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vancejohnson82
03-03-2011, 04:26 PM
Hey guys, I'm not in a terrible amount of debt but I was starting to think of rolling a few of them into one bill. More or less to make it easier to stay on top of things and having to just pay one bill.

What's the deal with these things? Scam?

SonOfLe-loLang
03-03-2011, 04:29 PM
i think that **** kills your credit

Smiling Assassin27
03-03-2011, 04:30 PM
Hey guys, I'm not in a terrible amount of debt but I was starting to think of rolling a few of them into one bill. More or less to make it easier to stay on top of things and having to just pay one bill.

What's the deal with these things? Scam?

Before you do, check out this site:

https://powerpay.org/

As for the problem of keeping track of multiple debts, the above site will give you a month by month, bill by bill, plan in order to get out of debt the fastest. The only way you'd want to consolidate existing debt would possibly be if you could get a tax deduction with a HELOC or something.

If tracking bills is the problem, your online banking might have bill pay. I just started using this service 3 months ago and really don't know how i got along without it.

vancejohnson82
03-03-2011, 04:33 PM
Before you do, check out this site:

https://powerpay.org/

As for the problem of keeping track of multiple debts, the above site will give you a month by month, bill by bill, plan in order to get out of debt the fastest. The only way you'd want to consolidate existing debt would possibly be if you could get a tax deduction with a HELOC or something.

If tracking bills is the problem, your online banking might have bill pay. I just started using this service 3 months ago and really don't know how i got along without it.


thanks man! Yea, I've been using an Excel sheet to track everything but I just missed another payment, more or less because I paid it too early (before my bill cycle ended) ....its stupid and I guess I'm lazy

does it kill your credit? I just keep seeing all of these commercials for these programs and its hard to find the information on them over the internet so I figured I would reach out

Smiling Assassin27
03-03-2011, 04:50 PM
thanks man! Yea, I've been using an Excel sheet to track everything but I just missed another payment, more or less because I paid it too early (before my bill cycle ended) ....its stupid and I guess I'm lazy

does it kill your credit? I just keep seeing all of these commercials for these programs and its hard to find the information on them over the internet so I figured I would reach out

depends on what mechanism you use to consolidate. if you're considering something like Consumer Credit Counseling, I'd have to say that unless you're struggling with the actual amounts you are paying, pass on it. If money isn't the issue, Power Pay will do better than CCC or another debt management company that will likely a)charge you for their service and b)negotiate deals to drop payments/interest which could negatively effect your credit. Power Pay works within your current financial situation and sets it up so you basically get a reverse pyramid of debt reduction without compromising your credit.

if you look at a consolidation loan, i don't think it will kill your credit, as it'd only be one (assuming you already have your lender picked out) inquiry on your report. the thing you'd want to think about is that credit scoring is partly a function of your debt balance relative to your available credit, so a new loan might negatively affect your score while the newly freed up space on your cc's you just paid off will, for the most part, positively affect it.

MrPeepers
03-03-2011, 05:30 PM
i would not encourage any debt consolidation company, they do nothing you cant do yourself, if you really want debt consolidation "relief" contact a local non-profit consumer credit counseling center.

the one good thing about a FIXED Rate loan to consolidate bills it is it will help credit as usually you are eliminating revolving credit, just don't f*ck it up by suddenly using your revolving accounts again. If you want a loan go to your bank or credit union and shop them. Chances are if your debt load is too high you may not qualify, Debt Ratio needs to be below 55% max to qualify and credit in the 675+ range.

If nothing else just start attacking smallest debts first to build some confidence and carry over the extra to debts as you pay them down.

Good luck.

WolfpackGuy
03-03-2011, 05:42 PM
I don't know how many cards/creditors you have, but try to pay off the debt with the highest RATE first with more than the minimum payment, pay minimums on the rest, and just make your way down the line.

I've never been in a situation to try debt consolidation, but I'm also wary of it.

vancejohnson82
03-03-2011, 05:46 PM
I don't know how many cards/creditors you have, but try to pay off the debt with the highest RATE first with more than the minimum payment, pay minimums on the rest, and just make your way down the line.

I've never been in a situation to try debt consolidation, but I'm also wary of it.

It's not a whole lot of debt and only three cards....paying minimums gets me out of debt in 3 years, so I guess I'll stick with that

Mr. Elway
03-03-2011, 05:51 PM
Nothing wrong with consolidating your debts, and there is no reason for it to do any real damage to your credit score. You should take a look first at your current FICO score and do some reading to understand how it is calculated approximately. You can get a $15 score and lots of useful information on www.equifax.com (http://www.equifax.com), among other places. Don't buy anything more than your basic, one-time $15 credit reports, they are a waste of money.

You can consolidate your debt using a variety of means, basically you want a loan to cover the balance at the lowest rate possible. I did it by getting a low interest rate credit card from my bank with zero APR on transfers. The APR lasted for 12 months, during which time I paid the debt off with no interest. My credit score at the end of the 12 months was better than the beginning. There is a small FICO penalty for having the newer credit account, but that is offset by the lack of revolving debt and smaller debt to credit ratio. The biggest thing by far for FICO score is a perfect payment history and not having any bankruptcies, etc. If you stop borrowing money and pay off your debt your credit score will take care of itself.

The key to paying off debt is the same as the key to saving money- stick to an aggressive payment plan and take that money out first before you have a chance to spend it. Moving to a cash allowance for discretionary spending was a game changer for me also.

I wouldn't use a credit counseling company. All the information you need is readily available online, and the financial education will serve you faithfully for the rest of your life, as well as any children you might have.

One final piece of advice is to sign up at www.mint.com (http://www.mint.com) and enter all of your accounts. It's a nice way to securely track all your finances in the cloud for free.

EDIT: Forgot to mention - The trick with the zero APR is you need to pay off the entire original principal during the introductory period, otherwise you get charged interest on the entire principal at the end (if there is so much as a penny of it left). It's really important to read the fine print and to commit to paying it all off and following through. With that said, you really can get 0% financing, normally for up to 6 or 12 months. I have done it several times. Just make damn sure you get it all paid in time.

WolfpackGuy
03-03-2011, 05:53 PM
It's not a whole lot of debt and only three cards....paying minimums gets me out of debt in 3 years, so I guess I'll stick with that

Yeah, go month by month, and try as best you can to stick with the plan.

Keep an eye out for balance transfer notices for chances to reduce your rates as well.

The rates are where they really get people.

Pick Six
03-03-2011, 05:55 PM
i think that **** kills your credit

So does not being able to pay your bills...

Boomhauer
03-03-2011, 08:32 PM
Hey guys, I'm not in a terrible amount of debt but I was starting to think of rolling a few of them into one bill. More or less to make it easier to stay on top of things and having to just pay one bill.

What's the deal with these things? Scam?

Better idea. Start selling unbacked IOUs grade-rated and with varied interest to investors. Call them debt derivatives. Use the money from their sale to pay off the real debt you owe, than default on the IOUs. The investors you duped will be out of cash with no means to recover and you walk away with all bills paid.
I learned this trick from finacial 'experts' while staying at a Holiday Inn.

Meck77
03-03-2011, 09:31 PM
It's not a whole lot of debt and only three cards....paying minimums gets me out of debt in 3 years, so I guess I'll stick with that

There is no free lunch. Period.

Conventional thought says pay off your highest interest rate card first but that isn't necessarily the fastest way to get out of debt. I'd recommend attacking your smallest balances first and here is why. Your higher interest rate cards have you by the nuts and they know it. They aren't going to want to negotiate with you. However, you can attack your smallest balance the fastest! If you do that and zero one of them out they will want to work with you and give you a better rate to entice transfers back to them. Make sure you get a fixed low rate and not just a temporary rate.

Boom! Just like that you've killed one card! Then you transfer your higher interest rate debt to your new low fixed rate card. At that point you've essentially consolidated your debt without any risk to your credit. I use to give this same advice to my clients when I was doing mortgage loans back in the day. Worked liked a charm! The key is obviously self discipline and not adding to the balances. However life can throw you curve balls so if you do have to add any debt mine as well add it to ONE low fixed rate card instead leaving yourself exposed to several different cards with varying rates!

Good luck. :peace:

footstepsfrom#27
03-04-2011, 01:30 AM
As others have said, stay away from these companies that promise to deal with your creditors for you and roll your debts into one payment. What you can do, and it's much smarter...is pay off your debts faster by stacking them if you have a bunch of them. Say you have 10 major debts; mortage, 2 cars, student loan, 4 credit cards, maybe another loan and a hospital bill. Pay off the smallest one first, let's say it's $40 a month for a credit card. Double up on it till it's paid, then take that $40 and rather than buying something with it, add it to the next smallest bill, maybe a $80 monthly CC bill. Now you're paying off that debt faster also. When it's done, take the $80 and the $40 (making $120) and add that to the 3rd smallest bill. So if it's a hospital bill of $100 a month, now you're paying $220 a month on that one so it's done faster...etc, etc, etc...You can even do this to pay of your mortage 10 or 15 years earlier or more and save yourself a couple hundred grand in the process.

Ray Finkle
03-04-2011, 07:54 AM
There is no free lunch. Period.

Conventional thought says pay off your highest interest rate card first but that isn't necessarily the fastest way to get out of debt. I'd recommend attacking your smallest balances first and here is why. Your higher interest rate cards have you by the nuts and they know it. They aren't going to want to negotiate with you. However, you can attack your smallest balance the fastest! If you do that and zero one of them out they will want to work with you and give you a better rate to entice transfers back to them. Make sure you get a fixed low rate and not just a temporary rate.

Boom! Just like that you've killed one card! Then you transfer your higher interest rate debt to your new low fixed rate card. At that point you've essentially consolidated your debt without any risk to your credit. I use to give this same advice to my clients when I was doing mortgage loans back in the day. Worked liked a charm! The key is obviously self discipline and not adding to the balances. However life can throw you curve balls so if you do have to add any debt mine as well add it to ONE low fixed rate card instead leaving yourself exposed to several different cards with varying rates!

Good luck. :peace:

This is the best advice I have seen. You need to make sure you map out a plan and stick to it. Once a card is paid off and you get a better transfer rate, switch all the cards to it and then cancel the open cards. Keep it down to one card. NEVER JUST PAY THE MINIMUM, even if you are only paying $5 bucks more.

Requiem
03-04-2011, 07:58 AM
Today I'm getting my first big boy check post college and coincidentally, my school loans have come due and I just maxed out my CC, even though I've had it for five years and don't have too much on it.

I can't wait to get out of this debt. Then I'm a free man, beholden to nothing or no-one!

Best of luck to the OP in getting out of debt.

bronco_diesel
03-04-2011, 08:15 AM
There is no free lunch. Period.

Conventional thought says pay off your highest interest rate card first but that isn't necessarily the fastest way to get out of debt. I'd recommend attacking your smallest balances first and here is why. Your higher interest rate cards have you by the nuts and they know it. They aren't going to want to negotiate with you. However, you can attack your smallest balance the fastest! If you do that and zero one of them out they will want to work with you and give you a better rate to entice transfers back to them. Make sure you get a fixed low rate and not just a temporary rate.

Boom! Just like that you've killed one card! Then you transfer your higher interest rate debt to your new low fixed rate card. At that point you've essentially consolidated your debt without any risk to your credit. I use to give this same advice to my clients when I was doing mortgage loans back in the day. Worked liked a charm! The key is obviously self discipline and not adding to the balances. However life can throw you curve balls so if you do have to add any debt mine as well add it to ONE low fixed rate card instead leaving yourself exposed to several different cards with varying rates!

Good luck. :peace:

Great advice!

I would also add that this approach allows you the snowball effect as well. In the past I attacked my lower balance cards while I paid the others. When I finsihed one, I took the amount I was paying and rolled that into the next lower balance I had. It really creates some momentum and you see the benefits.

chawknz
03-04-2011, 08:20 AM
I don't know how many cards/creditors you have, but try to pay off the debt with the highest RATE first with more than the minimum payment, pay minimums on the rest, and just make your way down the line.

I've never been in a situation to try debt consolidation, but I'm also wary of it.

Pretty much this. I just spent the past 8 years crawling my way out of debt and this is how I did it. I wasn't terribly bad off, but I was about 20K in the red.

Now I have one more payment of $160 to go and then I'm 100% debt free. Feels so damn good.

lostknight
03-04-2011, 08:22 AM
If you really want to manage your credit score, get a account on myfico.com. Their monitoring service is pricy, but FICO has the one thing none of the others have - actual ownership of the credit score algorithm. They have a model up on their site that is really good at showing you what happens depending on which actions you take.

I'm a fan of the paying of highest interest cards first, typically because they also tend to be the oldest cards you have as well. Old cards are weighted differently in the FICO algorithm - never close them.

bronco militia
03-04-2011, 08:29 AM
http://www.daveramsey.com/home/

The Seven Baby Steps

Begin your journey to financial peace

http://www.daveramsey.com/new/baby-steps/

vancejohnson82
03-04-2011, 08:44 AM
Pretty much this. I just spent the past 8 years crawling my way out of debt and this is how I did it. I wasn't terribly bad off, but I was about 20K in the red.

Now I have one more payment of $160 to go and then I'm 100% debt free. Feels so damn good.

that pretty much sums up my situation. I was at about that number two years ago, stopped piling any more of it up and began my climb out. I was just wondering if there was any way to speed up the process without getting banged by some scam third party company

rugbythug
03-04-2011, 09:08 AM
I would guess I am in 50 k on different cc. Business debt exclusively. Hard to start a business.

vancejohnson82
03-04-2011, 09:20 AM
I would guess I am in 50 k on different cc. Business debt exclusively. Hard to start a business.

i would consider this an investment basically

Cool Breeze
03-04-2011, 01:11 PM
Better idea. Start selling unbacked IOUs grade-rated and with varied interest to investors. Call them debt derivatives. Use the money from their sale to pay off the real debt you owe, than default on the IOUs. The investors you duped will be out of cash with no means to recover and you walk away with all bills paid.
I learned this trick from finacial 'experts' while staying at a Holiday Inn.

You might get in trouble with this idea...

Tombstone RJ
03-04-2011, 06:13 PM
Better idea. Start selling unbacked IOUs grade-rated and with varied interest to investors. Call them debt derivatives. Use the money from their sale to pay off the real debt you owe, than default on the IOUs. The investors you duped will be out of cash with no means to recover and you walk away with all bills paid.
I learned this trick from finacial 'experts' while staying at a Holiday Inn.

LOL

great idea, this reminds me of dumb and dumber...