Is it possible to consolidate my credit cards?

Knottie37373131

I am considering looking into consolidating all of my credit card debt and just getting a bank loan with a lower interest rate. I hate credit cards and am ready to just pay these cards off already. It makes it almost impossible with the interest hitting me each month. I have good credit overall and always pay my bills on time but I can't wait to be debt free.

lyndausvi

Sure it's possible.  Do you belong to a credit union?  They tend to give better rates.   

Be careful of closing all the credit cards though.  That can end up hurting your scores.  It's good to keep a few cards and pay them off each month.   

luckya23

What are your interest rates?  How long will they take to pay off? 

I don't know how low the rates are for personal loans, but they're typically not THAT low.  My credit union is currently 7.25%, although I did think it would be more like 12%.

What about doing a balance transfer to a 0% card?

That only works if you can pay it off in the promotional period though.

Be very careful not to charge anything else on the cards though... my friend had to do the personal loan thing twice, and the credit cards are back up where they were for the third time!

Another friend did that Credit Counseling thing.

 

beethery

FI just consolidated two cards into one loan with his credit union. He didn't close the cards though. Available lines of credit can be beneficial to your score.

Knottie37373131

I plan on keeping them open. I have made the mistake of closing two cards when I was 18 and first starting to get credit. I thought it was easier to close them but now I know to just keep them open. I know my rates are all higher than 19.99%. I have two credit cards that are still in the promotional period with 0%, and one of them is almost paid off. Altogether I have about $5500 debt. I hate credit cards and try my best to never use them.

My fiance just refinanced his auto loan from 24.99 percent to 5% a few months ago. So I started thinking that maybe I should do the same with my credit cards.

lyndausvi

definitely look into a local credit union.  If you or a family member is in the military check out Navy Federal Credit Union or the State Department Federal Credit Union.  The SDFCU you can become a member even if you are not an employee or family member.

huskypuppy14

futuremrsk515 said:

I plan on keeping them open. I have made the mistake of closing two cards when I was 18 and first starting to get credit. I thought it was easier to close them but now I know to just keep them open. I know my rates are all higher than 19.99%. I have two credit cards that are still in the promotional period with 0%, and one of them is almost paid off. Altogether I have about $5500 debt. I hate credit cards and try my best to never use them.

My fiance just refinanced his auto loan from 24.99 percent to 5% a few months ago. So I started thinking that maybe I should do the same with my credit cards.

Damn those are some high interest rates. Why the hell did your FI have a 25% interest rate on a car?  You might as well save up and buy the car outright.

 Why are your credit card interest rates so high? Are they department store credit cards, those are usually the highest.

You need to pay more than the minimum each month, or you will never get out of it. Some people recommend paying off the card with the lowest balance first, and then putting that money towards the next highest card. (Obviously paying at least the min. on all cards.)

The other option is to pay off the balance on the highest interest rate card first, and then once that's paid off, put that money towards the next highest interest rate card until they are all paid off.

lyndausvi

The Money Matter board on The Nest can be helpful.

beethery

futuremrsk515 said:

I plan on keeping them open. I have made the mistake of closing two cards when I was 18 and first starting to get credit. I thought it was easier to close them but now I know to just keep them open. I know my rates are all higher than 19.99%. I have two credit cards that are still in the promotional period with 0%, and one of them is almost paid off. Altogether I have about $5500 debt. I hate credit cards and try my best to never use them.

My fiance just refinanced his auto loan from 24.99 percent to 5% a few months ago. So I started thinking that maybe I should do the same with my credit cards.

The two cards FI had had almost a 28% interest rate on one, and an almost 26% on the other. Consolidating them into one card got the balances transferred over with a 8.5% interest rate on the balance. Much better. OH and they re-did his truck loan and brought the payment down over $100/month.

I'm glad I dragged his ass over there. We went with DCU.

lurkergirl

25%?  Holy cow!  FI financed his truck through his credit union, and his rate is like 1.2%.

CMGragain

The only way consolidating your credit bills will work is if you stop using your credit cards after you pay them off.  You don't need to close the accounts.  Just cut the cards in half.  When you have paid off all your debts, including the new loan, then you can use the cards again, ONLY if you pay them off completely at the end of each billing cycle.  Until then, pay cash.

OliveOilsMom

Dave Ramsey's plan on debt snowballing can work very well and you don't need to get a loan.  Basically you will make minimum payments on all account except for the smallest payback.  The smallest one you attack with monthly payments as high as you can until it's paid back.  So if you can throw $200 at your lowest payment, once that is finished, you take that $200 add on the minimum payment of the next bill and attack that one.  Then go through all your bills until you are debt free.  He also recommends building up a $1k cash emergency fund prior to starting the debt snowball.  Here is an article from his website: clicky.

arrippa

beethery said:

futuremrsk515 said:

I plan on keeping them open. I have made the mistake of closing two cards when I was 18 and first starting to get credit. I thought it was easier to close them but now I know to just keep them open. I know my rates are all higher than 19.99%. I have two credit cards that are still in the promotional period with 0%, and one of them is almost paid off. Altogether I have about $5500 debt. I hate credit cards and try my best to never use them.

My fiance just refinanced his auto loan from 24.99 percent to 5% a few months ago. So I started thinking that maybe I should do the same with my credit cards.

The two cards FI had had almost a 28% interest rate on one, and an almost 26% on the other. Consolidating them into one card got the balances transferred over with a 8.5% interest rate on the balance. Much better. OH and they re-did his truck loan and brought the payment down over $100/month.

I'm glad I dragged his ass over there. We went with DCU.

I have my auto loan with DCU at 1.49%. They have some good rates.

paperpusher

Oh it sure is possible.
The credit union I work for offers a VISA credit card with an 11.99 interest rate, BUT if you are doing a balance transfer from another card onto that one the interest rate on that balance is 1.99 for the life of that balance.  Minimum payment is $25 or 3% of the balance whichever is higher.
I've used it multiple times for holiday shopping.  I'll charge up my Christmas shopping on one card and then do a balance transfer to the other.  Mini loan at 1.99%.

But the key to paying down debt is to stop spending.  So just because the card has available moneys doesn't mean you should recharge it all and be in the same place all over again.

And like you already know, don't close those cards after paying them off - that can hurt your credit.  Just cut them up or shred them that way you won't be tempted to use them again.

ShesSoCold

I recently paid off a similar amount of debt. I stopped all "dumb" spending (I can't remember the last time I got coffee from somewhere or got my nails done), reduced my cell phone and cable plans and just paid as much as I possibly could. I gave double the minimum payment to all three cards and any extra to the card with the highest interest rate. I had thought about getting a loan but I didn't want to hurt my credit any more and - I know this sounds dumb - but I didn't want to to be easy. I didn't trust myself to be smart and I wanted to learn for my dumbassey. Now I actually have a savings account for the first time in my life and I'm ahead on my car payment. It feels so good. Good luck!!!

jnrsgirl

If you plan to pay it off within a year or so, I like the Chase Slate card. They have some offers now where you can transfer balances at a 0% for 18 months with no transfer fee. Thats what I use whenever I need to pay off a bigger balance that I don't want to rack up interest.

ShesSoCold

I think citibank simplicity also has a free balance transfer and 0% for 18 months. I got that card and used it. Hence why I didn't trust myself to get that loan lol.