A friend of mine has come up with $5,000 to pay down their credit cards. What advice would you give in regards to how to do this process? I advised them to contact each of the credit card companies and try to negotiate a rate reduction on all of 5 cards that they have. Then determine based on highest interest rate to pay off the highest cards first. Also, I was thinking of having them make a request through Planet Feedback to expedite lowering the rates. Any feedback would be appreciated. I have to say that this Board is one resource that I really, really appreciate having access to. There is nothing like communicating with people who are actually making things happen. Whether Good or Bad. One conclusion that I have arrived at is that if you are persistent and Do NOT give up, you can obtain the results you are seeking. But the Truth is that is with anything in life, not just obtaining an "ACCURATE" Credit Report. roger
I would pay highest interest card first. If annual fees are involved, highest first. SOMETIME I HAVE HAD LUCK WITH PAYING OFF THE ACCOUNT AND THEN WHEN I CALL FOR MY REFUND OF THE CREDIT BALANCE...I TELL THEM IF I HAD A LOWER INTEREST RATE I COULD USE THE CARD AGAIN...BECAUSE YOUR RATE IS THE HIGHEST I HAVE, I CAN'T AFFORD TO USE IT...WORK ONE CARD AGAINST THE OTHER...
1. Call the companies to negotiate lower interest rates, waived annual fees, and reversed finance charges. It helps if your friend has one card which has no balance with which she can set up a balance transfer. Having that option can help her play hardball with the other companies and force them to be competitive to keep her business. 2. She should snowball her debt, as George mentioned. There are 2 ways to do this: Set aside a specific amount of money for all CC debt per month that covers minimum payments and includes a lot extra for snowballing. Either - pay the highest apr card the most out of your CC fund while paying the minimum on all the other cards. When that card is payed off, target the next highest apr card (card #2) and add your first payment to the mimimum payment for card #2 (i.e. all money for card #1 + minimum for card #2 goes to card #2). Continue this, going in the direction of higherst apr cards to lower apr cards. Or - if she needs to see progress; use the model above except pay the lowest balance card first with the money from the CC fund while paying the minimums on other cards. After that card is payed off, roll that payment to the card with the next highest balance. The first method saves the most money but the second method often gives the fastest emotional lift to seeing debt payed off quickly. Hope this helps,
I have heard of both of these methods. I personally recommend always paying the highest rate first. Nothing more rewarding than paying less interest every month. www.creditsense.com
Also when applying for new credit, pay attention to the intro rate and the "GO TO" rate...if you can't pay it off @ 2.90%...it may have a "GO TO" rate of 18.99%+...losing all the benefit you got from the 2.90%... I HAVE A MAX OF 9.99% I PAY AT THIS POINT IN TIME...If I get a promo rate that expires...it gets paid in full... Good luck...
That is a great rule. I try to keep all my balances at less than 10% also. Teaser rate offer expires, pay it off. www.creditsense.com
TELL ME ABOUT IT!!!!!!!!!!!!! ALL THEY HAVE TO DO IS SEND YOU A PIECE OF PAPER SAYING YOUR RATE IS GOING UP...EVEN IF THEY DON'T HAVE A GOOD REASON!!!!!!!!!!!!!
Thank you Very Much for your insight!!! I will pass on this valuable info in the next few days. Anything you can add will be appreciated. roger
