we have 15K debt from 3 credit cards?
January 2, 2010 by
Filed under american debt consolidation
we have 3 credit cards and 2 of them carry a debt of 6500us$ each reaching max. credit limit of 6500us$ from bank of American and one credit card from capital one having 2000 debt…
we want to know what is the best way to get rid of this debt of around 15000 us$?
best way is accept balance transfer offer from other card issuer or try to get a debt consolidation loan?
Please give best solution from your experience..if you are suggesting debt consolidating loan please suggest where can we get such loan?
OK…approach your banks, and see which one will consolidate. Then have your entire pay directly credited to the card, and use that card for all living expenses. you will be surprised how quickly the balance will shrink and you will save heaps on interest.
The problem with consolidation loans is that most people continue to use credit after they consolidate – and a year later, they’re back in the same mess they consolidated out of.
My approach would be to pay minimum monthly on the two $6500 balances, and pay every extra cent I could on the $2000 balance, until it was paid off. I’d set a goal of say, 4 months, to get that paid off.
I’d stop using credit cards.
Every time I went to buy something, I’d ask “Do I really need this?”
I’d stop eating out, Carry a lunch and drinks. Way cheaper.
I’d reduce the number of times I drove each day.
Maybe find a part time job to make more money to pay off the debts.
As soon as the $2000 was paid off, I’d pick the credit card with the higher interest rate, and start paying extra on it monthly. And set a goal. And do all the steps I listed above to meet the goal.
After that is paid off, you’re down to one card – now pay it off the same way.
And continue not using credit cards.
You’ll end up $$$ ahead – and never look back
The best was to eliminate this debt would be this way… Do you own a home? If you do, ask to take out a home equity line of credit (equity loan) (for the amount of the credit cards). Whatever the case may be this will get you in at the lowest interest rate possible. Paying off 15,000 in credit card debt isn’t going to happen overnight. You also do not want to be paying additional interest on your living expenses.
A consolidation loan would be your second most viable possibility. One loan which will automatically pay off the three cards which you will be paying back to the bank at a much lower rate than what you are paying on the credit cards.
Where a balance transfer to a new card will bite you is the rate they give you for transferring a balance is usually only for 6 months to one year as an introductory rate, Unless you can pay it off entirely in that one years time frame, you are back at square one…a big debt at a high interest rate.
If you can do without using the cards at all, call somewhere like Consumer Credit Counselling. They may be able to talk to these financial institutions and get your interest rate drastically lowered. A place that actually wants to help you won’t charge you an arm and a leg for their service.
Good luck…
Don’t get a loan to pay debt..it doesn’t make sense. Reduce spending overall and pay extra to the principle on each card. Get rid of luxury items, never eat out and reduce grocery bills by only buying on sale items.
I did this and am saving over $200 a month making small adjustments.
Getting a loan to pay off one is the worst path to take and should be the last plan of action…Have you taken any legal advice. Im sure there are agencies in America that offer free advice for debtors.
Sometimes the only answer is to declare yourself Bankrupt but it has its implications….In any case you need to get advice okay….sooner than later.!
DO NOT get a loan against you home as suggested by someone. If you default on that payment your home will be repossessed and you’ll be homeless!
You have some other good suggestions to follow
A balance transfer offer might make sense if it has a low interest rate for the life of the balance and you always make at least the minimum payment every month. If you miss a payment, they charge a late fee, and the interest rate goes back up to the regular purchase rate or higher. There is also a transaction fee which varies from bank to bank.
You have credit card debt, and you wan to pay it off as quickly as you can. We will assume that you are going to stop creating more debt. You have changed your ways. You also understand that paying credit card
Tags