I wondering if anyone knows anything about credit card debt consolidation. Have any of you used a company that you'd recommend? I checked into one online and it seemed helpful, but I wanted to check for the experience of others here first.
Thanks for your helpful and kind advice~
Thank you everyone, for your advice and suggestions. I did check into it, and though ti seems there are some legitimate companies out there, the bottom line was that there are some risks and pitfalls to it and it is better to do it yourself.
I don't have an extreme amount of debt to warrant bankruptcy, and my credit is spotless. I called one of my card companies and got no where, and then called another and got a great interest rate for balance transfers. So now instead of 4 cards, I only have two at a lower interest rate, which will help a lot I think.
Thanks again!
Check out the Dave Ramsey site on this. He recommends doing it yourself as most of these companies charge money for something you can do yourself which just puts you further in debt. And when you consolidate you tend to lose any good apr that you have so again you end up spending more in the end. Really research before you do this....
J., I just read this article. Take a look at it and see if the non-profit service they used might apply to your circumstance. You have to be really careful who you use. Some of these companies take your money and don't pay the credit card people - they just hose you. You can't take a chance in that happening to you, so really do your homework.
http://www.dailyfinance.com/2012/10/17/debt-addicts-get-c...
Good luck!
Dawn
my vote is NO, because while the company may promise a lot, in the long run, you are on the hook for the credit card debt, pay off your "cards" one at a time, sit down and think about where your "extra MONEY" goes. does starbucks end up with your extra cash,go every other day, rather then every day, you cut your coffee spending money in half! If you decide to go with a debt consolidation business, check them out throughly first, if they make lots of "pie in the sky"promises, walk away quickly, it if sounds too go to be true, it probably is
K. h.
We've never had this issue and wont , but my reasoning is why pay someone for what you can do yourself?
Why not take initiative to contact creditors and set up your own plan which would eliminate the middle man costs of the company you work with? Keep in mind... If you employ someone to do your business and negotiate.. You are paying more because you can easily do this yourself.
Consolidation companies have a bottom line.. Their profit. Take that profit and act on your own.
This is a very general questions so I'll have to give a general answer...It combines several of your debts into one large debt, so instead of making several payments, now you're only making one payment which is usually substantially lower then the total of the serveral payments you were making previously. Usually, in the long run it will actually cost you a lot more.
In most situations, you pay the DCC a monthly sum. The DCC will negotiate with your creditors to reduce your interest rates and/or reduce minium monthly payments. They will handle any collection calls you may be receiving. The DCC then takes their fee out of your monthly payment and then makes payments to your creditors.
In rare cases, a DCC (Debt Cosolidation Company), will pay off your creditors and give you a loan.
Also, in general, it's a very bad idea for the majority of the population. Be careful. Do your research.
If you'd like to provide more information, we (us mamas) can provide you more specific information and possibly offer some alternatives.
These are also questions, you should ask yourself. Why are you looking into debt consolidation? Are you having a hard time making your monthly payments? If yes, why are you having a hard time? Has anything recently changed financially like job loss, change in hours, illness? Only credit card debt, or other debt like car loan or students loans? How much debt do you have? What type of interest rates are you paying? What is your credit rating? What other steps have you taken to reduce your debt?
I always thought these were a scam (and I think some are, so be careful) until we were sort of forced into a situation to use one, and they were AWESOME! So nice and helpful and un-scammy. They actually worked with a lot of clients who had the main credit card we had issues with, but the credit card didn't refer us directly, it's like they were hiding them...But anyway Greenpath is their name. Their reps are nice and thorough and will run down your situation with you for free. They do not pressure you.
We had ONE bill up to over $900/month and several other smaller debts. They got our monthly payment down to less than $350 TOTAL (closing all cards of course) and that INCLUDED their $10 monthly fee. DO it! Pay down to zero any cards you may want to use in the future, or get a little $200 secured one to have on stand-by if you can't pay the others down. I kept my Target one for example for emergencies. Good luck! Call them!
What they do is get your payment WAY LOWER because they have bargaining power with all the companies that you don't. You have to give up the cards though, so that's a consideration. You can't just have a lower payment and keep running up your debt. It's really to enable you to PAY OFF your debt.
Also, we had no spending issues...we had an IRS issue that was a once in a lifetime fluke, error, nightmare due to my husband's band's accountants, so we had no trouble staying on track, living without credit cards etc. We were already good budgeters and responsible spenders. This will not be a permanent solution if you are having a chronic budgeting problem in the home...but look into it if it fits.
***All these people saying you can do it yourself?! Not in our case. That credit card had raked us over the coals, and I had gotten as much taken off as I possibly could. Greenpath went in and lobbed off EVEN more plus all interest and I no longer had to get their calls. The credit card had also neglected to shut down a protection program I had told them to shut down for four consecutive months, and Greenpath remedied that. I had gone through every avenue and written and spoke to everyone, I could not do any better. Greenpath's fee was nominal (but the first month you make a double payment, one to your creditors, and one to Greenpath, but still even that was cheaper than what we were paying every month before that. Their fee was truly nominal after that for cutting our debt way down and our monthly payment literally in half.
I am about too most likely be doing this. I listened to Clark howard.
I would recommend checking out his web-site and going from there,. thats what were doing.
You can contact your local credit bureau and ask them about debt classes. They often have someone on staff to do credit counseling and help someone to do this through them. At least we know a couple of people who did that several years ago. They paid off all their credit cards and then a couple of their vehicles.
Unfortunately debt consolidation is the worst thing you can do for your credit. They make it sound "all that", but it isn't. I did it for two years and barely got anywhere with it. You are better off filing bankruptcy and getting a fresh start. I have been told that debt consolidation is bad from attorneys, loan companies etc. Really check into it before you decide to do it.
I second the Dave Ramsey recommendation. The man really knows his stuff.
