Debt consolidation

[Truth]

I have three credit cards... one with a $500 limit, $700 limit, and $1200 limit. Well, in order to do some debt consolidation, I decided to go to my bank and get another card, but this time for a higher amount. So we try to get a $10,000 one and the plan is to transfer the smaller balances to the big one, and cancel the rest of them. They denied me three times, so I decided to try to get a home equity line in order to accomplish my goals... guess what? DENIED again! They said my debt to income is too high. I guess it doesn't matter that I've never had a late payment on anything in my life. I'm kind of at my wits end here. I could pay off all three of them right now if I wanted to, but I didn't want to spend a chunk of change like that right now in case something happens. I forgot to tell you, HSBC sent me a $500 credit card in the mail automatically without me asking for it. Anyone have any suggestions?

[JAinsworth]

AJ,

Pay the minimum on the two larger ones and as much as you can afford on the smallest one. Once it is payed off, pay on the next smallest one but pay the same amount you were paying on the first one PLUS at least the minimum until this one is payed off. Then do the same on the last one.

Jimmy

[spoolinturbo]

your debt is in a fraction what mine is lol

 

debt consolidation shows up as a big red flag to lenders on your credit report. Although it shows you want to fix it, it also shows you cant handle finances on your own...reducing your lending ability.

[Truth]

I just sent a nice complaint to the FDIC. I hope they do something about it. It's more along the lines of, I wanted a 10 grand card and I got sent a 500 dollar card from another company without my permission. That's the big thing. I just called them and cancelled it and now my score will take another hit because of it. FDIC got a piece of my mind.

[chiplee]

I just sent a nice complaint to the FDIC. I hope they do something about it. It's more along the lines of, I wanted a 10 grand card and I got sent a 500 dollar card from another company without my permission. That's the big thing. I just called them and cancelled it and now my score will take another hit because of it. FDIC got a piece of my mind.

 

The $500 card you were sent will have no impact on your credit unless you activated it. You shouldn't have had to cancel it. It was most likely an "offer" that included a pre-approval and came with a new card ready for you to start spending on. If someone actually "opened" a credit card in your name that's called credit card fraud. Your balances are noise, man, even if they're all maxed out. Pay them off and don't charge another thing until you get your income up. Don't mean to be rude, but I really don't think the FDIC will be very concerned with a complaint from someone with a $2400 credit limit who wants to quadruple it overnight. If I asked for my credit limit to be quadrupled it would be over $500k If your limits are that low there's a reason, and you should know what it is. High credit limits are like special instrument ratings in aviation, they're only given to people who have proven they're smart enough to never use them. Whatever you do, don't cancel them after you pay them off or get another card. You need the available credit there to get your debt ratio in check. Pay them off and save some money on interest. Worst case, you have an emergency and have to run one of them up again to get through it. Best case, nothing happens and you stay out of debt.

[kidjc]

AJ... just a lil intel: every time you apply, you authorize a credit report to be pulled. That in itself, each time lowers you credit score by 10 points. Esperian is the worse!!! Credit has changed since all of this "Down-slide." Not long ago, my credit score was 800+ (average between the big 3). So, naturally @ this time also; my principle property had 100% equity.(valued @ 3 times my mortgage) Refinance... draw out cash.. everytime I'd reach close to the card limit... they'd up it. Took advantage of "specials": low interest cash advances until paid off. (just don't let a payment be even "A Day Late"... or chances are; "Default." Interest goes from 1.9%-5.9%... to 30%. I had acquired such a great credit rating @ such low interest rates (regular rates were @ average no more than 5.9%-7.9%. I SPENT... I made always higher than minimum payments. Paid some cards off. They sent more, they raised my limits. All this continued for a number of years. I had multiple cards that had credit limits large enough to go in & charge a new car @ a lower % than a bank loan on (1) card & take it home. AHhhhhh the catch: even though I never had a late payment in many cases for 10 yrs., the credit card banks were way under! So our current administration/congress bailed them out. In turn... just a couple of true to life examples from my scenario: as I said, in turn: the banks/credit card companies raised a annual % on my highest owed cards (most of them owned by "Citibank" from 4.9%, to 19.9%! Just like that! I inquired as to why, always made my payments, more than the minimum, never late. Their response: Well, it's the current crisis situation. Oh, I said... you mean when our government gave you billons of free money to bail you out, that we as consumers/public are paying for, you in turn jamm us! Well you have the option of "opting out." No less than 3 months later, this same card went to 29.9%! Now consider, everyone of the credit card companies followed suit! Combine this w/ the legistration passed to allow those credit card companies to "Raise" the minimum payment %, all @ the same time. Just (1) of my cards went from a $250 per month payment... to over $600 per month minimum payment. They didn't mind when I was spending that money @ 2.9%... paying more than the minimum, always on time... they had me! Boy did they have me! It became impossible to even pay the minimum payments. When I tried to reason w/ them... they could care less! Beware of credit consolidation as well. It stills goes "Big Time" against your credit score, & now w/ all is bad as it is... the average person can now bargain w/ the credit card companies, unlike my scenario a while back. You are still paying a high interest rate to the consolidation people... sometimes, higher than the credit cards... they have just "helped" themselves to having some balances reduced. If you can afford to... even though it may cut into savings... pay them all off! Then keep (1)... maybe (2)? (better 1) credit card always for those emergencies. Pick (1) that balances w/ the highest credit limit & the lowest % rate. Now... there's a trick to this as well?... If you don't use the card @ all... many times the credit card company will not "renew it." OR... they will systematically reduce your limit/lower it. Sometimes, just to insure keeping a "Good Rating"... charge something that you could have paid cash for. Spread out the payments... maybe to @ least 6 of them. Yhea... you'll pay some interest, not too much, but it will keep your charge record active, & show responsibility of payment. When you charge... & pay it off within the (1) billing cycle (no interest) it has less affect of raising your credit rating than by spreading the payments out & paying a bit of interest. The key here: "Make sure... you set aside that cash, that you could have afforded to buy the item with & don't dip into it, or spend it." When the bottom dropped out for me several years back... the property lost "ALL EQUITY"... down 80% now in value from 4 years ago, my "cushion" disapeared. But up until that time... no matter how much I owed % wise... they just kept dangling that higher available limit in front of me... I even knowing better... jumped @ it! Times have definitely changed! Now ONLY our COUNTRY can continue to OWE MORE & MORE W/O LIMITS? Guess they figure?... 55% of the people (working people) will continue to cough it up... ya think?

 

Good Luck dude! Oh, by the way... if you don't pay off all the cards @ once as I suggested (only because you said you "could.") Pay off the highest % rate (1) first... & so on & so on. If you have a home mortgage (think you said you did) this will lower your debt ratio... & as property prices rise???... you should be able to secure a home equity loan. It in itself is tax deductable, unlike credit card interest, (which bay the way... years ago use to be) Hope this is of help & "Interest?"

[Truth]

The $500 card you were sent will have no impact on your credit unless you activated it. You shouldn't have had to cancel it. It was most likely an "offer" that included a pre-approval and came with a new card ready for you to start spending on. If someone actually "opened" a credit card in your name that's called credit card fraud. Your balances are noise, man, even if they're all maxed out. Pay them off and don't charge another thing until you get your income up. Don't mean to be rude, but I really don't think the FDIC will be very concerned with a complaint from someone with a $2400 credit limit who wants to quadruple it overnight. If I asked for my credit limit to be quadrupled it would be over $500k If your limits are that low there's a reason, and you should know what it is. High credit limits are like special instrument ratings in aviation, they're only given to people who have proven they're smart enough to never use them. Whatever you do, don't cancel them after you pay them off or get another card. You need the available credit there to get your debt ratio in check. Pay them off and save some money on interest. Worst case, you have an emergency and have to run one of them up again to get through it. Best case, nothing happens and you stay out of debt.

 

That's why I sent the complaint. I never activated the card but was very much sent a balance with a 19 dollar annual fee attached to it. I never activated it but it was opened in my name.

[chiplee]

That's why I sent the complaint. I never activated the card but was very much sent a balance with a 19 dollar annual fee attached to it. I never activated it but it was opened in my name.

 

You need a 24hr credit watch service until that is resolved. Available from equifax for about $100/yr.

[Shelby]

this day and age you do need at least one card, but use it sparingly,, they all do the same thing low intrest to start with then it's 19 to 28 % , best thing is don't use it or pay it off as quick as you can,, get use'd to liveing with in your means , those cards can snow ball you into back rupsy , i know it takes a lot of will power to not do them impulse buying just cause you have the credit ,, but in the end it's the bigest mistake you can make

 

also debt concolidation is never the answer , start with the highest intrest rate card you have and pay it down,,then do not use it,, start with the next one pay it down

 

a $5000 card wil cost you like $20k to pay it off sending in min payments

 

the fact you were asking to consolidate the little you owe sends a bad message to all the credit agencys

[Edde]

Just an observation. When you go looking for credit cards - at your bank, prepare to be disappointed. Get the best cards that are offered to you. Just have one or two and initially keep small balances. When you start getting better offers maybe switch one or something but don't take on more than 3 total. Now though, you pay everything every month and give them nothing. It is 30 days free money to you, that's what a card is. Then keep an eye out for the card(s) that pay YOU 1% or more. Never spend what you can't pay unless the emergency comes. Be careful about closing accounts. If you have 6 cards, don't close 4 at once - do them one at a time over time to keep from trashing your FICO score.

 

 

As for the card HSBC sent you? Tell them how it's going to be, and be done with it. As for the equity line? Assuming you have equity, you're going to need to clear up outstanding balances on multiple cards. That worries them. What you have done in the past only counts a little. What you could do in the future counts for everything. It may look as though you're preparing to access every kind of credit there is, and use it all to the max.

[chiplee]

Just an observation. When you go looking for credit cards - at your bank, prepare to be disappointed. Get the best cards that are offered to you. Just have one or two and initially keep small balances. When you start getting better offers maybe switch one or something but don't take on more than 3 total. Now though, you pay everything every month and give them nothing. It is 30 days free money to you, that's what a card is. Then keep an eye out for the card(s) that pay YOU 1% or more. Never spend what you can't pay unless the emergency comes. Be careful about closing accounts. If you have 6 cards, don't close 4 at once - do them one at a time over time to keep from trashing your FICO score.

 

 

As for the card HSBC sent you? Tell them how it's going to be, and be done with it. As for the equity line? Assuming you have equity, you're going to need to clear up outstanding balances on multiple cards. That worries them. What you have done in the past only counts a little. What you could do in the future counts for everything. It may look as though you're preparing to access every kind of credit there is, and use it all to the max.

 

Look who it is.

[Edde]

Look who it is.

 

 

Don't look now!

[TopDawg_43]

I've researched it. I've formulated plans. I've executed flawless plan. All with the same result. THE CREDIT GAME IS MADE TO FAIL . There's no way around it. When they look at your debt to income ratio, they include your mortgage. I could rant on and on and on about this, but I don't want to come off and the conspiracy theory dude now.......

[jisleyjr]

I have three credit cards... one with a $500 limit, $700 limit, and $1200 limit. Well, in order to do some debt consolidation, I decided to go to my bank and get another card, but this time for a higher amount. So we try to get a $10,000 one and the plan is to transfer the smaller balances to the big one, and cancel the rest of them. They denied me three times, so I decided to try to get a home equity line in order to accomplish my goals... guess what? DENIED again! They said my debt to income is too high. I guess it doesn't matter that I've never had a late payment on anything in my life. I'm kind of at my wits end here. I could pay off all three of them right now if I wanted to, but I didn't want to spend a chunk of change like that right now in case something happens. I forgot to tell you, HSBC sent me a $500 credit card in the mail automatically without me asking for it. Anyone have any suggestions?

Yes i have one. If you are looking to consolidate look at www.lendingclub.com, peer-to-peer lending/borrowing. Great way to save money as a borrower and make money as an investor.

[Shelby]

no amount of rearranging the amount paid saves you a dime, in fact consoladateing all the cards into one account will cost you 100% more in intrest

[Edde]

For anyone who might find yourself in a bind... never, I repeat never, talk to or even entertain talking to a debt consolidator that contacts YOU. It might seem like a no brainer but some folks don't get it. The ones who have time to research and find your situation are in it for one thing only and that's to take what's left of your hard earned money. The Consumer Credit Counseling Agency is about the only big group that may or may not be able to assist you but they are not looking to profit off your misery. Therefore, they do not contact you out of thin air. I know several people who have spend the cash or come close to doing it - only to realize they we're out more money and nothing is better.

[jisleyjr]

no amount of rearranging the amount paid saves you a dime, in fact consoladateing all the cards into one account will cost you 100% more in intrest

How do you figure?

 

If you transfer your balances from 25% cards to a 10% card you are going to save money on interest(2500 balance @ 25% is 600/year versus 10% for 250/year). Yes i know some cards have a 3% transfer fee(250 + 75 = 325 still = 275 savings), but over the course of the year you'll be ahead. Maybe if you get lucky you'll get a 0% offer for a year on balance transfers.

[pure_insanity]

i recently bought a car and instead of dumping my cash, which i had the full amount, just didnt want to drop the wad, i looked into financing it thru the dealership just to see what they would offer. they ran my credit and it came back that they didnt like the fact i had consolidated my credit cards on my own. i got rid of 3 cards by transfering the balances to one card that was lower interest. i was told they would actually prefer to see i had 8 cards with 500$ balances and 10,000$ limit rather than my having one card with 4000$ on it and a 4100$ limit. this isnt a real problem untill you try to borrow money and i actually feel like it works better in my case seeing as to how it sets me up to pay off the total amount in a few years, rather than getting hit with finance charges and other fees on multiple cards, i just deal with one. also since there is only one card now, less possibility of missing a payment. sure the amount you need to pay them seems larger every month but its something the same as sending smaller payments to several places.

 

if you simply want to consolidate your cards and arent so worried about borrowing money in the future. i would contact the card companies and ask for some increases in credit limit and ask about getting you a lower interest(not likely to happen). you may have to do this a couple times before you get somewhere. ive noticed some cards will offer a low interest(with catches) balance transfer and once you transfer to another card, the card that now has a lower balance will offer you a increase of credit limit wanting you to come back. now this may be enough room to transfer back your balance that is now the equivelent of the original 2 cards. keep in mind there is usually a 3% or more fee for balance transfers but do the math and it could be a acceptable amount considering your not talking big numbers. in other words you are playing them against each other to get your debt all into one card with the best interest and etc. this whole thing takes a while so be patient.

[Shelby]

in the real world any one that can get a card with 10% intrest isn't haveing any money problems,,and another little secret they won't tell you that intrest rate can and usualy does go up when ever they want it to , and they can and most do charge up to 28%

 

these credit card companys already know your financial condition before they send you a card offer , and they also know most people will not turn down a free card most free cards have an anual fee that will be add'd on your first statement , stay away from any such deals

[Ken_B.]

I agree with Chip's suggestion to pay off all of the cards and simply keep them for "emergencies" until you build your savings back up. Then I would try to get a card that gives you some kind of reward back as was also suggested. Amazon Visa gives 3% back on Amazon purchases, 2% on food and gas, and 1% on everything else. Discover is 1%, but they have some online retail partners that offer 5-15% back (Home Depot, Lowes, Sears, etc).

 

We charge absolutely everything we can and pay the balance off every month. We do this for the rewards mostly, but it also gives us the power to dispute false or unjust charges. The end of the year statements also give you a clear indication of exactly where you're money is really going. I'm almost ashamed to admit how much we spent on retail last year...