I have about 110k in credit label debt (that’s not the typo). All of my accounts have been current, hold it or not. we have the great income though it all goes to these cards. Is converging the great idea? And what does it do to your credit since my credit is still glorious as well as current?
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Wow! That much debt and still current, very good.
First consider getting your interest rates reduced. Call every card company and ask them to lower your rate.
Once you have the lowest rates you can, do a few balance transfers amongst the cards you already have. Research the rate of a balance transfer, as it is usually higher than the regular rate. See if it is a viable method of internal consolidation. Take the higher rate balances and put them on your lower rate cards.
If you go for a loan to consolidate, then all you are really doing is adding more debt and only extending the time of carrying a heavy load. Don’t risk your home in this economy… or bankruptcy.
You have the money to stay current (for now), so debt reduction is the key. Put as much money into paying off one high interest/high balance card at a time. Keep it open, but then don’t use it anymore.
It sounds like you are walking a very fine line now: "good income but it all goes to these cards"… rework your budget, tighten your belt for a few months and pay down as much as you can before you get into real trouble.
first place to do that is your home. Rate is fixed. Next is to get as much as you can from your bank to do this. All must be fixed rates
Shifting credit card debt to another loan is never a good idea. It is also unlikely that anyone is going to give you a $110K unsecured loan to pay off all that credit card debt.
The first thing that you should do is STOP using all credit cards. Put them in a ziplock bag of water and freeze them.
Next, stop living beyond your means. Makes no difference how good your income is, that much credit card debt means you are spending waaaayyy more than you make. Sit down and make a strict budget. Get rid of all the extras — eating out, new clothes, cell phone, premium cable and internet, etc.
Take every penny you can squeeze from that budget and throw it at the highest interest rate credit card, while making minimum payments on the rest. When the highest rate card is paid off, move to the next till they are all paid off.
Find other ways to bring in more cash to throw at that debt. Have a garage sale, collect alum cans, sell blood, get a second job.
$110,000? And you’re current?
What’s your income?
Too bad that your income all goes to pay that such a big debt…Consolidation loan could be an option for now as long it offers lower rate with longer payment period. But, it’s important to remember that while debt consolidation is a great way to get your debt under control, it’s only the first step. Proper planning and further self control are also necessary for consolidation to have the desired effect on your finances.
If you want consolidation to work for you, then you should probably cut up each of your credit cards as you pay them off. You don’t necessarily want to close those accounts though, since cards with zero balance and credit available tend to help your credit score. This is especially true if you’ve had the card for a long time.
People who think consolidating their debt will solve their money problems need to reconsider that idea. It certainly has the potential to help, but it only works to its full potential if other constructive activities are also implemented. Changes in spending habits and understanding the reasons for getting into debt in the first place are required as well.