I have a good credit score and am paying $4k a month in credit card payments (paying over the required amount), with exceedingly high-interest rates. It makes sense to consolidate all cc debt with a lower interest rate. Right now, I feel like I’m throwing away money.
I get mailers every day from different companies offering to buy my debt. I don’t know who to trust. There is so much false information and so much self-promotion surrounding debt consolidation and I don’t know where to begin. Based on your expert opinion, where should I go to consolidate my cc debt?
I’m always surprised by the mailers people send me through my I Buy Junk Mail program. They are full of fantastic claims and do not provide enough information to make an informed decision.
Those mailers you and others get are advertisements. Some claim to be for personal loans and then people are switched to some debt relief program. Other mailers are just for some debt settlement or other debt relief programs but seem to be for a loan or consolidation of some sort.
It is entirely confusing.
I’m assuming you are asking for advice regarding a debt consolidation loan and not a consolidated debt relief program. Do you see how nuanced this gets?
An actual loan is the easiest way to evaluate costs since you can look at the interest rate you are offered and compare that to the average interest rate you think you are currently being charged.
Credit card interest rates are variable and the average rate you are being charged has to be weighted based on the balance you are carrying on each card. It’s complicated. But here is an online calculator you can use to figure out exactly what your average combined interest rate is.
One approach to repaying your debt is to divert all the extra money you have each month towards the debt with the lowest balance. This will knock out individual creditors quickly and leave more money each month to attack the remaining bigger balances.
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