Debt Consolidation

[BKat]

How far in debt should you be before you consider consolidating it? Also, my husband and I have only been married a few months and I have a few credit cards, but the payments are still manageable, whereas his aren't. Should we consolidate our debt together, or just his?

[BubMunkeyBles]

It's generally not a good idea to consolidate your debt. You are paying for services you could do yourself. I would find a good financial book (I like Dave Ramsey and checked it out from the library) and find other ways. You can call companies and let them know your having problems, many will be willing to work with you or set up a payment plan.

[Trey]

Originally Posted by BubMunkeyBles It's generally not a good idea to consolidate your debt. You are paying for services you could do yourself. I would find a good financial book (I like Dave Ramsey and checked it out from the library) and find other ways. You can call companies and let them know your having problems, many will be willing to work with you or set up a payment plan.

Totally agree.

First thing I would do is cut up the credit cards so you stop compounding the problem. Then cut out frivolous spending and start putting everything you can on debt. Call the companies and ask for lower rates.

[BKat]

We've already cut up the credit cards, but we heard it was better to consolidate your debt because you end up paying a much lower interest fee than you would if you paid the regular interest rate.

[Trey]

Originally Posted by BKat We've already cut up the credit cards, but we heard it was better to consolidate your debt because you end up paying a much lower interest fee than you would if you paid the regular interest rate.

That's not always true. Plus it can look bad on your credit report as well. Basically these people do about the same thing you can do if you take the time and effort and research to do it, except you usually pay those people too.

[carolinagirll]

Originally Posted by BKat We've already cut up the credit cards, but we heard it was better to consolidate your debt because you end up paying a much lower interest fee than you would if you paid the regular interest rate.

Not always true sometimes you end up paying more. I would sit down look at your bills both of you together compare interest rates and pay down the CC with highest rates first.

Just budget budget budget.

NO more credit cards for a while after you pay these off and start a savings account also.

Good Luck!

PS if you have not already done so I would suggest pulling each of your credit reports and see where both of you stand (credit rating wise). We did this b4 we got married.

[carolinagirll]

Originally Posted by Rileysmom That's not always true. Plus it can look bad on your credit report as well. Basically these people do about the same thing you can do if you take the time and effort and research to do it, except you usually pay those people too.

Agree

[Brittany Rashel]

when DH first got here we went to this counseling thing where they talked about getting out of debt. We were told to never EVER consolidate your debt. I don't know who made this video but it was great. He talked about something he called the "snowball effect." You write down all of your debt in order from highest interest to lowest interest. Cut out all frivolous spending. Pay the very minimum payments on all the debt and put all extra money towards the first card (or debt). Once you paid off the first one you just do the same thing with the next one. You just continuously do this until all of your debt is paid off. But that means no spending on anything but your debt.

[JustMrsJoann]

Originally Posted by Brittany Rashel when DH first got here we went to this counseling thing where they talked about getting out of debt. We were told to never EVER consolidate your debt. I don't know who made this video but it was great. He talked about something he called the "snowball effect." You write down all of your debt in order from highest interest to lowest interest. Cut out all frivolous spending. Pay the very minimum payments on all the debt and put all extra money towards the first card (or debt). Once you paid off the first one you just do the same thing with the next one. You just continuously do this until all of your debt is paid off. But that means no spending on anything but your debt.

Yeah, that's the Dave Ramsey. His videos can be found on Youtube. Great videos and he has AWESOME ideas!!

[armywife227]

The only debt I'd ever consider consolidating are my student loans because I have a LOT of them, and it would be 8 large monthly payments. I'd rather just pay ONE medium to large monthly payment.
The interest is lower, yes, but the principle is higher, which makes it harder in the long run. Find a very good consultant and get all the ins and outs.