Debt Consolidation

[TIEdup14]

I have about 1500 in credit card debt spread over 2 cards that I need to pay. Basically I just started a new job and with rent and other expenses there's no way I can make my payments anytime soon. I think that debt consolidation would be a great help to me.

Of course, I dont want to go to any old site with my personal information. Any advice/recommendations would be greatly appreciated. If it helps, my primary banking is with Bank of America.

Thanks [img]/images/graemlins/cool.gif[/img]

[Jeff_B]

How long until you can make large payments?

If you are smart/organized you can easily apply for a 0% card (depending upon your credit score) and get approved for a 1500 credit line... Last time I got a card I was approved for like 2500 and my income is very low. (Read I am a student.)

Once you get a 0% card, transfer the two balances to it and be sure to pay the minimum every month and it will drop.

Also from what I have heard the "professional debt consilidation" companies do the same thing but they charge you money.

Check the fatwallet forums they are extremely good at this sort of stuff.

[hedgeyerbets]

filling a card up the the credit limit for a long period of time will hurt your credit rating... do what jeff said, but split it up b/t a few 0% cards or try to get one with a pretty high limit (10k or so)

[TIEdup14]

Jeff has good advice but I dont know if my credit is good enough to get a new card with that large of a limit, I have missed a few payments this year

[Cubswin]

Minimum payment should be $45 a month max. Are you that tight on cash that you can not afford that?

[TIEdup14]

No, but the way I understand it making minimum payments is not the best way to go... am I incorrect in thinking this?

[yellowbastard]

Look into doing a balance transfer onto the Citi Professional Mastercard They offer 0% apr for the first 6 months i think? on balance transfers as well as $100 in bonus points that can be immediately redeemed for gas cards and stuff in their online store

[Cubswin]

Making a min payment may affect your credit score in the short term but as soon as it's paid off your score will be fine.

Even with a lowish income, $1500 should not be that hard to work off. The average American has something like $6500 on a credit card so your not in bad shape. It seems you could have the cash to pay off your cards in the not too distant future (new job hopefully means more cash flow) so I think you might just be better off cutting back expenses and sucking it up and paying the fiance charges until you have the funds to pay it off. The 0%, no-fee balance transfer to a new credit card is an option and it could save you some money but your balance is so small it might not even be worth your time. At 20% interest your finace charge will be about $25 a month. Think about how long it will take you to pay off the $1500 and figure out how much your total finance charges will be. If you cant pay off the card for some time the finance charges will add up. If this is the case the balance transfer might be a good option but i worry that you just might use your new line of credit to live beyond your means.

[gull]

You are right to think that paying minimum payments is not the way to go. It's only if you transfer the balance to a 0% apr card.

[inishowen]

As you get older few things will be as important in your financial life as your credit score. Do everything now to protect it. Don't miss any minimum payments, and don't go to a consolidator.

It seems the debt, although an issue, is not the real problem. The real problem is your income. Find a few ways to make more dough outside of your day job. Flip things on ebay, find free stuff on craigslist and sell it, get a part time job, etc. If you focus on earning more, the debt issue will go away.

As far as the $1500 goes, try transferring the balance to a card that offers a fixed rate for the life of the balance.

I would bank with a local bank, not B of A. B of A is far less likely to be understanding of any mistakes you make and will auto mark your credit score if a problem arises.