$40,000 in debt with 4 credit cards, I have great credit and pay on time. Recently cc%26#039;s raised interest from 7.9 to 23% because they said too, much debt ratio. If I use consolidation will that affect credit and do they charge and are they just doing what I could do (like search for other credit cards with lower rates?)
Do debt consolidation company%26#039;s work and what do they do specifically?
Debt consolidation is one option, and maybe the only option in some cases. I can tell you, from having been a banker in a past life, that many, if not all lenders, will treat debt consolidation as a major fault, and it will affect your credit availability for some years to come. If you think about it, if you go to a company and they act on your behalf and get your payments reduced, reduce the interest you pay or even eliminate some of the debt that you owe, basically you are not repaying everything you actually owe. In other words, they are losing money.
As someone else mentioned it seems a lot like bankruptcy, and well, it is to an extent and many creditors view it as such.
If you do still have a good credit score you can certainly try to obtain other cards to transfer the debt to. Trying to keep the balances to less than 50% of the available balance will keep them at bay. And if your credit is good enough you may find some nice low percentage transfer deals. Then you would need to do your best to pay them down asap.
Unfortunately, few creditors like to refinance revolving type of unsecured debt. Why? Well, its unsecured, so if you default they don%26#039;t have anything to take back in an attempt to get their money back.
Credit card issuers always have it in the fine print that they reserve the right to raise the rates if they want to, when they want to. They will actually monitor your credit report from time to time to see how many other loans or cards you have, and if they don%26#039;t like what they see they can immediately raise your interest rates, and this is commonly done and there isn%26#039;t much you can do. Basically they are saying to you that they feel you are not as good a credit risk and are penalizing you for that.
Too long already, but, debt consolidation can be an option, but it will hurt your credit for as long as 10 years. Do your best to find an alternative, but at 23%, whew, thats a serious amount of interest paid each month. If you have any family that could bail you out and let you repay them, that too is an alternative, say from a home equity loan, but you better be really trustworthy to get someone to do that for you.
I hope this has helped.
Do debt consolidation company%26#039;s work and what do they do specifically?
You can visit http://www.cashguru.info and find very useful tips and several articles on debt consolidation. Report It
Do debt consolidation company%26#039;s work and what do they do specifically?
Get valuable tips on debt consolidation from http://moneymentor.cashmatter.... . It%26#039;s a very useful website. Report It
Do debt consolidation company%26#039;s work and what do they do specifically?
We went to a debt consolidation company once, and to me it seemed like a front for bankruptcy settlements. Basically , they set up a chapter 13, which is a bankruptcy that gets creditors of of your back while you pay off you debts. It does affect your credit score as a bankruptcy. But it does allow you to get out from under the debt. So you make your choice being buried alive in the debt,or having the stigma of filing bankruptcy and having it on your record for 5 to 10 yrs.
Do debt consolidation company%26#039;s work and what do they do specifically?
If you get another credit card with a lower APR, you can put all fo those other cards on it, up to your maximum credit limit. You can do this for a while, 6 months to a year before the rate increases.
Debt consolidation programs do work. Some ask for donations, you decide how much you will pay them. What they do is to talk to your credit companies and have your APR reduced to a very low number and the minimum payment is usually reduced... and they guarantee that payments are received on time. They decide which card will be paid first and will pay more on that card than the others, but the minimums are always paid. The credit companies in turn get their money by charging monthly fees, so in effect, you%26#039;re paying the interest on most of the cards while the main card gets knocked down. They then move to the next highest card value. It usually takes 5-7 years on these programs to get it back in line. The main boost of these programs is the consistent payments, usually people signing up for these programs haven%26#039;t been making the monthly payments on time.
Do debt consolidation company%26#039;s work and what do they do specifically?
Choosing online debt consolidation is very convenient as it allows you to total all your debts into a single one and then make a payment once a month. The companies offering online debt consolidation allow the interest paid to be treated as tax deductible.
These debt consolidators are spread widely and can be contacted easily. Their websites provide all the information needed to help you make the decision. These sites also have links to other consolidators閳?websites to meet your needs. They may even offer you online quotes. They provide non-disclosure agreements so that your private information remains private.
Do debt consolidation company%26#039;s work and what do they do specifically?
If you are caught in the debt trap, you need the services of credit counseling agencies. These agencies assist people who are burdened by debt. They are staffed by experts who have a thorough knowledge of financial management
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