OK folks...I really need your credit brainpower and advice...

[Anonymous]

LIke most all of you I want to get out of debt.  I have learned that to do this you have

1.  Stop using the card

2.  Call the CC and try to lower your APR or other solution so that your payments hit more of the principal

3.  DONT pay the minimum and try to pay several times a month; even if it is on like $50 more each payday extra.

4.  Of course, if you use your CC try to PIF.

5.  Use other disposable income to pay off debt

I just can NOT seem to catch up and get even and it is KILLING ME!!!!  So please anyone, someone tell me if company's like Egg, The Lending Tree, etc are they WORTH it?  Who here has experience using any of these loan consolidation company?  Who should I stay away from?  What is a list of top 3?  Please I really need to get out of debt.  All advice and suggestions are greatly appreciated.  Thank and as always enjoy what remains of your day.

[Anonymous]

What credit cards do you have and what are the balances to credit limits?

Did you experience an exepnsive life emergency or is this general spending that is not in control?

How much impact are the payments in relation to your income?

[NRB525]

+1

OP please list out the cards, their limits, current balance and APR. Include cards with no balance.

Are the card images in your signature all of the cards you have?

In answer to your question, no, Lending Tree and similar loan sharks are not a good way to go. Full stop.

You'll get some good ideas from the forum after you list out your cards and balances.

[BornSupercharged]

If you're serious about getting out of debt, here's what you do.

1) Stop using your credit cards. ALL of them. Forget about points/miles/bonuses. Forget credit cards even exist. Cut them all up if you need - you can always order replacements later. Literally cut them up so you cant use them.

2) Pull out CASH to use for food. Set yourself a budgetary spending limit, like $50/week is what you're going to spend on food, and once you've burned through your cash, you will have to explain to yourself where it went and why you missed your budget. Of course you don't have to starve yourself, but ham and bread costs $4 and that's what I try and eat for lunch every day - a lot cheaper than buying "Combo meals" at fast food places, or lunch entrees at a restaurant. Figure out what works for you, but eating at home and using cash to buy food will cut down on your spending.

3) For anything you pay that requires a "credit card", or makes life infinitely easier to autopay (utility bills, etc) - do NOT use a credit card to pay it. Use your debit card. This way the money is IMMEDIATELY taken out of your checking, and what you see in your online banking is what you actually have. When you pay with a credit card, it's deceiving because it will continue to add up and you don't really know how much you've spent until that statement cuts and you're trying to PIF, but you overspent and now you've gotta carry a balance. That's how debt starts and snowballs. 

4) Those loans typically have stupid high interest rates. Your BEST bet is to get a 0% balance transfer, 18mo preferred but 12mo is fine as well, with a low 2 or 3% balance transfer fee. Chase typically has offers for 2%, Discover normally has 3%, currently Navy Federal has targeted 0% for 12mo with zero fee which is amazing. I would recommend you exhaust other options before getting one of those loans.

[SouthJamaica]

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@Anonymous wrote:

LIke most all of you I want to get out of debt.  I have learned that to do this you have

1.  Stop using the card

2.  Call the CC and try to lower your APR or other solution so that your payments hit more of the principal

3.  DONT pay the minimum and try to pay several times a month; even if it is on like $50 more each payday extra.

4.  Of course, if you use your CC try to PIF.

5.  Use other disposable income to pay off debt

I just can NOT seem to catch up and get even and it is KILLING ME!!!!  So please anyone, someone tell me if company's like Egg, The Lending Tree, etc are they WORTH it?  Who here has experience using any of these loan consolidation company?  Who should I stay away from?  What is a list of top 3?  Please I really need to get out of debt.  All advice and suggestions are greatly appreciated.  Thank and as always enjoy what remains of your day.

---

Borrowing from Peter to pay Paul is not a good formula for getting out of debt. It's a formula for getting into worse debt. Also those companies are listed as "finance companies" which can hurt your FICO scores.

As to the points of advice you mentioned,

1. ok

2. not a good idea to talk of 'other solution'. even asking for lower apr is unlikely to succeed where you're over your head in debt but i guess there's no harm in trying. do NOT however tell them the reason you're asking for it.

3. ok

4. ok

5. ok

One formula that has worked for some people is to

1. stop using cards

2. pay minimum + $5 on all accounts every month

3. whenever you have something extra you can pay, apply it to lowest balance card until it's paid off, then start working on next lowest balance card

Some folks have found success with a variant of item 3.... applying the extra payment to card with highest interest, then when it's paid off moving on to next highest interest card. I think 3 is best because it lowers your total monthly payments the fastest.

[Anonymous]

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@BornSupercharged wrote:

If you're serious about getting out of debt, here's what you do.

1) Stop using your credit cards. ALL of them. Forget about points/miles/bonuses. Forget credit cards even exist. Cut them all up if you need - you can always order replacements later. Literally cut them up so you cant use them.

2) Pull out CASH to use for food. Set yourself a budgetary spending limit, like $50/week is what you're going to spend on food, and once you've burned through your cash, you will have to explain to yourself where it went and why you missed your budget. Of course you don't have to starve yourself, but ham and bread costs $4 and that's what I try and eat for lunch every day - a lot cheaper than buying "Combo meals" at fast food places, or lunch entrees at a restaurant. Figure out what works for you, but eating at home and using cash to buy food will cut down on your spending.

3) For anything you pay that requires a "credit card", or makes life infinitely easier to autopay (utility bills, etc) - do NOT use a credit card to pay it. Use your debit card. This way the money is IMMEDIATELY taken out of your checking, and what you see in your online banking is what you actually have. When you pay with a credit card, it's deceiving because it will continue to add up and you don't really know how much you've spent until that statement cuts and you're trying to PIF, but you overspent and now you've gotta carry a balance. That's how debt starts and snowballs. 

4) Those loans typically have stupid high interest rates. Your BEST bet is to get a 0% balance transfer, 18mo preferred but 12mo is fine as well, with a low 2 or 3% balance transfer fee. Chase typically has offers for 2%, Discover normally has 3%, currently Navy Federal has targeted 0% for 12mo with zero fee which is amazing. I would recommend you exhaust other options before getting one of those loans.

---

This is seriously good advise. A younger, dumber version of me had problems with #1. When I got my first big card - Amex with $10k limit, I went crazy with it. It took me some time to realize $10k limit is not same as $ 10k cash in your bank - I actually had alomost no cash in my bank :'(

Credit cards incentivize spending- 3% CB at gas stations, 6% CB at grocery stores, $500 CB for spending $4000 in 3 months. It is so easy to spend more than we can afford to. Spend with you means and realize that 1% or 2% or whatever chunk of CB comes from the 100% you are alredy paying for the product. The bank is not giving us any new money, they are giving us a tiny part of what we already pay but they brand it as a gift from the bank. Don't fall for it OP, definlitely live within your means and don't make purchases you wouldn't normally do.

"The price of anything is the amount of life you exchange for it" - Thoreau

[CreditInspired]

Hi OP,

First, I agree with all the responses given.

Second, for me, knowing what is coming in (income) vs. what is going out (expenses) are of utmost importance.

Tracking everything -- and I mean down to the penny -- helps me stay on track. I use two things religiously: 

1. Excel for tracking all my bills -- credit cards/loans, rent, utilities, insurance, cable, cell phone, taxes, etc.; and
2. CheckBook for tracking all income and expenses, to include groceries, incidentals, and any other extraneous expenses.

I've also cut out unecessary things for me like cable (I use Over the AIR, which is free antenna cable), Starbucks (brew my own coffee), and use my iPhone's Personal Hotspot as a modem so I don't need in-home Internet service).

It is amazing how using these two simple tracking measures have kept me on track and aware of every cent I have available to spend single day.

You've made the first step -- realizing you need to get out of debt.

Good luck to you.

[Anonymous]

I like this approach:
http://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/

[Dalmus]

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@CreditInspired wrote:

Hi OP,

First, I agree with all the responses given.

Second, for me, knowing what is coming in (income) vs. what is going out (expenses) are of utmost importance.

Tracking everything -- and I mean down to the penny -- helps me stay on track. I use two things religiously: 

1. Excel for tracking all my bills -- credit cards/loans, rent, utilities, insurance, cable, cell phone, taxes, etc.; and
2. CheckBook for tracking all income and expenses, to include groceries, incidentals, and any other extraneous expenses.

I've also cut out unecessary things for me like cable (I use Over the AIR, which is free antenna cable), Starbucks (brew my own coffee), and use my iPhone's Personal Hotspot as a modem so I don't need in-home Internet service).

It is amazing how using these two simple tracking measures have kept me on track and aware of every cent I have available to spend single day.

You've made the first step -- realizing you need to get out of debt.

Good luck to you.

---

 That's a fantastic idea.  Its easy to save $150+/month if you don't have cable AND you don't need home internet. I recently dropped my DirecTV sattelite for this very reason.

 However, if you DO need home internet (if you don't have an unlimited data plan on your phone, or your carrier doesn't not allow tethering without a limit), drop down to the lowest avaialble high speed (TimeWarner has a $20/month 2mb plan, for example), and a $35 investment can get you a Roku or a Fire Stick.  There are a LOT of free apps (like Crackle) on those devices that will allow you to (legally) stream a lot of content without any sort of paid subscription. 

 I only point this out because some people fail at getting out of debt because they deny themselves ANY luxury, and they can't handle it and just go back to spending after a couple of months.  Unless you are in danger of missing your housing payment and car payment, a little luxury can be budgeted in.

 Switching over to your debit card or cash everywhere possible is a must in order to get ahead on your credit cards.

[BirchBarlow]

From now on, use one of these in lieu of a CC (shred them if you must).