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Transfer Balance or Consolodated Credit?

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marie88
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Transfer Balance or Consolodated Credit?  Reply with quote  

Ok, I am 20 years old and unfortunately I dont know much about credit cards and what would be best for me. I currently have 3 cards enrolled in consolated credit. Im not in TOO much debt, but my highest card is about $1600 with a 28.99% apr. I realize this is very high and I've noticed that my monthly balance is barely changing. I was thinking about possibly applying for another cc and doing a transfer balance since my apr is so high. Is this a good idea, or bad? If this would be a good move, I know I would need to choose a cc that wont raise their rates on me in 3 months. I'm looking to find one that has very low rates for about a year. Now I don't know even really where to start. I heard that it all depends on what your approved for, but I also heard its bad for your credit to apply. So if I do decide to do this, I want to make sure I'm applying to the right card. Please any advice would be appreciated.

Thanks!
Post Thu Mar 12, 2009 6:43 pm
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coaster
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Marie, I hate to break it to you, but your chances of getting such a kind of a card at this point, with everything that's going on in the economy is pretty close to nil. If you were qualified for such a card, you'd be getting offers in the mail. And you're correct on both accounts with respect to your credit score. What I'd suggest doing is calling your credit card company and tell them you're planning on transferring to another credit card with a lower rate so you can get your balance paid off, but that if they'll lower the rate for you, you'll stay with them.

Meanwhile, I suppose it wouldn't hurt to go online and shop for a new credit card. Stick with the large well-known card issuers; for example a VISA card from Chase Bank.

Another suggestion is if you have a credit union that you can join, you can get a credit card through them. Now that I think about it, that's probably a better idea anyway.

Good luck. Wink

~Tim~
Post Thu Mar 12, 2009 7:22 pm
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littleroc02us
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At 20 years old and your highest balance on a credit card is $1,600 and who knows what your other balances are, it's time to get real. That is a lot of credit card balance to have at your age. What I would suggest at this point is first of all STOP USING YOUR CREDIT CARDS! Put them somewhere you won't use them for awhile. You need to focus on paying them off. Do this for me. Total your after taxes monthly income and then subtract your total monthly payments to credit cards. What is it? Too much! Now here is the plan.

1. Call your credit card companies and try to negotiate lower interest rates. If that doesn't work move on to step two.

2. List your balances from smallest to largest.

3. Pay the minimum payments on all of them except the smallest. Now apply everything you can at the smallest until it is paid off. Once you have conquered this one move onto the next and pay everything you can until that one is gone. Get my drift. If you work really hard at this you should be out of debt in under 18 months.

4. when you reach this step, cut up all your cards except one to use only for food and gas and pay it off every month. The only reason I suggest this is to build the almighty credit score. That is all you need.

5. When you need to buy something, SAVE! Most people have forgot that idea. It's feels better when you have saved to buy something than just putting it on a card and running up interest.

Hope this helps and good luck.
Post Thu Mar 12, 2009 9:25 pm
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marie88
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Thank both of you for your responses! Littleroc02, I dont think its as bad as you think. The other 2 cards I have are 300 and 600. And I havn't used a card in over a year. Like I said, I am enrolled in consolodated credit. The way that works is, CC has already asked for my interest rates to be lowered. Chase went to 5% and Visa went to 22% (which is still bad, i know!) So I guess I will rule out the idea to do a transfer balance and just suck it up and pay. QUESTION: I can call consoldated credit and tell them to take extra money towards either or all of me creditors. I always thought it was smarter to put extra towards the card that was the highest (and with the highest APR). But I have heard the method more than once to get rid of lower balances first. Which would you recommend?

Thanks again Wink
Post Fri Mar 13, 2009 1:18 am
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coaster
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Getting rid of the lowest balance is just a psychological thing to give you a small victory. If Chase will let you transfer to that account, that's what I'd do right now.

~Tim~
Post Fri Mar 13, 2009 3:32 am
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littleroc02us
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I would get rid of your smallest debt first. It is a small victory which will motivate you to conquer the next largest debt. Good Luck!!!!
Post Fri Mar 13, 2009 1:19 pm
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littleroc02us
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I forgot to add one thing. Once you have paid off the smallest debt, you just take that payment and apply it towards the next. It is a snowball effect, which is a winning effect.
Post Fri Mar 13, 2009 1:22 pm
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Art West
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I couldn't have said it better than littleroc02us.

Pay your smallest balance first and get rid of these credit cards. They are are trap to get you into debt and keep you there.
Post Fri Mar 13, 2009 4:24 pm
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coaster
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Well, the thing is, she's got $1600 at 29% interest. If she could get that transferred to the 5% account, think of how much THAT would free up in monthly cash flow. That account is costing almost $39 a month in interest alone, whereas the account with the small balance has probably got a minimum payment in the neighborhood of $15. Getting rid of the balance on the high-interest account would free up more monthly cash flow and reduce the interest being paid. The net interest saved comes out to be about $32 a month.

If she can't transfer it, then yes, I'd agree with the conventional advice.

~Tim~
Post Fri Mar 13, 2009 5:30 pm
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Greer
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It could be a smarter option to pay off the balances with the highest interest rates first as these will accumulate much more debt at a faster rate than the others if they are left without payment.
Post Wed Dec 09, 2009 11:56 pm
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