Financial question.

[PKCSPT]

Looking for ideas on what others may have tried in our situation.

Long story short.
We have two credit cards that were both used for home repairs and to purchase a lot next to our house. One my mom and I share and one is my husbands and I. These were all done when I had a better paying job which disappeared last year.

I want to combine them to one payment one card but USBANK said they can't do that even though both are through them. They didn't even look up either account. If I apply for another card with another bank or company they are going to laugh. with these two balances sitting there. We CAN afford the payments but it is very close, too close. Some months not so much.

Anybody else been in a similar situation and found a way to simplify the payments to one? Does debt consolidation work?

[eamarquardt]

Credit card interest is about as high as it comes (unless yer dealing with loan sharks) and is best avoided. The simplest solution is to borrow money elsewhere and pay off the credit cards entirely. Could you take out a loan on one of your properties or find a private lender that would charge less than your credit card companies charge?

I kinda think that once the credit card companies have you locked in (contractual agreement) that maximizes their profit they're not gonna be too interested in doing something that makes them less money. Call me a cynic.

Hope this helps.

Good luck.

Gus

[Westcliffe01]

All I can offer you is that you have to pay a h%$#ll of a lot more than the minimum they bill you every month. The statements will show how many years you will have to pay and your total payment if you just make the minimum payment. In the past that was not the case.

Take one of the bills and put every spare cent in it every month until it is paid off (pick the one with the higher interest rate). Then take what you were putting in that one and add it to the monthly payment on the second one.

Been there done that. When I got married my girlfriend/wife had several credit cards that had been run to the limit after a divorce / cancer / going to college binge. She was paying 31% interest ! It took more than 2 years, but we got them all paid off and once the first account is paid off, it is a snowballing effect and the amount you can pay on a single account goes up and the amount they can charge in interest goes down.

Depending on the interest rate and your other banking history, you can sometimes get an unsecured loan from your bank / Credit union which may be at half the interest rate. Anything you can do to lower the interest rate WHILE PAYING EVERY CENT YOU HAVE into the account will get it resolved in the fastest possible time.

[RKH]

Debt consolidation can mean different things at different places. Many debt consolidations will involve a service fee (either upfront or every month) to the consolidator. If you go that route, make real sure you know exactly what you're committing to do. In almost all cases, you will wind up paying more in the long run just by lengthening term even if you don't hit higher interest rates.

Credit unions got mentioned. If that's an option for you, you may very well get a better interest rate even using their credit card but its not always an option.

To go one card in your situation, the bank will be losing one guarantor of the payment, i.e., if you moved it to you and husband card, then Mom is no longer available as a possible source; if you moved it to you and Mom card, then hubby is no longer a source of payment and as you mentioned, your previous high paying job isn't there as a source of repayment any more. That may explain some of their reluctance to be helpful.

A new card at a new bank or CU may be doable if you can go in and talk to someone and tell them the intent is to transfer the balances and cancel the first cards. Key is to get inside and talk to someone and talk them through the whole plan instead of just whether they will approve a piece. Way back when, I was stretching for a new car and they didn't want to finance with an outstanding loan but I explained the circumstances and that the outstanding loan had been for repairs to the car being replaced.

Good luck!

[S. Heisley]

Here are a few ideas that may help. They are all somewhat different; so, if one won't work, maybe the next one will. Adopt as many as you can.

If you have paid enough on the land or if the land has appreciated enough to pay for loan refinancing fees, try to get a real estate type of loan on the land because the interest rate would most likely be lower, making your payment on the land lower.

See if one or all of you can get a second, part time job, maybe one day a week or a couple hours a night. Use that money to help pay off your loans and credit cards.

Look at what you have and sell anything that you don't use or can't justify having. Use that money to lower your balance owing. Every penny put toward those balances will help.

Look at all your loans and credit cards and list the balance of each. Concentrate on paying off the smallest balance as quickly as possible, while paying the minimum plus $5 on the others. Once that first one is paid off, put that money towards the next smallest until it is paid off and so forth. Why the $5 above the minimum? Showing that you are paying more than the minimum on all your bills helps raise your overall credit rating.

If you haven't already done it, consider using less energy. Turn off the lights except in the room you are using and add LED night lights to light your pathways between rooms, etc. Keep your thermostat set at 55 at night and 65 or lower in the daytime, during the winter, and put on a sweater or sweatshirt. In the summer, use an oscillating fan and keep your thermostat set at 80 degrees...period. Your body will get used to it and you will save money.

Cut down or eliminate junk food. Buy the tougher cuts of meat and make soups and stews in the winter, salads in the summer. (Chicken thighs cost less than chicken breasts and are actually better for you.) Use your crockpot and forget about using the oven. Stove ovens waste energy and money. If you want to bake, make it small and bake it in a toaster oven, dutch oven, or solar oven. If you aren't already growing your own food, plant a garden. Every penny counts.

If you have a 401K or IRA, many companies will allow you to borrow from it, using it as collateral. Look into that. There may be several different ways to do that. If you can do it, even though you will still have to pay it back and will still have payments, you will be paying yourself and the interest rate on that will probably be less, thereby, possibly making the payments more manageable.

If I think of anything else, I'll post again.

[Westcliffe01]

The loan from a 401k is a good point. My 401k is offering loans at 2-4% interest.

[PKCSPT]

Thanks everyone. Unfortunately we just bought the property a bit more than a year ago so its value hasn't changed. The only thing we have that would be considered extra to sell is my teardrop and that just ain't going to happen. Fortunately our cars are paid off, I will look into talking to another bank. Maybe I will find someone to work with me. I been trying to find a second job but so far they all want me to be flexible in my hours which is hard since my full time job has me locked in to a set schedule which includes weekends and holidays. Which of course is the days a part time job wants me to work.

Just keep plugging away I guess.

[len19070]

In 1957 I had an Uncle who did time for "Loan Sharking"

He charged 5%

Today he'd be considered a SAINT!

Happy Trails

Len

[mikeschn]

If you consolidate it will typically take you longer to pay it off. But credit card rates are usually pretty high, so if you could get a loan somewhere with a lower interest rate, that would help with keeping the total amount paid lower.

But interest rates are not that low on loans either.
Personal loans are 9.99%
Home Equity loans where you don't live in the home are 7.24%

S. Heisley has some very good ideas.

Good luck!

Mike...