Credit Card debt consolidation?

insanity · #1 12/13/06, 10:19 PM

We have a little delima here. Hoping some of yall might have a better idea.
My grandmother owes a few K's in credit card debt. And shes wanting to retire due to failing health. Well the failing health might get two of the cards paid off as they where insured against such (fileing paperwork now.Due to leave of work for now.) But i dont no what to do with the others. Im wanting to consolidate them together so i can pay them all off for her,as she will not be able to afford them.
But i cant find a card to put them on that isn't a rip off any more. Is there any left? Thinking Discovery or MNBA bank are the best two.
Her house is paid for and i hear that's the best way to do it, due to cheaper interest rates. But i just cant see turning an unsecured dept into secured on the house. Thinking id rather pay a higher interest rate. If something happens and the payments are late whats the worse thing they can do? Hold there breath till the turn blue.

Anyway she never has never had late payments, but yet most interest rates are higher than 17%. Most are 21+%. Thinking we need to pull her credit report to have a look. Id think she should have an 800 score. But I'm guessing not, due to wrong information or something. Or maybe all card rates are high no matter the credit score? Is it possible to get say 14% or less. And not have the little fine print that says they can raise it when ever they want to?

And no, im no angle. Some of the debt is mine.

But i cant afford mine and hers to when there spread around so.

texican · #2 12/13/06, 10:42 PM

If you do consolidate onto one card, make sure you pay more than just the minimum amount due... odds are you'd only be paying the interest... to ever get out from under the debt, you've got to pay some ON the Debt...

The Paw · #3 12/13/06, 11:10 PM

the best option is not to consolidate on another card, but to go get a bank or credit union loan for debt consolidation. They would charge you half the interest rate for a personal loan, if you qualify (as compated to a card rate).

I would not pledge the house as security for such a loan, particularly if it is only a few thousand. That would be a bad way to lose a home... If the consolidation loan is in her name, you could co-sign (or vice versa) to improve the chances of qualifying.

mightybooboo · #4 12/14/06, 01:49 AM

MBNA is now Bank of America.After just one bill from them

,lets make a long story short,they are now history.Need to activate another card for internet purchases,but it wont be any company affiliated with BofA,bet on it.

BooBoo

Severian · #5 12/14/06, 04:12 AM

I recently paid off my cc's through this company : http://www.consumercredit.com/

They reduced the interest rates & consolidated everything into one payment. Some of the interest rates were dropped to zero. After the first 3 payments, the cc companies all send good reports to your credit files, so it doesn't ruin your credit rating.

Ken Scharabok · #6 12/14/06, 05:07 AM

BooBoo: I also had MBNA, now BofA I have a perfect credit score and their card rate is 20.99% on purchases, balance transfers and check or 25.99% for ATM/Bank. And those are daily rates. However, since I pay off the card every month I really don't care what their rates are.

If the home is paid for then don't dismiss a home equity loan to pay off the cards (and then cut all of them up). With that type of collateral likely just about any bank would give you a very, very good HEL rate.

Say your balance is $5K. Cards are 20% annual, so monthly is 2.4% a month on balance. HEL is 8% annual, so monthly is .7% on balance. On the first interest alone would be some $120 month. On second it would be some $35. Over a 12-month period difference is about $1,440 to $420 - about $1,000.

And whatever share of the card charges are yours you should be paying that share of the monthly payment.

I've seen lots of folks get a HEL or debt consolidation to pay off credit cards, then within very short time they have run up new extensive balances on those cards. Cutting up the cards eliminates that temptation.

MorrisonCorner · #7 12/14/06, 05:51 AM

Part of your credit problem may well be the number of cards you're carrying. AFTER (isn't it always after?) I signed up for a credit card at a department store so I'd get a 20% discount on a purchase I learned that carrying "too many" credit cards, even if you have no balance on them, can negatively impact on your credit score. With the consequence that you're only offered high rate cards.

When I get the bill (and card) I will pay the bill and cancel the card.. and then I'm going to order my credit report and check to see if there are "phantom accounts" on there. Credit cards we don't use, haven't activated, but haven't leaped through the hoops to close down completely either.

Ken Scharabok · #8 12/14/06, 06:13 AM

On the above, if I remember the rationale correctly, it isn't necessarily the unused cards but the available credit line on them. Say you had six cards with $10K of unused credit availability on each. Would show up as $60K in credit availability. If your income was say $25K, a lender may be cautious as you could quickly run up more charges on the cards than your ability to pay. Increased risk leads to higher interest rates.

Just a safety tip. Either memorize or write down somewhere the PIN number of the back of your card and then scratch it off. That way if your card is stolen the thief also doesn't have the PIN to go with it. May not necessarily be a direct theft. Say you give the card to a waiter who then separately records the number, expiration date, name and PIN. They could use it on their own or sell the information to another.

RachAnn in NW Okla · #9 12/14/06, 06:45 AM

you can get a free credit report at

www.annualcreditreport.com

totally free....the only catch is that you can only use it 1x per year....that is what you are entitled to anyway....any more that that and you have to pay...

you cant get your credit score for free but it seemed like it was only $5 or $6

Rachel

Bruce in NE · #10 12/14/06, 07:20 AM

credit cards = financial slavery.

MarleneS · #11 12/14/06, 07:45 AM

You might want to check with your bank or someone else you trust prior to using a debt consolidation company, I was told that lending institutions see debt consolidation as a red flag to poor money management, and having an outsider (consolidation company) as a waving red flag.

If you have the time to do so, whenever you get a credit card offer in the mail, read it word for word. If it matches your current card except for a lower interest rate - call you credit card company and tell them you're thinking about switching over. I helped a family member do this, and managed to transfer the debt all to one card, and slowly got the interest rate down to 8.5% This is actually what credit card consolidation companies do for you, all you have got to loose it the time to study the offers and make a few phone calls, the worse that can happen is you get told no, right?

And each month when you are tempted to just pay the minumum, do a little calculating and figure out exactly how much interest you will be paying over the life of the loan, it's always an great motivator to add more so you can reduce the principal as quickly as possible, at the very least - double the minimum.

Hugs
Marlene

ecbreed · #12 12/14/06, 08:12 AM

have her call the credit card companies and ask them to reduce her rate. You would be suprised but some will reduce the rate if you are in good standing with them just ask.

pancho · #13 12/14/06, 11:43 AM

Yes, just give them a call. Ask for a cheaper rate. They probably will not want to give you a cheaper rate but tell them you wil transfer the balance to another card. If you are in good standing they will not want to loose a customer and will reduce the interest rate. Works every time.
If you are not in good standing with them they would rather you move the balance as they will get their money so they will keep the interest rate high.

MyHomesteadName · #14 12/14/06, 11:44 AM

Quote:

Originally Posted by The Paw

the best option is not to consolidate on another card, but to go get a bank or credit union loan for debt consolidation. They would charge you half the interest rate for a personal loan, if you qualify (as compated to a card rate).

I would not pledge the house as security for such a loan, particularly if it is only a few thousand. That would be a bad way to lose a home... If the consolidation loan is in her name, you could co-sign (or vice versa) to improve the chances of qualifying.

This makes MUCH sense. Been there, done that, bought the t-shirt. I tried the debt consolidation companies and that didn't work so well for me.

B of A sucks.

COSunflower · #15 12/14/06, 02:26 PM

I've had the best luck with local credit unions - the interest rates are always WAY lower than the credit card rates and finance charges. They are very easy to work with and always go the second mile to help you.

Maura · #16 12/14/06, 02:58 PM

If she can get a loan, that would be the way to pay off the cards. She may need collateral, but her house or car may be all she needs. If she can get a loan, she can then call the credit card companies and ask what it would cost her to pay it all off. They may give her a discount, but even if they don't , she will be out from under them and the accumulated interest. She should then close the accounts except for two, and only use those for purchases that can be paid off in one to three months.

Danaus29 · #17 12/14/06, 06:49 PM

Good to know B of A is so highly despised here. They took over my MBNA that has a 4.9% fixed rate. I'll be watching for the mailing saying that they will be raising my rate. Then card will be cancelled.

mightybooboo · #18 12/15/06, 02:02 AM

Quote:

Originally Posted by Danaus29

Good to know B of A is so highly despised here. They took over my MBNA that has a 4.9% fixed rate. I'll be watching for the mailing saying that they will be raising my rate. Then card will be canceled.

They didnt send my electronic banking notice,then when I had a chance to look in snail mail,I had three days to pay.Which Yahoo bill pay couldnt meet.They wanted to ding me 29.00 on a 23 dollar bill.AFTER they had taken my 45.00 credit and mailed me a check for that.The balance Ive always maintained just for that reason,a missed payment couldnt happen.

Fine,cancel my acct and let me speak to a supervisor,she hung up on me.

Called back,different lady,told her my story,she said I could pay by phone but a 15.00 charge,which she would waive considering the situation.She did that,I canceled.

Then read BofA's terms,including that the payment due dates are now variable!Wonder how many people will get trapped by that trick and see interest rates of 30% default rates !!!!?????

Ive never liked BofA,and this is just the most recent reason why.Their Banking # is 16-66.Fitting.

BooBoo

brownthumb · #19 12/15/06, 03:11 AM

Credit cards should be outlawed. Pay cash or don't buy.

Wildwood Flower · #20 12/15/06, 04:03 AM

Quote:

credit cards = financial slavery.

I agree with the above post. I worked for 4 years to get rid of 6 credit cards, one by one. I started with paying off the smallest balances first and transferring the larger interest accounts to zero interest ones (usually it is for a period of 6 months or so at zero interest--no annual fee).

The last one, I couldn't seem to get rid of so I got a small loan at the bank, using our car for collateral (which was paid for). The payment is $285./month @8%.

I cut up all the cards and got a debit card for internet purchases. This comes out of our checking account (just like a check) and has a $500./day purchasing limit.

I started a savings account and put $300./month in it for unusual purchases. If we don't have the money, we don't get it.

I also started another savings account that I don't touch--I call it our "Retirement" account.

We have no credit cards now. It's such a good feeling.

I must say that this last card was really hard to get rid of. They are still sending me tons of mail, trying to get me to open another account. NO WAY!

I would NOT put up the house for collateral.