“Dear Steve,
I have a 20,000 in credit card debt, citi bank & chase. My Interest rates aren’t so bad about 5% and monthly payments are $153.00 for chase and citi is $173.00. I am ok with paying the monthly minimum amounts and most times I send a teeny bit more – $10-$20. What bothers me the most is that to pay off these cards it will take me 14 years!! My credit is already down the drain because of my husband being late on our mortgage payment and car payment that I co-signed for. I contacted Money Management International for information on the Debt management options and they came back with a 4 year plan paying $509 a month & saving $5,000 on interest. That is a 10 year difference than if I did it on my own. Ideally I would like to be debt free in 3 years but I cant afford that. Should I go with MMI or could I do it on my own and get it paid off in 4 years. I believe they charge $24 a month for their debt management services, I thought I read that it shouldn’t exceed $14 a month? I am having a hard time deciding what the “better” option for me is.
* My credit is already damaged due to late mortgage/car payment.
* I have never been late on any cc monthly payments … ever!
* Couldn’t I save the $5,000 in interest if I pay an extra $69.00 a month?
Sorry I know I am all over the place!! Any input would be greatly appreciated! Thanks so much!
The Daily Money Brief — Free, at 10 AM
Money you may be owed, scams to dodge, and the fine print decoded — the consumer money news that affects your wallet, every weekday.
Every weekday I read the enforcement actions, filings and fine print the outlets skip, and turn them into the one or two moves that actually improve your position — a rate worth moving for, a fee you can refuse, a deadline to beat before it costs you.
I write Your Money Actually most weekdays — actionable money information you will not find anywhere else, and the small decisions that compound. It is free, I sell nothing, and I take no money from any company I write about.
Shannon”
Dear Shannon,
When you participate in a debt management plan with any credit counseling group like Money Management International the cards included will be closed.
Before launching into a debt management solution you might want to evaluate your overall financial situation. I have a few questions for you that you can answer in the comments section.
- Is the issue that lead to being late on the mortgage or car payments resolved?
- What was the reason that happened?
- Do you know what your credit score is?
- Do you have an emergency fund or any cash in savings in case of an emergency?
