topic Re: To consolidate credit cards or not is the question in Credit Cards

To consolidate credit cards or not is the question

Anonymous — Tue, 02 Feb 2016 17:24:33 GMT

hello,

first off I want to thank everyone on this forum! I am a long long time lurker and you all have help me rebuild my credit big time. I am posting this Bc I have some questions in regards to credit card consolidation. i have a decent job that makes a bulk of my income based on bonus that I receive every quarter. Last year I made 102k and my salary is 70k. I have committed the big no no and started to live life like the bonus $ is guaranteed and with the downfall of the oil industry it has really hurt my business and bonus money is not coming in like it use to. My spouse has a job but makes very little.. I have made worked extremely hard to rebuild my credit from college when I had a score of around 500 to now around 691/705. It took 7 years but very proud of how far I have come.. With the great new credit score and a blown car motor that cost me several thousands to repair on a financed car I have accumlated around $10,000 in credit card debit and I'm starting to feel a little uncomfortable.. Not so much making the min. Payments but the 23% interest rates i feel like I'll never get out of debit.. The original plan was to pay all of these credit cards off with my year end bonus money before the 0% ran out but like I said due to the oil field bonus money was not even close to what i expected. I am paying all of my bills on time and never miss but leaves me very little every month left over and cannot save any funds for a rainy day. I defiantly have learned my lesson about living a life on bonus money. I wanted you all advice on what I should do to get out of debit and be able to save money again. I really appreciate the help.

Fico score - 705 trans 691 equifax income salary without bonus 70k a year

Back to the conslidaton loan - I was approved for a $9100 CL from lending tree with a intrest rate of 9.75 and apr of 12.94 for 36 months monthly payment of $293. This is a far lower rate than my CC all over 22%.

Break down of debit -

Discover old -$4145 /6500 apr -19.24 - min payment -$90

Discover new -$2797/5300 apr-0% until July then 21%- min pay $58

Cap one -$2127/2300 - apr - 23.15% min payment $63 -

amex- 440/1000- apr 0% until Jan 2017 - min payment - $35

Best Buy 518/1000- 0% until Nov 2016 - min payment - $25

Total debit - $10,027 - total min payment - $271

auto loans -

elements credit union - 22,731- 60 month loan - 2.1 apr - monthly payment- $429- blown motor car now repaired

TD bank - 28,099- 72 month loan - 7% APR- monthly payment - $468- will refiance new account traded a high payment lease in saved $200 per month

rent- $1150 a month - where I live this is a good deal

monthly bills -

auto insurance- $200 a month

electricity- $180-$200 a month

water - $30 a month

cell phone - $100 a month - spouse I have company cell

Cable/internet - $140 a month

gym - $60 a month - this is my entertainment can't live without lol

Total bills - $1607 per month

like I said I am making all the min payment and paying all of my bills but leaves very little left and I for sure can't save any $

do you think doing the conslidaton loan is the way to go ? This will wipe out all credit card debit and hopefully raise my scores even higher so I can refiance my auto loan to get better rate and lower my monthly payments ?

Discover offered the following balance transfers -

$4145/$6500 - 0% apr for 9 months - 3% fee than after 19.24 variable apr

or 5.99 apr for 18 months - 0% fee- than 19.24 variable apr

discover #2

$2797/$5300- 0% apr for 12 months - 3% fee- than 11.24% variable apr.

never done a balance transfer before and not sure I could pay these off in 12 months and for sure not 9 months.

Any help or advice will be greatly appreciated !

Re: To consolidate credit cards or not is the question

Dalmus — Tue, 02 Feb 2016 17:58:39 GMT

By my math, you are at 62% utilization. That's kind've high. What are your current credits cores?

A debt consolidation loan CAN be a recipe for disaster... If you are living on a tight budget, the temptation to keep using those credit cards after you pay them off with the loan is very real. If you do this, you might get yourself deeper into debt.
$200/month for two cars for auto insurance seems high. There might be a savings there if you shop around. Are both cars on the same insurance getting a multi-vehicle discount?
How old is the car and loan for 7%? Are you underwater? How many months left on the note?
Any chance you can throw some money at the two low-limit cards and wipe them out? You can then throw that extra $60/month at the Cap 1. As you pay that down faster, your scores will bump as you back away from being maxed out on it like you are now.

If you do go with a debt consolidation loan, take all those high limit cards and the Best Buy, put them in an envelope, and tape it to the wall behind the refridgerator. Keep the Amex handy to use in an emergency. (0% apr for another 11 months, same as cash, but you have a couple months to spread out the payments).

Why behind the fridge? Because its a pain to do, and not as easy as pulling a card out of the sock drawer.

Re: To consolidate credit cards or not is the question

Chris679 — Tue, 02 Feb 2016 17:59:05 GMT

I would take the loan and then start living within my means.

Re: To consolidate credit cards or not is the question

Anonymous — Tue, 02 Feb 2016 22:19:29 GMT

Thank you for the response -

curent scores -

705 trans 691 - equifax

yes both cars are through Gieco and have full coverage. I think it's a little higher due to both cars being 2 doors. One being a sports car

The car loan at 7% is 2 months old. I refinanced my other loan and received a rate at 2.9% - currently thinking about doing a refiance now on this loan.

i was not going to use the CCL to remove the Lower two balance cards. I think I can pay them off rather quickly.

I have no intent to ever use these credit cards again since they were only used originally for big purchases... Since those are now purchased I would only ever use if something bad ever happend I was in a bind. These are not used for everyday purchases only major purchases. Example auto repairs to replace blown motor

Re: To consolidate credit cards or not is the question

Anonymous — Tue, 02 Feb 2016 22:20:38 GMT

Anyone else ? I really appreciate the advice and support

Re: To consolidate credit cards or not is the question

Anonymous — Tue, 02 Feb 2016 22:21:24 GMT

Thank you for the advice. That is the plan going forward that is why I was thinking of doing this CCL

Re: To consolidate credit cards or not is the question

Anonymous — Tue, 02 Feb 2016 23:20:09 GMT

My advice is to do what I had no choice but to do when I filed Chapter 13. Make a detailed budget which includes savings. Stick to it no matter what. I had a Care Credit account I used for medical or asked doctors/plumbers/air conditioning repairmen if I could pay monthly rather than the entire amount. Everyone, without exception, said yes. I spent five years doing this and now I do it automatically even though now I have credit and other resources. Good luck to you! It can be done and it feels so good!

Re: To consolidate credit cards or not is the question

Anonymous — Wed, 03 Feb 2016 03:47:57 GMT

Thank you I willl look into that.