Maxed-Out Credit Cards

Submitted by DOLLY on Sat, 10/03/2009 - 11:12

We have about $20,000 in credit card debt, and for the last 6 months have had to resort to one of them to help w/ weekly expenses. All but one is maxed. I have not been late on payments, however, I don't have enough to put any dents in the debts and now need cash to maintain life, instead of charging.

Our credit is low 600's, and need to know if I should consolidate debt or try for a "bad credit" personal loan. We are a one income family and hubby is secure in his job. I have a son who will be going to college in 2011, I don't want to hurt chances of that when the time comes. Any advice?

Thats really lot of debt

Probably bets option for you si to go for soem debt consolidation plan

Do not borrow to pay of old debt, tis a never ending story, unless you get it for 0% APR

Sun, 10/04/2009 - 01:42 Permalink

I'll outline your primary debt resolution options first, and then give you some info on where to find help with college financial aid. Since debt consolidation comes in many forms, it is important that each consumer reflects on what their needs and concerns and financial situation is before signing up for an debt consolidation program.

The four primary concerns for most consumers are:
1. monthly payment
2. time to debt freedom
3. total cost
4. the credit rating impact of the consolidation program.

Sun, 10/04/2009 - 12:15 Permalink

See what impacts you how in yoru credit report

Your credit score and report is based on the following

35% is based on payment history
30% Amount you owed
15% length of history
10% New credit
10% on types of credit

As you can see 35% is payment history, as you are making payment on time now, it will help you to improve the score quickly and the next 30% is how much you owed. As you keep making payment it will reduce the amoutn you owed helping again to improve your score and report.

15% is length of credit history, which i assume you have pretty good history.

Do nto worry about the other two until you have decent score.

But for sure it will take some time to come to a decent number.

Do not apply for any new credit. If you have credit cards, make monthly payments on time. Use cash for some timeif possible.

But the firts two thigns will be your key to get back on track

Sun, 10/04/2009 - 18:14 Permalink

Hi Dolly,

Opting for debt consolidation is better than drawing personal loan according to me. However, first you have to undergo credit counseling since the counselor will assess the income and expenditure and accordingly prepares a plan for your monthly payments. Through a debt consolidation program, you can have your monthly payments reduced and your late or extra charges waived off. Contact a debt relief company and let them negotiate with your creditor.

In this way I Hope you will be able to get out of the mess.

Mon, 10/05/2009 - 10:19 Permalink