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I want to consolidate the credit cards. Refinancing I don't
think is the way I want to go because I don't know that I want
to take our debt and pile it on top of the house when we want
to sell the house in a few years. We already have a home equity
line and there isn't enough room to use it so that isn't a option.

I was thinking of trying to get a unsecured loan. I just want
one loan, one payment, let me take it out for 5 years, pay on
the darn thing and be done with this mess. I'm scared to go this
route though because I have never had one so I don't know much
about it other then I know the interest rates are a little higher on
them. But that's ok because if you take all the interest rates on
our cards, they are most likely going to be higher then what the loan
would have so we would still save money in the long run. We are
never going to get them paid off if I leave them on the cards so
I want to do something. I'm just not sure what the right answer is and
I don't want to go do the wrong thing. Any advice to put me in the
right directions????
 

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You'd have to look at it really closely. Depending on what your current credit situation is, you might not be able to get that great a rate on the consolidation loan to actually save you anything.

I'd always heard not to consolidate your cards. An article I just read trying to find info for you said about 70% of people are in the same situation with the cards within 2 years anyway. You'd have to make an ABSOLUTE commitment to cutting up the cards and never using them again before you considered it. Otherwise you'd end up with more credit card debt PLUS the consolidation loan.

Personally, I'd look at what you have and make a plan. Say you have 5 cards with varying balances. Figure out how much you can afford to pay on them total each month. Either weight it so you knock off a high-interest rate one first, or a low balance one first. Knocking off one or two low-balance ones first will make you feel like you're really making progress - it'll be good for morale. As you pay those off, redirect the monthly payments you were making on those cards to the remaining ones. So, never decrease what you're paying per month, even as the debt/# of cards goes down. Also, if you get a raise or a little extra cash, you can always bump it up.

Good luck!
 

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WE did what you say you want to do about 10 yrs. ago- We did cut up every card. We currently have no credit cards, use only debit cards and have an emergency account for those unexpected expenses. It was a long and sometimes difficult transition, but the last several years have been great. We are now at the point that DH and i will be able to retire at the ripe old age of 56. We will be mortgage free, and credit free. Granted we are not materialistic folks, but hubs has his boat and I will soon have my hot tub, both payed for by cash. We also have a camper, and 3 vehicles all payed for. I'm only telling you this to let you know its all possible, you just have to be determined. We play alot, no new furniture at our house, but we are happy. Just have to figure out what works for you and what you want, when its all said and done. We wanted peace and playtime ;D
 

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Melissa gave, in my opinion, great advice.

I agree, if you are selling your house in a few years, DON'T refinance. The closing costs are too high to justify. But, don't rule out the home equity line yet. IF, and I repeat IF you have the discipline, you could take out a NEW home equity line, pay off the old line, AS WELL AS the debt on your cards, and then cut up/cancel all the cards but one and NEVER USE IT UNLESS YOU PAY IT OFF AT THE END OF THE MONTH. The advantage of the home equity loan is obviously A. The rate will be lower, FOR SURE, BY FAR, than an unsecured loan; B. the interest on the home equity loan/line of credit is tax deductible.

Anyway, like Melissa said, if you are living beyond your means (sounds like you might be, with a mortgage, home equity line, and 5 credit cards carrying balances), then your tendency likely will be to pay off the cards with another loan, only to then rack charges back up on those cards again. You SURE don't want to do that.

I think the solution to your issues might be more than just the credit card consolidation; you might also want to sit down and truly analyze your income versus expenses, and set a budget to where you commit to making the income and expenses balance at the end of each month (or, ideally, actually have a bit of income left over to put into an emergency savings account -- to cover those unexpected "budget busters" -- as dipete alluded to). Then, if you think you have the discipline to stick to that, then you might consider consolidating the cards, and cutting up all but one (but never carrying a balance on it from month to month -- thus never accruing any interest).

Just my opinions; otherwise, Melissa's "pay off the lowest debt/highest rate cards sequentially" idea is a good one. That way, if you are paying $100 a month on Card #1, and $50 on Card #2, when you pay off Card #1, then take the $100 you were paying to Card #1 PLUS the $50 you were paying to Card #2, and then start paying $150 to Card #2, etc. etc.

Steve
 

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I think you've got a lot of good advice but wanted to point out one thing. If you consolidate and want to cancel credit cards, realize that this can actually damage your credit rating. One of the important criteria in making up your credit score is your available credit. Your debt to credit ratio is very important. Having one credit card and running it up is a lot worse, credit score-wise, than spreading it out over several cards. It doesn't make a lot of logical sense to the consumer but it does to the credit bureaus.
 

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Golfgirlrobin said:
I think you've got a lot of good advice but wanted to point out one thing. If you consolidate and want to cancel credit cards, realize that this can actually damage your credit rating. One of the important criteria in making up your credit score is your available credit. Your debt to credit ratio is very important. Having one credit card and running it up is a lot worse, credit score-wise, than spreading it out over several cards. It doesn't make a lot of logical sense to the consumer but it does to the credit bureaus.
I think this is where the "put it in the freezer" thing came from!
 

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Melissa's suggestion is a lot like Dave Ramsey's "debt snowball" theory--pay the highest interest debt first, pay the min on the others, and pay them off one by one--a snowball effect. But you also have to look at how/why you are in this situation so you don't run them up again!
 

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2 years ago we renewed our mortgage and put everything on it. all our credit cards etc. with in 2 years I had my credit card full again and a even bigger line of credit over my head. I couldn't believe it. SO what I have done is I put what I could of my credit card on my line of credit. cut my credit card up leaving only one available for emergency. we put it in a sealed envelope and hubby hide it. If that doesn't work get a close friend or family member to hold on to it. then I worked out a budget. what we could spend and how much to put on the bills. My credit cards became empty because I couldn't put anything else on them and well now I get to work on my line of credit. It will take me 3 years to get it gone but in three years I Will own my van and my mortgage is due. I'm going to feel rich then. As for buying anything else. I have to wait until the jar is has enough money in it before I can buy it. I have a miscellaneous jar, pets, kids, food, dining out (takes me one month to have enough money in this jar to go out for dinner), gas, auto care, clothes, gifts, my weekly money, hubby's weekly money. So far it's working amazing and YES it take alot of will power. I also of course have set amounts going to a saving account and utilities
hope this helps
 
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