I'm going to cross-post this on the Money Matters board, but I figured I'd ask here as well. Any input of course is greatly appreciated.
I have five credit cards. I was stupid in the last semester of college and while it took me some time to find a job, used them for gas, groceries, etc. So now of course I owe sh!tloads of money, and the payments and interest are driving me bonkers. So I want to enter into credit counseling/debt consolidation to cut down on costs of payments and interests (plus it would be so nice to have only ONE of these payments to worry about per month as opposed to five).
So I did a search and was looking into things and found the InCharge website, which is a non-profit organization that helps people get out of credit card debt. I've also heard their commercials on the radio (possibly seen some advertisements on TV? But I'm not sure there ...). I completed an inquiry online and they soft-pulled my credit report, etc. Essentially, by using their program, I'd pay off my credit cards in four years as opposed to 14-18 years and save approximately $7,500 in payments/interest. The monthly payment is also very affordable for DH and me.
So what's the problem? I'm afraid I'm going to get screwed over somehow. DH is the same way, he's afraid if he tells me to go ahead with it and we get screwed over it'll be all his fault (ditto for the other way around). So I'm trying to do some more research into it. Anyone ever use InCharge Debt Solutions? Did it work well for you? Any nasty surprises?
Thanks in advance.
Re: InCharge Debt Solutions
Don't know anything about InCharge but check out this website:
https://www.whatsthecost.com/snowball.aspx
He's got a lot of info regarding not using loan consolidation services because it'll just end up costing you more. ?You may want to see if you qualify for a new credit card with lower interest rates and transfer like 2 or 3 of your old cards onto it.?
I would see what Suze Orman says about it.
That is where I would start . . .
Good luck!
I have been (and still sorta am) in your situation. Dh and I both had tons of cc debt when we got married. Luckily, I lurked alot on the money matters board and learned A TON. So my advice is hang out at the MM board more! The best thing I found was the website:
www.whatsthecost.com
Instead of consolidating, we have been paying off our debt ourselves 1 card at a time. The website lets you fill in all of your cards/debts with interest rates, then gives you a plan of how and when to pay what to get them paid off the quickest. Basically, you pay a larger payment to the highest interest rate, while paying only the minimum payments on the rest. It works, and it also teaches you how to get out of the mess you got into to.....instead of having someone else do it (like a debt consolidation company)
So far, DH and I have paid off nealry 20k in credit card debt in about a year and a half. We still have some to go, but we are in control now and it feels great.
Good Luck to you!
I'd be careful. Just because they're non-profit doesn't mean they're reputable. Start by checking out the BBB for any complaints. Also check out this website with more information on "non-profit" credit agencies. They also have a database of reputable companies.
https://www.consumerfed.org/releases2.cfm?filename=040903ccreport.txt
My credit card debt is about $8,000 ... I tried to get a second Capital One card so that the two combined credit limits might put me at only 50% of used credit, so it wouldn't look as bad on my credit report, but I was declined. I don't think I qualify for any other cards, except maybe one with a fee and/or a high interest rate, because I have let my credit get to be so bad.
I also don't WANT any more cards, unless they're going to help me. I felt a little like credit counseling was "cheating" but I know how not to get into this mess now: cut up all my damn cards and have one for emergencies or with an extremely small balance to keep up payments and help to create some "good" credit for me.
I do plan to lurk on the MM board more. I also posted there for their input. I am checking the BBB, and I did NOT think about Suze Orman ... prolly 'cause she kinda' scares me, lol. But any other opinions couldn't hurt!
The BBB gives them an A+. Over the past three years they have had 14 complaints, only two of those complains being within the past year. Of those complaints, 8 were "Resolved", and 5 were "Company made every reasonable effort to resolve", and only 1 complaint lacked "sufficient information" to determine if every reasonable effort was made or not.
I am currently also looking into their status as a Non-Profit Organization (they boast a 501(c)(3) non profit status). Someone on another board mentioned they are also sponsored by the Department of Defense because they teach classes/counsel members of the military?
Looking further into this, but would still love to hear your experiences!!
Have you considered going to a bank for a consolidation loan? Interest rates are good right now and if your credit cards are at 10% or more you would save a lot. I believe the bank will then have you close the credit card accounts - maybe you keep one?.
It's good to start a relationship with an account manager somewhere that will help you navigate mortgages, car loans, etc.
We had some debt after our wedding and honeymoon and rolled it into our mortgage. While it increased our mortgage payment the interest on our mortgage was a lot lower than the credit cards. I am happy to say that since we did that last August we've been able to invest and save a lot more and feel like our finances are very clear - we know what we owe and we know what we have.
Good luck!
It's very hard to get a consolidation loan when you have no collateral. I used to work in a bank and I never saw one close that wasn't a home equity. Sure monthly payments are less, but the bank looks at it as you owing the same amount of money you did before.
The only thing you really need to do is spend a lot of time looking into this company. If it is for real it can be a really good thing. Ask them how they get paid, and how much. A lot of companies never tell you that the whole first payment you submit to them you keep. So you think you're paying your credit cards for that month and you aren't.
Also the IRS is looking into revoking the non-profit filings of a ton of these credit counseling companies. My uncle recently retired from the IRS office in DC. The investigations are showing that they aren't really operating as a non-profit. So don't be fooled by that, and don't just assume that non-profit=good.
This is essentially how I feel. It worries DH and me because it sounded too good to be true! The MM ladies are talking about Suze Orman and how she recommends CCCS. So maybe I should look into CCCS and compare the two offers to see which one might be better?
It's nice to hear you had a friend that was helped by them, that makes it nicer to hear a 'personal' experience.
As for getting a loan ... I tried to do this once before (it was with a different bank, though), and my credit score was too low to get a personal loan. Three of those credit cards are essentially maxed out, the other two are only at about 25%. But still, the late fees and increasing interest rates have killed me while being unemployed over the past three and a half months. Now that I have a job, I've completely revamped our budget and want to work on my credit so that DH and I can start looking into getting a house or something sooner rather than later.
Also, I figure that if these cards are being taken care of, it might be easier for me to get a loan through our Credit Union for my student loans to consolidate them because you can't consolidate federal and private. They want $500 per month in total for them, and I just can't afford that right now. They are currently in forbearance because of financial hardship, but the private one is at least still acrruing interest and just because they're delayed doesn't mean they're going to disappear, lol.
Interesting. One of my sisters got one a while back and she doesn't own a house or have collateral. Hmmm. Maybe my mom cosigned it for her.
Could you get a parent to cosign?
My parents' credit is worse than mine. LOL.
DH and I went to Greenpath when we were getting rid of some credit cards that had gotten out of hand. It was worth it for us because they were already closed cards. If your accounts are still active doing a consolidation might not be advisable because you have to close the credit card accounts to get the lower interest rates and that can very negatively effect your credit score. I would look into Greenpath, they had a really reasonable fee, gave us a book, and were really helpful.
Another approch though would be the Dave Ramsey Total Money Makeover. We have been on that program since November 07 and have paid off over $16,000 and have three months of expences in an emergency fund, with only $6,500 in debt to go. His book is now only $10 on his website and it's definately worth the read. It has a Christian undertone to it which was really great for us, but I know it's not everyones cup of tea, but the baby steps he gives can be used by anyone.
Good luck! I hope everything works out well for you!
Does it look bad if they're closed off but being paid on? I only plan on keeping (or re-opening as the case may be) 1 or 2 of them for emergencies in the long run. I feel like they're having such an awful impact on my credit score as it is, I don't know how it could possibly get worse, lol.
I went through Novadebt for debt management last year. They are not-for profit and very legit. It just doesn't work out on paper how you think it will. After a year, I found out that I owed more than when I enrolled in the program, so I dropped it. I think you said you owed 7500? If you want to get them paid off, I personally would suggest not doing a debt management program, I checked into multiples and novadebt was the one I decided to go with and I got screwed over. If you can't take out a consollidation loan, I would just suggest paying them off one by one..start with the smallest and then move that payment ot the next one so on, and so forth.
Good luck..I know credit cards suck. I used them when I moved for hotel stays until we got our place..and food, etc because I wasn't getting 40 hours a week when I moved either. Once i paid the minimums I had no real money left..so it was a viscious cycle.
We did end up filing chapter 7.