| Consolidating credit card debt? Is this a fair deal? |
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Sebastian4281
New Member
Cash: $ 0.90
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Joined: 29 Dec 2005
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| Consolidating credit card debt? Is this a fair deal? |
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My gf is currently working on consolidating her 14 credit cards of $8K roughly into one payments. Her interest rates are between 15-25% roughly, and she pays the minimum on all 14 cards totally a little over $400. Her one card is a tv we purchased and it 0% interest for 3 yrs so shes mainly focused on the other 13 cards totalling 5300.
Citifinancial just offered her a loan for 6000, $195/month for 60 months which brings the interest rate to 30.25%. This by no means is a great loan but a better situation than paying the interest spread across 13 credit cards each month and just affording the minimum payment which barely covers the interest each month.
She goes to negotiate this loan today, what questions should she ask? What should she look for in the fine print? Thanx for your help...
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Thu Dec 29, 2005 6:02 pm |
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Rolo
Yo' Daddy
Cash: $ 309.70
Posts: 1551
Joined: 13 Mar 2005
Location: Colorado/Florida
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Oh
My
GAWD!
First, some advice for you to ponder, then onto her deal.
1. Can you afford her?
2. Is she worth it?
Now, the loan. 30.25%...YGTBSM!? In what loan-shark-friendly state does she live? Tell them you'll think about it...the rate is ungodly. Let them call back with a lower rate. Like, 20% or less.
14 freakin' credit cards!?!?! You do realise that she does have a problem that will not go away until she is re-educated, right?
Ask her this...see...this is a test and it is pass/fail: "How much are you going to pay monthly on that loan?" If she says $195, break up with her right then, save yourself the headaches. If she says $400, okay, then ask, "Which two credit cards are you keeping after you close the rest?" If she says something like "WHAT!?" break up with her immediately.
Otherwise, she will run-up the 14 freakin' credit cards since she just freed up $205/mo.
If she passes the test, then ask her how she feels about pre-nups.
M.O.B.
"Expect me when you see me."
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Thu Dec 29, 2005 9:06 pm |
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Sebastian4281
New Member
Cash: $ 0.90
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Joined: 29 Dec 2005
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I agree with everything you said, to say the least.
Her CC debt has been a HUGE issue since i now look at this debt as one day my own. I would never take the relationship to the next step UNTIL she was completely free of debt. Her family is no better in their spending ways, so thats where she has gotten it from. We have had too many to count money fights, especially over the holidays when she decided to spend $1500 on just her 2 parents and 2 little siblings. She bought her parents a $1000 bed! I mean, i love my parents too but $1000, get the hell outta here?!
She has been learning from her mistakes so the answer to your questions...
She is paying $420/month (The exact same amount that she paid when she paid the minimums of her 13 credit cards). She is planning on keeping her 5 best cards (best rates, longest running account, etc) which i plan on keeping a close eye of...
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Thu Dec 29, 2005 10:57 pm |
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Rolo
Yo' Daddy
Cash: $ 309.70
Posts: 1551
Joined: 13 Mar 2005
Location: Colorado/Florida
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quote:
Originally posted by Sebastian4281
She is planning on keeping her 5 best cards (best rates, longest running account, etc) which i plan on keeping a close eye of...
Good plan...average age of accounts matters to your credit score.
"Expect me when you see me."
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Fri Dec 30, 2005 2:56 am |
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UrCredit5
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Joined: 29 Aug 2005
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| Controling Debt |
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My suggestion is to present a proposal with the loan application. It's smart to take out a loan and make one payment with one interest rate than to pay the bills each month for the 13-14 credit cards. The proposal should mention that she is or may be willing to close accounts on so many credit cards, along with what exactly happened, and what she has learned from this experience. Make it simple and to the point. She should also think about her loan term being no more than three years. $6,000 is not that much money to have to borrow for 60 months. This would indeed make her interest rate high right off the bat. Good Luck!
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Wed Jan 18, 2006 4:45 am |
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No-Brainer
Senior Member
Cash: $ 83.45
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Location: Oregon USA
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| Re: Consolidating credit card debt? Is this a fair deal? |
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quote:
Originally posted by Sebastian4281
Her one card is a tv we purchased and it 0% interest for 3 yrs so shes mainly focused on the other 13 cards totalling 5300.
This is a trap, make sure you get this balance paid off BEFORE the three years is up or she will get WHACKED big time.
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Wed Jan 18, 2006 1:34 pm |
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Rolo
Yo' Daddy
Cash: $ 309.70
Posts: 1551
Joined: 13 Mar 2005
Location: Colorado/Florida
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HEY SEB...how'd this turn out?
"Expect me when you see me."
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Thu Jan 19, 2006 1:08 am |
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AskJack
New Poster
Cash: $ 0.45
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| Paying off multiple debts |
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This perosn sounds like a good candidate for a debt management plan. Might save her some money in interest and late fees. One monthly charge. You see ads for these people on TV, but there is one that stands out, NFCC.
From the NFCC website: "NFCC is the nation's largest and longest serving national nonprofit credit counseling network, with nearly 150 Member agencies and more than 1,300 offices in communities throughout the country. Each year, NFCC Members are contacted by more than 1.5 million households, helping many to drive down their debt and take control of their finances.
"NFCC members, often known as Consumer Credit Counseling Service (CCCS) or other names, can be identified by the NFCC member seal. This seal signifies high standards for agency accreditation, counselor certification and policies that ensure free or low-cost confidential services."
How CCCS helps you manage your debt
CCCS offers useful Debt Management Plans. These can be just as effective as a Chapter 13 bankruptcy -- [see details under Definitions] -- without all the expense and with less impact on your credit. :
CCCS will help you to become debt free. You can get a practical, individualized plan. This will help you reduce your stress about your finances, and still pay off your debt.
An example of a CCCS Service:
"Debt Management Plan (DMP). A DMP is a systematic way to pay down your outstanding debt through monthly deposits to the agency, which will then distribute these funds to your creditors. It takes approximately 36-60 months to repay debts through a DMP....Our DMP serves the dual role of helping you repay your debts while creditors receive the money owed to them."
How to find an office near you:
NFCC is located in Silver Spring, Maryland. NFCC member offices can be reached in communities nation-wide:
* call toll-free at 1-800-388-2227
* on-line at: www.nfcc.org
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Fri Jan 20, 2006 6:47 pm |
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