NSBR: Loan consolidation?

[schock77]

Another post where I need a rec... I have a couple of credit cards I'd like to consolidate, but a little scared about it. Has anyone done this or have advice?

My little sis did with her husband- but of course, they're now divorced so that messed her up- and she's weary.

TIA!

[ditzyscrap]

DH and I have done it, more than once, lol. We ended up bankrupt soon after, but we weren't careful with our credit cards after we'd cleaned them off. The interest rates on consolidation loans isn't really better than credit card interest - sometimes worse - at least the places where we were able to get them.

If you want it to work for you, what you need to do is clean off the credit cards, put them away for EMERGENCY use only...and then slap as much money as you can on that consolidation loan. At least with a consolidation loan, the payments will eventually get you somewhere, unlike a credit card where the interest adds up and adds up so you end up paying just interest most of the time. In my experience, the minimum payments for consolidation loans is quite a bit higher than the minimum payments for credit cards, though.

[schock77]

I guess what I really want is just to consolidate the 2 credit cards- one has high interest rate. Not too much money on them (compared to the national average anyway)...

I don't even think about my mortgage, car loans or school loan- as far as I'm concerned those are necessary debts. :)

[MelindaH]

Well, I may be interpreting what you are asking differently, but I have done something like this using balance transfers. I've either opened a card or used one with little to no balance that was offering a great rate (UNTIL THE BALANCE IS PAID OFF -- this is important) and then paid off the higher interest rate card so that it is all on one card.

It has really worked for me. I have a card that has 5.99% interest on it that I will be paying off soon, and I definitely attribute it to moving a balance from a 13% interest rate card, and being diligent about paying more than the monthly minimum payment! :)

Does that help at all? If it does, check your card's interest rates and balances, and if you need to shop around to open a new one. I don't know if the balance transfer offers out there are as good as they used to be (since cc companies are trying to bring in more revenue to cover their butts from bankruptcies, etc), but you might get a great deal!!

~Melinda

[LibbysMommy]

A couple of years ago, I got a card with a 0% APR on balance transfers. I transferred the balance on 2 of my cards to that one and closed out those 2 cards. It definitely helped!!

[MelindaH]

A couple of years ago, I got a card with a 0% APR on balance transfers. I transferred the balance on 2 of my cards to that one and closed out those 2 cards. It definitely helped!!

Awesome deal!

[nikkiARNGwife]

A couple of years ago, I got a card with a 0% APR on balance transfers. I transferred the balance on 2 of my cards to that one and closed out those 2 cards. It definitely helped!!

Ditto..we did this when we were first married b/c we had WAY too many credit cards between us. Now we only have one card for emergencies but consolidating them onto a low interest rate card really helps.

BTW..did you know you can pretty much demand a lower interest rate on existing cards in most cases? When we were paying off our debt, we had a couple of cards with really outrageous interest rates and DH called them up and basically said, "lower our interest rate or we're transferring our balance to a card with a lower rate" and they did. It never hurts to try kwim?

[schock77]

This is exactly what I need to do girls... I knew I could count on my SSD friends for advice. :)

[dabittymama]

A couple of years ago, I got a card with a 0% APR on balance transfers. I transferred the balance on 2 of my cards to that one and closed out those 2 cards. It definitely helped!!

We did this 3 years ago and as of last March we are credit card free!!! It really helped us...BUT we stopped using them and saved saved saved to pay way over the min payment. We still have cards but just use them for purchaces we already have the money for to keep some running credit.

[maryinaz]

A good thing to do if you want to use a credit card, especially if you use online banking, is go right in and pay that exact amount you just put on your card.

[Laura_A]

If you DO consolidate... CLOSE OUT the cards you clean off... cuz so many times people have the best intentions, but they end up charging on them again and now they have DOUBLE the debt cuz they have the consolidation loand AND the new balances on the cards. I use to do lending for a bank and when we loaned money for consolidation, we actually made it mandatory that those cards were closed... and we called and did it for them. lol

[pbumbaca]

Do you own a house? If you do you may want to get a home equity loan instead, the rates may be low right now and you can deduct the interest!