Would debt consolidation work for me?

[PrincessGrownUp]

My debt (besides my mortgage) is 2 credit cards. I have approx. 10k on one card with 5.9% interest and $7.5k on the Disney Visa. I can't remember the interest but it's not great. Maybe 16%. I recently got a job after being laid off for a while. I am able to pay the minimum every month on them, and sometimes a little extra. At this rate, it will take me forever to pay them off!
Will it benefit me to use an agency because 5.9% is a low rate to begin with? Will they be able to get it lower? I can't stomach the cost of the interest rates every month!
I read that some agencies will not cancel but suspend the cards. I really don't want to close my Disney card account because I like the perks. We don't plan on going until the debt is paid off, but I wouldn't want to miss out on an offer for Disney Visa holders only. And.. I don't want to close my other card because of the awesome interest rate. Which is only 'awesome' if I have a balance. This is probably why I can't get out of this mess.
I'm looking for any kind of suggestions to get me out of credit card debt.

 

[PrincessGrownUp]

I want to add that if they would be able to lower my interest rates then I would close my accounts.
Also want to add that I haven't used those cards since I started getting a paycheck again.

 

[pfp258]

"I'm looking for any kind of suggestions to get me out of credit card debt"

How about this......spend less and pay your debt down. Live within your means. Don't need Dave Ramsey....it is really very simple people

Take home income
-bills
-savings
=disposable income

 

[natfrac]

If you can make keep your cards current, I would avoid debt consolidation and pay as much extra as you can. I believe that debt consolidation can hurt your credit, which you may not want to do while you're getting back on your feet.

 

[disneychrista]

I really don't think I would go to debt consolidation.

First thing I would do put away the cards and DO NOT USE them for anything. If you do not have the money to pay for it then you do not need it.

I would then cut out any/all unnecessary expenses and put that money toward my debt.

 

[barkley]

do you belong to a credit union? if not can you join one?

credit unions tend to offer great deals with their no fee credit cards. ours is offering a rate of 1.9% for the first year for balance transfers after which it ups to 8.9%. you could get the Disney one transferred to a much lower rate which would mean more of what you pay each month would go to the principle.

consumer credit counseling is free-and they are a great resource on how to dig your way out of debt. other than that-as others have said, do your best to stop adding to the debt and throw anything extra you can at the debt each month. it may not seem like it, but every little bit helps, we took this attitude with our mortgage and paid it off several years early.

 

[footballmouse]

"I'm looking for any kind of suggestions to get me out of credit card debt"

How about this......spend less and pay your debt down. Live within your means. Don't need Dave Ramsey....it is really very simple people

Take home income
-bills
-savings
=disposable income

Maybe you didn't mean to come off sounding mean & snarky but you did. Did you ever consider maybe the OP had to put groceries or gas on the credit cards while they were without a job. If you've ever been unemployed, you do what you have to do to buy groceries & necessities. If this means charging them b/c you need the cash that week for insurance or the electric bill then you do it.

OP I would pay the minimum on both cards and then put some extra towards the higher rate card. I know tax season is still a little ways off but if you get any tax refund back put it all towards the higher rate card.

 

[RitaE]

I just want to clarify - the title of your post asks about "Debt Consolidation" but then you want to know if "An Agency" can get you lower rates.

Are you interested in Debt Consolidation, which is usually taking out one large loan to pay several smaller high interest loans or Credit Counseling, which is going to through a process where a Counselor negotiates with your creditors to get you on a payment plan in order to avoid more drastic deficiencies?

Are the credit cards in past due status? How is your credit score?

 

[PrincessGrownUp]

do you belong to a credit union? if not can you join one?

No, I don't belong to one. I remember doing a search for one and the nearest one wasn't close by. I'm assuming I would need to physically go to one? Thanks!

 

[PrincessGrownUp]

Maybe you didn't mean to come off sounding mean & snarky but you did. Did you ever consider maybe the OP had to put groceries or gas on the credit cards while they were without a job. If you've ever been unemployed, you do what you have to do to buy groceries & necessities. If this means charging them b/c you need the cash that week for insurance or the electric bill then you do it.

OP I would pay the minimum on both cards and then put some extra towards the higher rate card. I know tax season is still a little ways off but if you get any tax refund back put it all towards the higher rate card.

Thank you. Yes, most of my transactions are from the gas station or grocery store.
Yes, we plan on using our return on the debt. We don't get much back but it will help!!

 

[PrincessGrownUp]

I just want to clarify - the title of your post asks about "Debt Consolidation" but then you want to know if "An Agency" can get you lower rates.

Are you interested in Debt Consolidation, which is usually taking out one large loan to pay several smaller high interest loans or Credit Counseling, which is going to through a process where a Counselor negotiates with your creditors to get you on a payment plan in order to avoid more drastic deficiencies?

Are the credit cards in past due status? How is your credit score?

Sorry for the confusion, I must have worded the title wrong. I am not looking to take out a loan. I was wondering if I would benefit from one of those companies that take over, get your rates lowered, then you make the payments to them. By your definitions, I'm looking for a credit counselor. No, I have never missed a payment on any of my bills. Therefore, when I checked last year, my credit was good.

 

[Marionnette]

My debt (besides my mortgage) is 2 credit cards. I have approx. 10k on one card with 5.9% interest and $7.5k on the Disney Visa. I can't remember the interest but it's not great. Maybe 16%. I recently got a job after being laid off for a while. I am able to pay the minimum every month on them, and sometimes a little extra. At this rate, it will take me forever to pay them off!
Will it benefit me to use an agency because 5.9% is a low rate to begin with? Will they be able to get it lower? I can't stomach the cost of the interest rates every month!
I read that some agencies will not cancel but suspend the cards. I really don't want to close my Disney card account because I like the perks. We don't plan on going until the debt is paid off, but I wouldn't want to miss out on an offer for Disney Visa holders only. And.. I don't want to close my other card because of the awesome interest rate. Which is only 'awesome' if I have a balance. This is probably why I can't get out of this mess.
I'm looking for any kind of suggestions to get me out of credit card debt.

The Disney "perks" are designed for the purpose of getting you to put more charges on the card. You don't *need* those perks while you are trying to pay down the balance. Dump the card now and apply for another one when you're out of debt and ready to go back to Disney.

I don't know what you mean by the interest rate on the first card only being awesome if you carry a balance. The only time a CC APR is a consideration at all is when you carry a balance. Making charges and paying the card off completely each billing cycle means not having to care what the APR is. Do you mean that the APR only stays low if you continue to make charges on the card every month? If that's the case, charge $1 to the card each month and be done with it. Don't charge large amounts that only inflate your balance and make it impossible to pay off.

Then, go to this webpage and calculate how long it will take to pay off your credit cards paying what you can afford to pay each month.

TBH, there is no magic bullet for paying off debts. Even at 0% interest, you would have to pay on those cards for a very long time or at a very high monthly payment in order to get rid of $17.5K in consumer debt.

 

[hrslvr142]

I don't think you need to use an agency but I will suggest if you get any credit card offers that offer a $0 percent interest for a balance transfer AND you think you can pay off the debt from one of the credit cards during the "qualifying" period it may be worth looking at that option. Again only if you think you will pay it off in full, if not you will generally get stuck with a much higher interest rate then you currently have. Paying interest is never fun and can be upseting but as long as you are making strides to get these paid off I would keep going as you are. Another option that I have used is to not only pay the minimum but also the interest amount...doesn't do a lot but your principal does then go down each month. You can do this..just keep plugging away. Best of luck to you.

 

[wallawallakids]

I don't think you need to use an agency but I will suggest if you get any credit card offers that offer a $0 percent interest for a balance transfer AND you think you can pay off the debt from one of the credit cards during the "qualifying" period it may be worth looking at that option. Again only if you think you will pay it off in full, if not you will generally get stuck with a much higher interest rate then you currently have. Paying interest is never fun and can be upseting but as long as you are making strides to get these paid off I would keep going as you are. Another option that I have used is to not only pay the minimum but also the interest amount...doesn't do a lot but your principal does then go down each month. You can do this..just keep plugging away. Best of luck to you.

This is what I was going to suggest. I know how hard it is when you have debt to get it paid off. We needed to move for my husband's job back in 2008 and it was right after our son had a med-evacuation. We got slammed with medical bills, moving bills, and then our house was worth less then our mortgage, so we had to pay off the difference after that sale. Needless to say, we got into debt. It was hard, I will not lie! But we managed to pay every penny off and work our savings back up. We are now debt free (with the exception of our current mortgage). You can get out from under the debt. My best advice, set a strict budget. You can also try calling your cards and asking if they will decrease your rate. If they won't you can transfer to a lower interest card. Then pay the card with the highest interest first. Pay the minimum for now on the other. Get a good handle on how much you can add to that payment each month and cut out everything you can. We gave up coffee scared1, cable, all eating out, all shopping, movies, landline. Everything we could. We coupon like crazy and everything extra we got went to pay off that debt. We got creative on ways to have fun. (Free stuff, family movie night/game nights, church activities). It has been 6 years and we have not had any credit card debt for the last 3 years. It is a great feeling to live off cash again and not worry about paying the debt off. We are more aware now of our son's medical expenses (which will be a life long expense for him) but we know it and we budget for it now. We also have a savings account to help cover those things like unexpected car bills, home repairs, things like that. Every bonus or extra check we get now goes in there plus I put $1000 in there every month out of our paycheck. I am so used to living without the extras we cut out, we didn't feel the need to add them back in! I now save that money towards vacations and savings. OP, you can do this! I know you can. It will be hard but you can and you do not need to go the consolidation route. Once you pay off that debt you will be so proud of yourself and you will also have great credit (which you will not if you do the consolidation). Good luck!!

 

[hsmamato2]

-1-My debt (besides my mortgage) is 2 credit cards. I have approx. 10k on one card with 5.9% interest and $7.5k on the Disney Visa.

-2-I recently got a job after being laid off for a while. I am able to pay the minimum every month on them, and sometimes a little extra. At this rate, it will take me forever to pay them off!

-3-Will it benefit me to use an agency because 5.9% is a low rate to begin with?

-4-I really don't want to close my Disney card account because I like the perks. We don't plan on going until the debt is paid off, but I wouldn't want to miss out on an offer for Disney Visa holders only.

-5-I'm looking for any kind of suggestions to get me out of credit card debt.

First off.... and I am not trying to be snarky....
-1- I notice 2 things- you got 'laid off for a while' and $17,000 in cc bills on gas and groceries. That is a LOT of gas and groceries for a 'little while'. I say this b/c the first rule of managing your own money is understanding clearly HOW you got in this position, so you can avoid doing it again.
-2-paying the minimum is not good-take serious look at your budget and finances and funnel EVERY extra cent into the biggest bill first,make min. payments on the 2nd one,till the 1st is paid off, then take ALL the payments you were aiming into bill#1,and funnel it ALL into bill #2.(see pp comments about strict budgeting) and DO NOT use the cards AT ALL while doing this.
-3-Don't bother with an agency, you have 2 big bills,pay them off. The difference in interest will be smaller,the faster you apply yourself to my point #2 anyway.
-4- RED FLAG-If you are $17,000 in debt, and can only pay the minimum monthly, and you *say* you won't take a disney trip till it's paid off,then WHY would you need to keep that card 'for the offers'??? Saying this indicates (again,just reading a post,I don't know you) that you *might* just want to take advantage of more 'discounts'....and hanging on to that card 'just in case' will somehow benefit you.... If you can't afford to pay your bills,and you are worried about a few bucks in monthly interest (and you should be) then you should be 1000% ready to ditch that card and not rack up more debt to get that 'discount'.
-5- I hope you don't think I was trying to be snarky or mean, I am not. You asked for suggestions, those are my best ones.
Again, I don't know you, or how you got into this, but I do know the only way to get out is to get serious. You don't need an agency for this- you need a serious budget plan,one you can live with,and a payment schedule that will get you ahead of the game,it will take you quite a while, but it is doable.

 

[Mickeyluver37]

Sorry for the confusion, I must have worded the title wrong. I am not looking to take out a loan. I was wondering if I would benefit from one of those companies that take over, get your rates lowered, then you make the payments to them. By your definitions, I'm looking for a credit counselor. No, I have never missed a payment on any of my bills. Therefore, when I checked last year, my credit was good.

These companies don't do anything for you that you can't do yourself, and often times the rate is NOT lowered. The accounts will be closed, which will negatively impact your credit. You are better off just ceasing using them, and paying as much as you can towards getting them paid off.

 

[hsmamato2]

I don't think you need to use an agency but I will suggest if you get any credit card offers that offer a $0 percent interest for a balance transfer AND you think you can pay off the debt from one of the credit cards during the "qualifying" period it may be worth looking at that option.

again.... this is a stopgap measure..and usually doesn't work so well, for the above reason- 1st you apply to transfer at "0%" then you transfer ALL 17k onto that card. You get an offer of,say, 18 months to pay it ALL IN FULL. AND...you pay about 3% of that 17k to do this balance transfer. ($500 further debt)
If you can't RIGHT NOW imagine paying IN FULL $17,000 within 17 months (that's right folks, you have to have it all done before that due date or else)
If you don't pay it in full before that date ZOOM you're suddenly paying for what's left of your original 17k, plus the fee to transfer,plus the now applied APR and,wait for it, here's the kicker.... the APR applies to your ENTIRE bill for ALL THOSE MONTHS that were 'interest free'. That's right folks.... retroactive interest to all those months you weren't paying. (usually at a rate of about 26% if you are lucky)
As a cc rep. once kindly explained to me... "we are a LOAN company ma'am...that 'interest free' period is charged to your account daily. IF you pay in full by our due date, we ERASE that charge.(interest) If it is NOT Paid in Full, then you pay for that ENTIRE period."(their grace period).
SO they remove that fee,IF and only IF you pay in full.
According to OP post, they cannot pay more than minimum, so they would not be able to pay that amount within 17 months._Op, can you pay $1000 plus every month right now? And I'm no cc fees calculator...for more specific numbers ,bankrate.com probably has a calculator for everything. This is why my best suggestion is to pay your 2 bills,and don't add anything to the cc's till you do.

 

[pryncess527]

Do you budget, or do you track expenses afterwards? There is a BIG difference. I'd strongly suggest you look into a zero-based budget. youneedabudget.com is the one I use, but you could also just use a basic cash envelope system -- but you need a budget that lays out your choices clearly and IMHO, a zero-based system is the best way to get that clear picture.

Form a budget, throw as much money as you can at the debt and just start to make progress.

 

[barkley]

No, I don't belong to one. I remember doing a search for one and the nearest one wasn't close by. I'm assuming I would need to physically go to one? Thanks!

some credit unions now have on-line membership processing (ours just added this feature). I rarely if ever go to the brick and mortar locations b/c I can do pretty much everything with them on-line.

another advantage-some like mine offer free seminars at a variety of locations-ours is currently offering budgeting 101, becoming debt free, and organize your finances.

 

[Marionnette]

Sorry for the confusion, I must have worded the title wrong. I am not looking to take out a loan. I was wondering if I would benefit from one of those companies that take over, get your rates lowered, then you make the payments to them. By your definitions, I'm looking for a credit counselor. No, I have never missed a payment on any of my bills. Therefore, when I checked last year, my credit was good.

Your problem isn't the interest so much as it is the amount of debt that you have accrued. That will not change even if you go to a legitimate credit counselor.

Go here:
What will it take to pay off my credit card?
Put in your exact balances and interest rates. You can choose to calculate a pay-off time based on the amount that you can pay each month. Or you can pick the number of months you want it to take for you to be debt-free and it will tell you how much you need to pay each month to reach that goal.

I was in your situation, I would attack that Disney Visa balance with a vengeance (paying the minimum on the other card each month). There would be absolutely no spending on the CCs until they were BOTH paid off. Once the Disney Visa was paid off, I would then attack the other balance with the same intensity as I approached the Disney Visa.

I don't think getting another card with a 0% intro APR is a good idea unless you absolutely know that you can pay off $17500 in the time period that the promotional rate covers. Just for a reality check:

• To pay off that amount in 15 months, you would have to pay $1160+ each month, plus the balance transfer fee of up to 3% ($525 on $17500).
• OTOH, if you were to just set the same 15-month goal on your two CCs without even getting the interest lowered on either one, you would pay $693 on the higher balance and $555 on the Disney Visa each month for a total of $1248/month.
• Those numbers are both pretty high and probably not reasonable. And overall, the amount that comes out of your pocket is about equal, so why risk losing that "fabulous" rate on the account with the higher balance? It's possible that even with the best intentions you would not be able to pay off the transferred balance before it balloons into an outrageous APR.