Consolodating?

[Anonymous]

Hello,

I have about $55k in CC debt.  I just calculated an average of my interest rates, weighted by the amount of dollars at each rate, and I am paying an effective rate of 7.901% on my entire debt.  Problem is, while quite a few of the low rates are permanent, some of the super-low promotion rates are going to expire in a few months.

My question is, should I just keep paying my CCs or look for one of these consolodation programs?  I hear some stuff on the radio that sounds super-fishy, but I'm guessing there must be more legitimite stuff out there too.  What would you recommend?  And how do I know what's a scam and what's not?

Also, do these consolodation programs offer rates that would be below 7.9%?  And do they let you pay off your balance faster than scheduled?

Finally, does consolodating lower your credit score?

I've been going to school for the past few years, so that's how all this piled up.  I do have a very good job now at 75k/year, but still, $55k is about what I make in total after taxes...   So I still feel like I'm in over my head.

Thanks!

[Anonymous]

In general, entering a payment program will hurt your credit,  You can contact your creditors yourself if you feel like taking them on, asking for lower rates and payment options, I think all the large CC issurers have departments setup just for that, I'd send out feelers to check if your accounts will be closed shoud you ask them about it.

The companies advertising they'll eliminate your debt on the other hand, will drop a wrecking ball on your life, as they simply stop paying your creditors until you are seriously delinquient and your creditors decide it's better to work a deal with you to recoup some money rather than take a total writeoff, That is a very drastic step,

I don't have any experience with those consolidation companies, however these days there are a plethora of them advertising every hour on the radio, tv and all the news papers so I can't help but see them, and I'm sure most of them are scams,

I'm sure others on here have experience with real companies, hopefully they'll repond.

[Anonymous]

Thanks for the info.  I also did some more research and I think I'll pass!!

I can definitely handle my payments, and I've never been late.  Once my paychecks start coming, I'll just start paying off aggresively and hopefully some of my card companies will notice and start offering those low rate balance transfers again, once they see they are losing interest income.  

BTW, are CC companies still offering those low rate balance transfers to people?  They stopped with me, but I'm wondering if that's because I've come too close to the limit on a couple of my cards, or if it's due to the credit crisis.  

[Anonymous]

Live cheaper, pay the debt.

[GregB]

I know 2 people that worked for such companies and have seen a number of clients in one business that signed up for those programs. I haven't seen one that wasn't just looking to make money from desperate people looking for help. I suppose it is possible that there are legit ones but it seems a desperate move IF there is one.

You scores should be great once you pay off your debt. Just resist the temptation to splurge now that you have finished school and started to work.

When my utilization went from 20-30% to 40-50% due to increased balances on personal accounts that show on my reports, the offers slowed down and the rates were higher. I think they have started heading the other way at this point but it is still a bit early to tell. I just recieved a 0$ for one year offer but it is on an account that is 79% utilization.

[oracles]

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@Anonymous wrote:

Thanks for the info.  I also did some more research and I think I'll pass!!

I can definitely handle my payments, and I've never been late.  Once my paychecks start coming, I'll just start paying off aggresively and hopefully some of my card companies will notice and start offering those low rate balance transfers again, once they see they are losing interest income.  

BTW, are CC companies still offering those low rate balance transfers to people?  They stopped with me, but I'm wondering if that's because I've come too close to the limit on a couple of my cards, or if it's due to the credit crisis.  

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This is definitely the case. Because your util% is high overall (i am assuming) and you have high util% on individual cards, credit card companies see you as a risk and therefore have reduced their offers to you. Once you have paid down your debt, you will start to see an increase in offers.

You definitely make enough money to comfortably pay off your credit cards.

Do not use the services of these companies because they will ruin your credit.

[Anonymous]

Yeah, I definitely have decided just to stick with paying straight to my CCs.  Some of those programs are downright insane.  I was only considering some sort of consolodated loan, but it turns out your probably need to own a house to do that (which I don't).  I definitely wouldn't consider these "don't pay your bills" programs.

I think I can put about 1/2 of each paycheck toward my CCs.  My credit isn't too bad now (668/674/656), and I figure that once I pay these suckers off it will be golden!!

BTW, anyone know how often credit scores are updated?  

[oracles]

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@Anonymous wrote:

Yeah, I definitely have decided just to stick with paying straight to my CCs.  Some of those programs are downright insane.  I was only considering some sort of consolodated loan, but it turns out your probably need to own a house to do that (which I don't).  I definitely wouldn't consider these "don't pay your bills" programs.

I think I can put about 1/2 of each paycheck toward my CCs.  My credit isn't too bad now (668/674/656), and I figure that once I pay these suckers off it will be golden!!

BTW, anyone know how often credit scores are updated?  

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Credit scores can change anytime. There isnt a set time.

when there is a change in anything on your report, there could be a change in scores.

If you credit card reports a balance this month and did not report one last month, you will see a change.

There are many ways your score can change at any moment.

Also understand, your score is base on your report at that time. It is a snapshot of your report at that time.

Hope this helps

[Anonymous]

One more thing...  Does seeing your own score effect it?  I have citi identity monitor, and I've gotten in the habit of checking my report pretty often.  Is this bad to do?

Thanks!

[oracles]

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@Anonymous wrote:

One more thing...  Does seeing your own score effect it?  I have citi identity monitor, and I've gotten in the habit of checking my report pretty often.  Is this bad to do?

Thanks!

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Not at all, there are many people on here that check there reports everyday.

I commend you for checking. Keep on top of your report.

It does not effect yuor score one bit by checking it yourself.