Getting out of debt!?
I am about $4,200 in debt on 4 cards all of which the interest rates are in the double digits between 16-28%. THIS SUCKS. the minimum payments are sky high and I'm feelin it. I've been seriously thinking about going to a debt counseling agency particularly Consumer Credit Counseling Service but have heard mixed reviews. I've been reading that I can handle this myself by paying off the highest interest card first, but does that mean abandoning the payments on the rest of the cards till I've finished paying off the highest interest card? That seems like it would hurt my FICO score which is fair right now, almost at 600. Would taking out a loan from my credit union be smater? thanks and help! Correction my credit is at about 650
Public Comments
- If you can get a loan from a credit union at a lower rate, then that is a reasonable solution as long as you don't add any additional debt. Debt counselors are also good because they can arrange to reduce the debt and arrange a payment schedule that will work for you. Either way, cut up the cards that you have.
- Whatever you do, try to make at least the minimum payment on all cards. If you pay more on one and let another go, it will HURT your credit score.
- Credit unions are some of the best sources for low cost loans. If your credit union will give you the loan, go for it! Immediately upon paying your cards off, CUT THEM UP!! Do not "close" the accounts, just destroy the cards. At the expiration date the Credit Card companies will send you new, replacement cards. By that time you should be in better financial situation and be able to negotiate with the Credit Cards companies YOU wish to keep, for a more reasonable interest rate. Good Luck.
- Yes, you need to keep making at least the min payments on all the cards. I would pile cash on the smallest amount instead of the highest interest. You'll pay it off faster and it will keep you motivated to get the next one. Interest is not the real problem. Its your spending.
- lol i was just writing about this. I went with a counseling agency- Debt Counseling Corporation. My cousin- 2 months later- went with a consolidation loan from her bank. I am all done and my cousin is still paying--whats worse, she did not close out the credit cards and not only has the loan, but also has her credit card payments now. It really stinks. I did a lot of research before i went with DCC--I recommend them to anyone--they helped me with budgeting and really gave me good advice. You could tell that they weren't in it just to get me on the program. I would check them out before you went with that other company. They gave me the best payment amount--i still got my statements and saw everything working! here is their website: http://www.debtcounselingcorp.org
* Some answers may have been provided by Yahoo! Answers.