I had discussed in another post about approaching a friend at church regarding out debt and some solutions. Well, I sucked it up and talked to him Weds. night. He is more than willing to help give us some options and ideas. He said he just sat down with another couple a few weeks ago about the very same thing. He also said that he is in a bible study with several men who work in the financial field, and they had been discussing doing this very thing.
He enlightened me on several things - first he said if we are still getting credit card offers our credit is fine. He also suggested the switch to 0% cards for the intro rate. He told me that you have NO leverage for a lower interest rate if the card is maxed. he also told me that creditors would rather see that you have 10 credit cards that have balances that are less than half the credit line than 2 cards that are maxxed. He said having a lot of cards that are not over half shows better cash management than maxxed cards! Who knew!
Anyway, we are looking at 0% cards to transfer some of this debt, and getting things together to show him. Oh, and the best part is he is not charging anything! How awesome is that???
My advice though unless you can handle not maxing out more credit cards, don't get more. I speak from experience. We were told the same thing BUT didn't have the determination not to go over a specific amount. Within months we were totally maxed out on every credit card we had.
We also tried consolidation as well. Again that didn't work because it looked like we had more money to spend and once again we had every credit card maxed out.
Be very careful. I'm not saying your like we were, but I do know how easy it can be to have more credit cards in the wallet.
Oh CJ I know! That is my major concern with trying to move balances to lower APR credit cards. We moved one a few months ago and now both are maxxed. That will be my last choice. We can't do much in the way of consolidation because we have already refinanced the house AND have an equity loan. SIGH
That's great!!! I wish you all the best with paying down your debt!
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"The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty." Winston Churchill
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Jennifer
It's wonderful that your friend is going to help you for free.
I have a suggestion...when those new cards come in put them in a ziplock bag of water and put them in the freezer! THEN forget about them! That should help you not to charge them up....
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~48 yr. old sahw, livin' it up in our empty nest, smack dab in the middle of everywhere.~
*We're debt freeeeeeeee! (including the house)*
Cheryl, when you get the new cards...CUT THEM UP! Put it in your head that this account is only for the purpose of reducing your interest paid and eliminating the current debt load, NOT a new available credit line. It's nice advice to freeze, but you don't want these cards available to spend with no matter what so just cut them up and just pay that bill.
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creditors would rather see that you have 10 credit cards that have balances that are less than half the credit line than 2 cards that are maxxed. He said having a lot of cards that are not over half shows better cash management than maxxed cards! Who knew!
What they like to see is a low % spent of available credit. The more credit available to you works to your advantage IF it's a controlled % that is actually spent. BUT it does take discipline on your part. That's why I say to cut up any new cards so that you don't even need to use willpower.
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What is essential is invisible to the eye.
You don't have to cancel the old accounts, just cut up the cards so you can't use it. Do continue to monitor them as you should all credit stuff b/c of identity theft. I would close newer accounts (cut cards) over older ones that have a history. I'm not to wild about the idea of having ten accounts . I rarely carry a balance, but I do have three major cc that I am putting on a schedule (a Jan/April/July card etc.) so that if I do have to carry a balance (up-coming construction), then I won't be putting new purchases on an immediate interest accumuliting card. I hate getting into that cycle (interest continues to accumulate while check is in mail). A friend that works in a bank said that they don't like to see a lot of cc turnover. I told him I thought changing card for better rates would be a sign of thrift and smart cc shopping. Oh well. Good luck! You can do it!
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Talked to our friend at church
. I rarely carry a balance, but I do have three major cc that I am putting on a schedule (a Jan/April/July card etc.) so that if I do have to carry a balance (up-coming construction), then I won't be putting new purchases on an immediate interest accumuliting card. I hate getting into that cycle (interest continues to accumulate while check is in mail). A friend that works in a bank said that they don't like to see a lot of cc turnover. I told him I thought changing card for better rates would be a sign of thrift and smart cc shopping. Oh well. Good luck! You can do it!
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