Debt Consolidation Options

Edwards Finance > Debt Consolidation

Q. I am wanting to consolidate my credit card debt and was wondering what your suggestions were as to how to go about it. I am looking to consolidate about $25K in balances primarily for the convience of writing one check a month and having a definitive goal to look forward to. I am not in a money crunch but obviously the saved money would help. The interest on one card is relatively high (around 18%) and the other is average (9%). I have been turned down for an increase in my credit line to cover the amount of consolidation of the other card. I currently pay between $500-600 toward my debt each month and am fairly comfortable with that amount. I guess my 'problem' is that my only equity exists in a rental home that I own in my hometown. I purchased the house for myself but then was transferred with my job about 6 months later. That and the fact that I have only fair credit. With the income from my rental property, I earn approximately $45,000 per year. The value of the home is approximately $55,000 and I owe about $20,000 on the note. Since I am not in a financial pinch or in trouble with my creditors, would approching an organization like Ameridebt or Consumer Credit Counselors advisable? I have not done a lot of research into home equity loans, but I understand that given that the property is longer my primary residence and my credit is only fair, that being approved for a loan is unlikely. Look forward to your responses.

A. -Where have you been all these years? Glad to see that the rumors of your death were exaggerated I get fliers in the mail all the time advertising balance transfers, sometimes at very low interest (like 2%). Look into one of those. I think a home equity loan would be a bad idea. You've almost got your house paid off. Wish I were in your position there. Pay down your credit card debt first, and put any extra into the house. -Try calling the credit card company with the high interest rate and trying to negotiate a lower rate. You may have to work your way up the foodchain to the supervisor's supervisor. It can help if you have gotten a 'pre-approved' offer from another company in your junk mail. If not, maybe you can transfer part of the balance from the 18% card to the 9% card. Also, you say you are fairly comfortable with paying $500-$600 each month, raise that amount until it gets a little uncomfortable, take leftovers to work for lunch instead of eating at a restaurant, take a thermus of coffee instead of stopping for that latte, sell a few things you don't use very much. Pay the minimum amount on the lower rate card and put everything you can scrape up into the higher rate card. It won't be forever.

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