Should I consolidate?

ncstl77 · ‎02-04-2008

Hi Guys -

I have recentlly began to undertake paying off my rather large amount of CC debt. Currently, I have the following balances, roughly.. All cards have the same APR (14.9%)

MBNA E-Loan Line of Credit - $2800 ($13,900 credit line)

Providian - $7400

Sears - $0 (Paid off in the amount of $1755 in January)

MBNA CC - $0 (Paid off in the amount of $2795 today)

Discover - $3300

As you can see, I have been carrying a large amount of debt on these cards. I haven't used ANY of them in over 3 years, but stupidly never focused on paying them down. I have about $2500/mo of disposable income that I plan to devote entirely to paying these cards off. That means I should have them all at $0 balance of thereabouts within 8 months or so. My question is this, should I consolidate all the debt on the 1 card that has the larger $13,000 credit limit? The APR is the same on all 4 (I used them to negotiate APR against each other), so as far I can tell consolidating wouldnt lower my interest payments at all. However, I'm curious if consolidating these would have any effect on my current FICO score (negative or positive). The upside to me would be simplifying my strategy for paying off the debt instead of having to continue making minimum payments on 3 cards while dumping large amounts into paying off another. However, its not that big of a deal if I am going to risk lowering my FICO by consolidating the debt onto 1 account.

On a side note, I am quickly becoming obsessed with this site. It's a great tool! I never realized how addicting it can be to get involved in my credit. It's actually a very rewarding thing to payoff credit cards that I've been carrying large balances on for a long time. It's very liberating! I find myself logging in to the CC websites daily just to clikc an see my new $0 balances!!

Thanks for any input!

Nick

Anonymous · ‎02-04-2008

Welcome ncstl77 !

This is my opinion. It is better to apply for the 0% APR on purchase and BT for 12 mos or more to avoid the interest. You will save large money by this action. As you said, of cause it will take some of your FICO score. But, it will comes back as you use the card and make the payments.

I can't say you can get larger than 13K CL when you apply for a new card. It depends on your income and etc. You many need to apply for at least 2 CCs.

If you apply for 0% APR on BT ONLY. Make sure do not use that card for purchases. Because ___% interest will apply for those purchases.

Research well, and choose the one you really want to apply.

Citi ... lower APR than Chase 12 mos later.

https://www.citicards.com/cards/wv/cardDetail.do?screenID=932

Chase Flexible

http://www.firstusa.com/cgi-bin/webcgi/webserve.cgi?partner_dir_name=cac_chase_flex_rewards&page=ind...

Amex Blue Cash ... 0% APR for 6 mos

https://www143.americanexpress.com/cards/home.do?pmccode=77#CARDS/77/0/0/-1

Message Edited by bunnyrabbit on 02-04-2008 11:56 PM

Anonymous · ‎02-05-2008

Transferring to keep the same APR doesn't really do you any good financially. I've read on here that people believe consolidating like that hurt their FICO b/c even though their overall util% stayed the same, it looked bad to have a single card with such a high util%.

If you can consolidate on a lower interest card, go for it to save the money. Your util% is going to drop like a rock anyways with those kind of payments.

Anonymous · ‎02-06-2008

Other than apply to new cc, here is what you can do.

What is CL on your Sears, Discover and Providian cards?

Have you call and ask MBNA and Sears about BT offer?

If they give you special BT offer, you can transfer some of the balance from Providian and Discover to bring the utility down on each card.

You may want to wait for the respond from more experienced contributors.