my highest credit card rate and they did, no problem. You just have to call and ask, and the worst they will do is tell you no.
 
WatchinCaptKangaroo said:
I just got off the phone with my credit card company.

I called to find out about what is going on with the minimum payments jumping and they told me they (Chase) are only doing that to people who have high interest rates (16% and above). I asked if they would lower my rate from 11.9% since it is my highest credit card rate and they did, no problem. You just have to call and ask, and the worst they will do is tell you no.

I suggested this to the OP days ago. Call your CC company and negotiate a lower rate, and if they won't do that work out a repayment plan. Essentially the same exact thing that the debt services company that will get $2,500 of the OP's money will do. As someone just said.....CC companies won't want to lose the OP as a customer. She's a dream customer. She's carrying lots of revolving debt and pays only a little over the minimum each month.

Like that person said, call the CC companies and tell them that things are tight for you and you're looking at other CC companies where you can transfer for lower interest rate. They'll work with you...

CC companies hate people like me who pay off their balance each month. They don't make a penny off of me directly. They may get a small percentage from retailers, but CC companies make the most from people like our OP.
 
MAGICX2 said:
I asked her how this will affect me credit score and she said that it should not affect the FICO score directly, however there will be a notation on my credit report that states we are in a debt consolidation program for 59 months beginning xx/xx/xxx.
This sounded like it would be a good thing for us. I would opt for the four times a month. It would be $192.50 every Fri. What do you all think? :confused3

IMHO, I personally would not do it. I never trust the statement "it should not". They should know if it will or won't - I don't think the "should" it a good answer and would not trust them. Your also paying them almost $3000 for what you can take care of yourselves. You should pay yourselves the 50 buck a month instead of them.

I also (my opinion) think that if you take the easy way out, you will not learn how to change how you live. I have cc debt and while I could write a check against my house, it would be an easy way out and the cc may end up with a balance again. I (this is me personally) look at the financial charge as my punishment for having the debt. I had a co-worker that was 88,000 in debt (no house, etc). She filed backruptcy and 5 years later owes about 75,000 again :confused3 - no retirement, lower wages, still no home.

While I was going to say to go on the trips, I have thought about it and changed my mind. I suggust you cancell them both. As much as you want to go, it will be a burden on your finances - disney can make you want it buy everything. Ask your mom if she would be willing to put the money towards one of your debts - she would still be giving you something but it would be much more valueble then a few days at disney.

I also feel that it is important to teach our children about money. My girls have heard more then once that we don't have money for xxxxx. They understand and accept it. It has also helped them with their own money.

We always reward ourselves for meeting a goal - no matter what the goal is. Sometimes they cost but alot of times they don't. Make a list of what you all enjoy (not just you or your husband) and use these as rewards. Set a goal with an approprate reward (ie not = goal: I spent no money this week, reward: dinner and movie out but reward: picnic from home at the park.)

A number of families now consider spending the weekend at the mall a "family outing". You should look for thing that don't cost money or are VERY low cost that your family can enjoy. You'll make more family memories and enjoy being together.

I wish you the best. You are very brave to post you information!
 

WatchinCaptKangaroo said:
I just got off the phone with my credit card company.

I called to find out about what is going on with the minimum payments jumping and they told me they (Chase) are only doing that to people who have high interest rates (16% and above). I asked if they would lower my rate from 11.9% since it is my highest credit card rate and they did, no problem. You just have to call and ask, and the worst they will do is tell you no.


Well, Chase may change their tune...from bankrate.com

"Specifically, regulators with the Office of the Comptroller of the Currency began pressuring credit card companies to hike up minimum payments. Another incentive for change: The newly enacted Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which requires credit card companies to post a kind of Surgeon General's warning on monthly statements that notifies consumers about how long they'll be in debt if they make minimum payments. "



That regulator part would imply that at some point all of us get hit!

I also found this on the Boston Globe website

Credit card minimum payments going up
By Michelle Singletary | September 25, 2005

There is a lot of misinformation being circulated about an industrywide change in credit card minimum payments.

One reader from Atlanta asked: ''I heard recently that when the new bankruptcy law goes into effect in October, our credit card minimum payments will double. Is there any truth to this rumor?"

This is a frustrating financial myth that keeps popping up. Specifically, people are asking me if it's true that minimum credit card payments will jump to a mandatory 4 percent.

The fact is by early next year many credit card users will see their minimum required payments go up. Some have seen a bump already. But the hike has nothing to do with the new Bankruptcy Abuse Prevention and Consumer Protection Act, which takes effect Oct. 17. Despite what you may have heard, a change in how much you have to pay on your credit card bill is not covered in this law.

Companies are increasing minimum payments as a result of new credit card lending guidelines issued by the board of governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and Office of Thrift Supervision.

In 2003, the agencies issued the guidelines to banks and thrifts as a result of what they considered inappropriate credit card marketing and account-management practices.

For years the minimum payment on credit balances has been about 2 percent. With such a low requirement some people find they don't make much of a dent in their principal debt. Regulators told lenders they had become concerned that competitive pressures and a desire for issuers to ''preserve outstanding balances" have contributed to an easing of minimum payment requirements in recent years. The result of course is that it takes years for consumers to pay down their outstanding debt.

''We thought that was something that wasn't right," said Dean DeBuck, a spokesman for the Office of the Comptroller. ''The minimum payment should have some effect on reducing the debt."

Here's what could happen if you pay the average 2 percent minimum payment on a $10,000 credit card debt. At 18 percent interest, it will take you about 58 years to be rid of your debt. In that time, you will pay $28,930.64 in interest, according to a calculator at Bankrate.com that shows people the true cost of making minimum payments.

Regulators have not specifically required credit card issuers to boost minimum payments to 4 percent. Instead they recommended minimum payments be set so that people could pay off their balances in a ''reasonable" amount of time. It seems that the word ''reasonable" caused some confusion. So the regulators issued a clarification that the minimum payment must cover interest, fees, and at least 1 percent of the outstanding balance each month, DeBuck said.

''Because banks were having trouble deciding what was reasonable, we have gravitated toward 1 percent of the principal," DeBuck said. ''This is not a hard and fast rule and banks may establish other payment amounts."

Many cardholders have already begun to see the change. For example, MBNA Corp.'s old policy required consumers to pay their finance charges, fees (if any), plus $15 or 2.25 percent of their balance, whichever was less. The company's new policy requires cardholders to pay finance charges, fees, and 1 percent of their balance. For those who were customers before July 1, the change applies beginning with their January 2006 payment. For those who got a card after July, the new formula was applied immediately, according to MBNA spokesman Jim Donahue.

Donahue said the policy change won't affect many of their customers.

''More than 95 percent of MBNA customers always pay more than minimum every month," Donahue said. ''Of those who do pay the minimum, very few do so for more than two months in a row."

Your minimum payment will depend on your credit issuer. Although some people have seen their minimum payment rise to as much as 4 percent, other companies are strictly following the interagency guideline.
 
crisi said:
Just as an aside, I'm always extra suspcious of anyone using "Christian" in their name or their advertising. Debt consolidation and counseling is the same if you are Christian or Buddhist. If I were going to run a scam, targeting Christians by "being a good Christian" would be my choice of scams. So many really good people, but very trusting people, that I know will trust someone without reservation because they go to the same church.

Perhaps that is a disservice to these people, or perhaps I am too jaded.

No, your not too jaded. One of the programs (dateline, primetime), I can't remembe which, did a program on this. In one town, not only did the people in the church lose their own money but they also lost the church. Their church is now above a store in a small mall - they had there dreams set on a mega church with a coffee shop, ect. A large percentage of the members left the church (1/3 I think). The pastor who promoted the investment had to tell his member that it was a scam.

Christians are the new scam target according to the program.
 
tlbwriter said:
Tell them you've received offers for cards with lower interest rates, and you're considering switching, but of course you'd rather avoid the hassle and stay with your current cards ;) if they're willing to give you a better rate.
Very good advice - they will often waive fees or lower interest rates just by asking.

Here's Clark Howard's summary on Credit Counseling - you don't want to get into an agreement with anyone not totally on the up and up, so just be careful if you do go that route:
Don't be taken by a phony credit counseling outfit! There are many companies out there, that because of a loophole in the tax code are able to call themselves "tax exempt" and claim that they want to help you eliminate your debt. In reality, they want to eliminate money from your wallet in the way of high monthly fees.

I also hear from many consumers that the money they paid in to the "counselor" never made its way to the creditors, making the person's credit rating plummet even more.

To find a legitimate counselor, contact the National Foundation for Credit Counseling, at www.nfcc.org or call 1-800-388-2227.

Here's his whole page on credit counseling:

Clark on Credit Counseling
 
/
crisi said:
I'm not sure how they can tell you what your payment will be and how long when they haven't yet negotiated your APRs with your creditors. I haven't dealt with this, but it smells fishy to me. I do think it will affect your credit for a long time - I don't see how it would be fair that it wouldn't.

Well, I've been through a program just like this one and the reason they can give the payment is there isn't really an active negotiation on rates. There are tons of these debt management services now, and all the credit cards have set rates as to what rates they will give the companies. Some are generous, some aren't. Chase and Citbank will reduce to 6%. Capital One doesn't play ball, they barely reduce at all. But most companies reduce between 6 and 12%.

The programs advise you close or freeze cards yourself and have the notation made "Closed at consumer request" which is supposed to protect you from having the debt management go on your report. Some cards, though, won't give you the reduced rate without putting some notation about the debt management program on it.

As I said upthread, these programs are a mixed bag... between the monthly fees and the damage it does to your credit rating, I can't in good conscience give them the thumbs up. But... it did work for me and I'm not convinced that doing it myself would have. First, making the monthly payment to them forced me to pay that amount every month without varying or paying just the minimum because things were a little tight. And when cards got paid off we "snowballed"-- put that payment amount towards the highest interest card. All those accounts were closed, I couldn't cheat and use them. So they had nowhere to go but down, and they did go down... I loved seeing the results.

Then I found I couldn't get a cc when I wanted a new one for car rentals. I'll never be sure but I think what did me in was not any negative marks from being in a debt management program but the high debt to credit ratio I now had... I don't know. But for a couple years our name was mud to credit grantors. But again.. for me, with my impulse control problems.. probably the BEST thing that could have happened to me. I learned to live without credit. Had no choice.

If I were to do it over again I would absolutely follow the advice on this board and try to lower rates myself and create my own payment program.... but all those years ago, I don't know if I had the discipline.

This is just my experience. At the end of the year we will be 100% debt free... that's good. The Debt Management program made a lot of money off us I don't know that they deserved, that could have gone to creditors. That's bad. For a while my credit was damaged. That's bad. I learned to live without credit. That's good. Now I am building a healthy relationship with credit and hopefully improving my FICO (haven't checked it in years though... I'm like a dieter and the scale. Don't even want to look until I know I've made some progress.) Starting in January the fat payment I made to creditors every month goes in the now rather anemic house savings account. That's good! :cheer2:

OP don't commit to any program yet, and not this one. Even if you can't create your own program you can find one better than this one.
 
If you are not behind on your payments, and you don't anticipate missing pyaments, I would not recommend using the service you mentioned, or any similar services. Let's try to get you out of this with good credit for the future and to give you the maximum number of options while you're paying it down.
First try to get all your interest rates lowered. If they will not lower and you still qualify for 0% offers from other credit card companies, you can transfer balances. Just don't USE the new card or the old card once it's been empty. Cut up or "freeze" the old card, but don't close the account (it can affect your FICO score). Then follow the snowball method or whatever or do what I did - pick the highest interest rate card and pay the most until it's paid off, then move that over to the next highest, rinse and repeat. Don't charge another penny on those cards, I am not kidding. Cut them up.
As for the signature loan, keep making the payments.
I don't need to repeat what everyone else has said, get your expenses down. If you can increase your income, do that as quickly as possible. Cancel those trips, you can't afford the additional cash outlay now under any circumstances. Use your tax refund against the highest interest rate card with a balance, and better yet change the deductions so that the refund is smaller and your monthly $ is larger.
Most of this has been said, etc. Anyway, I don't recommend this debt counseling stuff unless you can't make your payments. I did it and it did reflect negatively on my credit report. And the monthly fee they want to charge you is OUTRAGEOUS. When I did it, my monthly fee was $10. They don't sound very scrupulous to me.
 
But go to any mortgage lender website, punch in your income levels and just take a look-see at how much money that they're willing to lend you. It's incredible! Apparently I should be living in a mansion! I don't know how I get by with 3,000 sq ft!

OMG...I'm glad I'm not crazy! The reason why we rent right now is because we concluded that the upper limits for a mortgage for our income was 300,000. That can't even buy you a two bedroom condo where we live, so I didn't put too much enthusiasm into investigating homes to own.

Not that long ago, I did contact a lender out of curiosity to see what we could actually be approved for...and they approved us for a SEVEN HUNDRED THOUSAND DOLLAR LOAN!!!! :earseek: :earseek: :earseek: I about fell off my chair I was so flabbergasted. Never in a million years..........
 
rjthkids said:
OMG...I'm glad I'm not crazy! The reason why we rent right now is because we concluded that the upper limits for a mortgage for our income was 300,000. That can't even buy you a two bedroom condo where we live, so I didn't put too much enthusiasm into investigating homes to own.

Not that long ago, I did contact a lender out of curiosity to see what we could actually be approved for...and they approved us for a SEVEN HUNDRED THOUSAND DOLLAR LOAN!!!! :earseek: :earseek: :earseek: I about fell off my chair I was so flabbergasted. Never in a million years..........

Ahhh, but do you know how many people would see that figure and think..."well, if the bank says we can handle it, I guess that we can....or they wouldn't loan us the money......right?" Bzzzzzzz....wrong.
 
disneysteve said:
No argument here. I was just responding to the comment that if people understood HELs, nobody would ever take one. I think they can be a very useful financial tool, just like credit cards can be beneficial, if used properly.
I stand by my opinion -- they're a bad thing. Look at how they're marketed: soft language meant to disguise the fact that you're putting your house on the line, emphasis on the mediocre tax savings and none on the huge risk.

Sure, they'll work out for a few people. A few people will win the lottery too.
 
MrsPete said:
I stand by my opinion -- they're a bad thing. Look at how they're marketed: soft language meant to disguise the fact that you're putting your house on the line, emphasis on the mediocre tax savings and none on the huge risk.
I agree with you completely that many folks who take out HELs don't fully realize what they are getting themselves into. And they often take out HELs for the wrong reason - to pay off other consumer debt, mainly credit card bills. And, as a result, many of those people end up digging themselves into a deeper hole than they were in already.

I don't feel my HEL represents any risk to my financial well being. I've got more than enough money to pay off my HEL tomorrow if I chose to (and my mortgage too for that matter). But as long as my investments are outperforming the interest I'm paying on those loans, it simply doesn't make sense to retire those loans early.

So I stand by my opinion that HELs aren't inherently evil. As with all financial instruments, you need to understand how they work and how best to use them. Lots of folks here on the DIS think credit cards are evil and refuse to use them. I couldn't imagine not having my CCs. We rack up hundreds of dollars a year in rewards - things I would have to pay for otherwise. If used properly, CCs and HELs are perfectly safe and even beneficial to your finances. If someone uses them wrong, it isn't the fault of the CC or HEL, it is the fault of the user.
 
disneysteve said:
Just because credit is available to you, doesn't mean you can afford to take it.
A relative used to work as a telemarketer -- one of those irritating people who calls during dinner to offer you a pre-approved VISA card. He said it was the easiest money he ever made; EVERYONE, he says, jumps at the chance to get "free money".

I agree completely, however, with DisneySteve: The fact that someone says you "can afford it" doesn't mean you should take it.
 
tinaluis said:
MAGICX2 said:
Your budget doesn't "feel" that tight because you're putting the excess/overage on a credit card and don't "feel" it until you get your statement and can't pay it in full.
Stating the obvious: If you spend tomorrow's paycheck today, you won't "feel" strained. Today.
 
MAGICX2 said:
I will tell you right now that one of the major things that has gotten me so head strong about this is that I have two upcoming trips that I know I have paid for without using cc's.
I understand that you're not going to cancel these trips, but you need to look at the larger picture: You may not have paid for the Disney trips on the credit cards, but you DID use credit cards for OTHER PURCHASES during that same time frame. IT"S THE SAME THING.

If you pay cash for your Disney tickets, then turn right around and put your child's winter coat on the credit card . . . well, it's still debt. If spending on the Disney trip means that you cannot afford the coat . . . do you see the point?

You're playing a shell game here. You're pretending you could afford the Disney trip because it was "paid in cash". But if you can't pay for your necessities BEFORE you pay for the trip, it's exactly the same thing as paying for the trip with credit cards.

I'm not trying to discourage you -- I"m trying to help you see the truth of the matter here. You're not going to be successful unless you do realize that all debt "costs the same".
 
rjthkids said:
Credit cards are a loan. They are deceptively easy to fall into the trap of "I have money" because they let you live beyond your means. But ask yourself, would your family really want you to fall deeper in debt in order to buy them something they don't really need in the first place? I make it known on no uncertain terms that I do *not* want material presents from people in my family that simply cannot afford them.
This is so obvious, yet it escapes so many people. You would never go down to the bank and apply for a loan for a new sweater, yet a credit card -- if you can't pay the bill at the end of the month -- is really the same thing.
 
d-man's mom said:
Go to the library and check out any books on personal finance as well as the Complete Tightwad Gazette. Read the Tightwad Gazette from cover to cover. And don't forget to return the books on time- you can't afford the late fees.
I second the vote for this book. It is wonderful.
 
MrsPete said:
You would never go down to the bank and apply for a loan for a new sweater, yet a credit card -- if you can't pay the bill at the end of the month -- is really the same thing.
What a great line! Hope you don't mind if I steal that and it turns up in some future thread.

I also love "Tightwad Gazette." In fact, I was a subscriber for a couple of years when it was a monthly newsletter. The books were made later as compilations of all the newsletters.
 
Kay1 said:
I have a question for DVCgirl or anyone else who considers her or himself a fiscal conservative. What do you think of the bank who approved a $59,000 loan for someone in OP's position? At what point will or should these bankers quit serving all that punch?
I agree, but the banks aren't going to stop anytime soon. So it's up to us -- the consumers -- to know our own limits and say NO.
 

PixFuture Display Ad Tag












Receive up to $1,000 in Onboard Credit and a Gift Basket!
That’s right — when you book your Disney Cruise with Dreams Unlimited Travel, you’ll receive incredible shipboard credits to spend during your vacation!
CLICK HERE














DIS Facebook DIS youtube DIS Instagram DIS Pinterest DIS Tiktok DIS Twitter

Back
Top