Financial question

[Jean]

What's a good financial forum out there or a company I can speak with ?

I am looking into seeing what my options are with consolidating some cc debt as I am basically just tired of having 4 credit cards. I can pay off two out of the 4 fairly quickly, but then I always end up with a balance again. The other two cards are fairly high balance cards, one locked (I closed the account so I can't charge anything on it, but just paying it off at 10-11% apr) and the last one is at 0% until next year.

I just know I could do better, so I am looking for suggestions and ready to make calls. I am not sure if I am better off just paying it off on my own or trying one of the debt. consolidation organizations out there (are they any different from each other?) into closing all 4 cards at once (heard that's not good for your credit anyway) and making one big payment instead of 4.

I was stupid when I was younger and still paying as the result...

[mudflaps]

look for a bank offering 0% interest, or a low rate on balance transfers. likely you can find a card that does that for 6-12 months. you may pay a balance transfer fee, but that will be a drop in the bucket compared to the interest you are currently paying.

how much debt is it?

[Jean]

Just under 10k, I've had the cards for a long time....

[RobertK]

Honestly the problem is that you are spending more than you make. That's where debt originates from. It's basically the result of a income deficeit based on your average spending habits (ie. more is going out than what is coming in). The cc loop you are in is also a result of these bad spending habits on top of poor planning skills.

The best advice you will ever hear is this.

CUT THEM UP - SWEAR THEM OFF - PAY THEM OFF. IMO credit cards are only useful to people who have poor self planning skills.

Get a handle on your spending by doing a written budget on paper or using something like Excel spreadsheet. This forces you to give every dollar a name and a place before you even get it. I personally write out a cash flow budget for every month right before it begins based on my average income.

Trust me, if you do this you will be extremely surpirsed by the results.

[rwh11385]

Honestly the problem is that you are spending more than you make. That's where debt originates from. It's basically the result of a income deficeit based on your average spending habits (ie. more is going out than what is coming in). The cc loop you are in is also a result of these bad spending habits on top of poor planning skills.

O RLY? NO WAI!

The best advice you will ever hear is this.

CUT THEM UP - SWEAR THEM OFF - PAY THEM OFF. IMO credit cards are only useful to people who have poor self planning skills.

Get a handle on your spending by doing a written budget on paper or using something like Excel spreadsheet. This forces you to give every dollar a name and a place before you even get it. I personally write out a cash flow budget for every month right before it begins based on my average income.

Trust me, if you do this you will be extremely surpirsed by the results.

haha. being afraid of credit cards is for morons. don't be a dwimble-dick and not have any credit - although I assume your A4 is leased. Sell it, or at least stop buying toys you can't afford for your E30. It'll still be there next year.

You can buy with good habits with credit cards, like purchasing food you would pay for in cash with a card with rewards or some shit, and pace yourself just as well on CC than in cash. For emergencies, CC's are great, instead of trying to immediately liquidate something to pay for things. As well as easy to transact online, etc.

being responsible can happen regardless of a CC or not, just like being a dumbass can be. don't be scurrrrrrred...

[87Blue325iC]

Just under 10k, I've had the cards for a long time....

A lot depends on your credit score. If you can get a 0% card with a limit high enough to cover the entire amount then do that, but DON'T close the other cards. Cut them up so you aren't tempted to use them, but don't close them out (unless you have a annual fee to pay on them).

Why shouldn't you close them? Because you want to raise your credit score as much as possible. Part of the credit score is based on your credit usage. Example: if you have a $10k limit card with $10k balance, your are maxed out and your score goes down. However, if you have a $10k limit card with a $10k balance PLUS a few other cards with credit lines adding up to another $10k but no balances then you have a total of $20k credit line with only $10k balance - or 50% available credit. This is viewed "better" and you credit score will rise.

Of course you need to make sure you never ever ever have an over 30 day unpaid bill, no collection items, etc.

If your credit score is good to great and you have a steady income, you should be able to open a 0% intro rate (try to get a 12 month one) and pay down the card as much as possible. When the year is almost up, open another 0% card and transfer the balance over. Pick your cards wisely and read the fine print. Don't open up too many other cards - every inquiry on your credit can adversly impact your score.

Don't use a debt consolidation company if you can avoid it - they are viewed very poorly by banks and finance companys. I was a credit buyer reviewing credit applications and scores for a major captive auto finance company for the last 8 years - seeing "debt consolidation" on a credit report was a surefire "decline" on an application.

Hope this helps.

[RobertK]

haha. being afraid of credit cards is for morons. don't be a dwimble-dick and not have any credit - although I assume your A4 is leased. Sell it, or at least stop buying toys you can't afford for your E30. It'll still be there next year.

A credit score is good for only one thing... continuously borrowing money. (and no you DO NOT have to have a credit score buy a home... if you are responsible with money a reputable mortgage company can underwrite a loan at prime rate.)

You can buy with good habits with credit cards, like purchasing food you would pay for in cash with a card with rewards or some shit, and pace yourself just as well on CC than in cash. For emergencies, CC's are great, instead of trying to immediately liquidate something to pay for things. As well as easy to transact online, etc.

A lot depends on your credit score. If you can get a 0% card with a limit high enough to cover the entire amount then do that, but DON'T close the other cards. Cut them up so you aren't tempted to use them, but don't close them out (unless you have a annual fee to pay on them).

Why shouldn't you close them? Because you want to raise your credit score as much as possible. Part of the credit score is based on your credit usage. Example: if you have a $10k limit card with $10k balance, your are maxed out and your score goes down. However, if you have a $10k limit card with a $10k balance PLUS a few other cards with credit lines adding up to another $10k but no balances then you have a total of $20k credit line with only $10k balance - or 50% available credit. This is viewed "better" and you credit score will rise.

Gee wiz.. sounds like your typical average middle class financial mantra.. which is fine if you aspire to be middle class all your life.

Money magazine did a study that shows the average American spends 18% more when spending with a credit card when compared to those who used cash or debit cards (or any liquid form of payment). Credit card companies offer rewards programs as an incent for people to overspend with the rational that the rewards make overspending on purchases more reasonable since you will eventually get enough points for a nice Red Lobster gift card. If you really think cc companies make money ONLY off late payments you need to take some classes in finance.

Jean - do yourself a favor an educate yourself as a consumer. If you're young and want to build wealth stay away from debt. If your young and want to be middle class then keep borrowing money.

Always remember that personal finance is 80% personal behavior and 20% math. Even the math only works when nothing goes wrong.

Trust me money in the bank beats any bullshit rewards and cc company is going to give you.And might I recommend reading some books written by this guy - http://www.daveramsey.com/


BTW.. Debt consolidation DOES do the same amount of damage to your credit that a Chapter 13 bankruptcy does.

[Kruzen]

A credit score is good for only one thing... continuously borrowing money. (and no you DO NOT have to have a credit score buy a home... if you are responsible with money a reputable mortgage company can underwrite a loan at prime rate.)





Gee wiz.. sounds like your typical average middle class financial mantra.. which is fine if you aspire to be middle class all your life.

Money magazine did a study that shows the average American spends 18% more when spending with a credit card when compared to those who used cash or debit cards (or any liquid form of payment). Credit card companies offer rewards programs as an incent for people to overspend with the rational that the rewards make overspending on purchases more reasonable since you will eventually get enough points for a nice Red Lobster gift card. If you really think cc companies make money ONLY off late payments you need to take some classes in finance.

Jean - do yourself a favor an educate yourself as a consumer. If you're young and want to build wealth stay away from debt. If your young and want to be middle class then keep borrowing money.

Always remember that personal finance is 80% personal behavior and 20% math. Even the math only works when nothing goes wrong.

Trust me money in the bank beats any bullshit rewards and cc company is going to give you.And might I recommend reading some books written by this guy - http://www.daveramsey.com/


BTW.. Debt consolidation DOES do the same amount of damage to your credit that a Chapter 13 bankruptcy does.

Does trhat study factor in the fact that american's majoratively live paycheck to paycheck and need to float balances on credit cards sometimes in order to feed their family? A credit card is a tool to be used, not something to afraid of.

[rwh11385]

A credit score is good for only one thing... continuously borrowing money. (and no you DO NOT have to have a credit score buy a home... if you are responsible with money a reputable mortgage company can underwrite a loan at prime rate.)

Gee wiz.. sounds like your typical average middle class financial mantra.. which is fine if you aspire to be middle class all your life.

Trust me money in the bank beats any bullshit rewards and cc company is going to give you.And might I recommend reading some books written by this guy - http://www.daveramsey.com/

And you sound like a Southerner scared of that damfangled credit shenanigans.

Credit cars aren't necessarily going to keep you from being successful if you are half-intelligent. Inventing something, investing wisely, or owning a business can move you forward, but working full-time in some cubicle reseting passwords and cutting up your credit cards won't.

You're really headed to the hamptons reading those radical books on how credit is evil and parting cars in your driveway...

[h0lmes]

Jean - do yourself a favor an educate yourself as a consumer. If you're young and want to build wealth stay away from debt. If your young and want to be middle class then keep borrowing money.

It takes money to make money. How can someone expect to build wealth if they don't have anything to begin with? They borrow money.

[mudflaps]

some statistics to ponder:

the marginal propensity to consume (MPC) in America is .99

the marginal propensity to save (MPS) in America is .01

Example: An American making $50,000 statistically will spend $49,500 annually, and of the original $50,000, will only save $500. The lesson that can be learned from this is that Americans need to save.

[Jean]

Thanks for suggestions guys. The biggest chunk of change is my a4, and house. A4 is only on a 2 year lease and it's up in 4 months so it's going back. One of the reasons why I am looking at a sub 5-10k car is to cut the car payment by a large margin and use the extra cash to save and pay more towards paying off debt.

The problem is the more I make the more I spend and that needs to change I know that ;)

I didn't know debt. consolidation ruins your credit, my credit last time I checked was over 730, it probably is lower now due to CC balance(s).

[87Blue325iC]

Gee wiz.. sounds like your typical average middle class financial mantra.. which is fine if you aspire to be middle class all your life.

Money magazine did a study ...

Jean - do yourself a favor an educate yourself as a consumer. If you're young and want to build wealth stay away from debt. If your young and want to be middle class then keep borrowing money.

Always remember that personal finance is 80% personal behavior and 20% math. Even the math only works when nothing goes wrong.

Trust me money in the bank beats any bullshit rewards and cc company is going to give you.And might I recommend reading some books written by this guy - http://www.daveramsey.com/

I'm not trying to help him build wealth...just telling him what he needs to do to save on paying interest and keep his credit score intact. But you read an article in Money magazine, so I'm sure that trumps my 11 years in the financial services industry and 8 specifically in consumer lending...

[87Blue325iC]

Thanks for suggestions guys. The biggest chunk of change is my a4, and house. A4 is only on a 2 year lease and it's up in 4 months so it's going back. One of the reasons why I am looking at a sub 5-10k car is to cut the car payment by a large margin and use the extra cash to save and pay more towards paying off debt.

The problem is the more I make the more I spend and that needs to change I know that ;)

I didn't know debt. consolidation ruins your credit, my credit last time I checked was over 730, it probably is lower now due to CC balance(s).

If you have a mortgage, a car lease, and a 730 beacon you should have no problems getting a 0% for 12 months. Debt consolidation is for people whose beacons are in the 500's. You just need to control your spending. Dumping the high car payment is a good step.

[Rigmaster]

And you sound like a Southerner scared of that damfangled credit shenanigans.

Credit cars aren't necessarily going to keep you from being successful if you are half-intelligent. Inventing something, investing wisely, or owning a business can move you forward, but working full-time in some cubicle reseting passwords and cutting up your credit cards won't.

You're really headed to the hamptons reading those radical books on how credit is evil and parting cars in your driveway...

WTF does being a Southerner have to do with credit cards? Don't be a dick.


Some people cannot resist the temptation to use a credit card even when deep down they KNOW they shouldn't. RK's advice is spot on IMHO for many people- maybe not everyone- but many.


I've NEVER carried any credit card debt, I recently paid off my $200k house in full, don't have a car payment, and I've probably never made more than ~$45k per year- usually less- more like $25-30k. It easy to tell someone to spend less than you bring home, but it's hard for people to do this in real life- but this is absolutely the key to financial independence.

I don't feel like I am suffering in any way by not having all the latest + greatest gizmos and gadgets- I buy stuff I like but make sure it's something I can afford and will really use before buying it. You won't see me camping out in front of Best Buy waiting to buy the Iphone or PS6 or whatever the newest thing is. I'll wait a month or two until the market settles down and pick one up for a fair price if it's something I want.


Jean- you're wise to concentrate on eliminating CC debt ASAP. I would try to consolidate everything on the card with the lowest APR if possible and then pay it off as quickly as possible. If not, then do all you can to pay off the CC's in order of highest to lowest APR. Sell some of your shit on Ebay (or R3V or BFC or whatever) and send that $$ directly to the CC company before you're tempted to spend it, do whatever it takes to get rid of that debt and you'll be better off. On another note- does your company offer a 401k and are you contributing the max amount to it every pay period?? If not, then you need to do so first thing Monday morning. If you don't think you can do it, then wait until you get a raise, and do it then- you will not miss the $$$ and it will grow like you won't believe. If your company has any sort of matching contribution and you're not involved- you are throwing away FREE money!!



Don't get me wrong, I LOVE all you people who buy tons of shit that you can't afford, that's how I end up with many of my toys- cars, electronics, etc. People buy them and either never use them or realize they can't afford them, so they sell them at a loss and I get a deal! ;)









Bret