Question: What's the best way to refinance credit card debt?

(Posted by: george_the_cat on 2006-03-07 18:44:30)

Posted by: jenjf5678 on 2006-03-07, 18:50:13

Consolidate it to the lowest interest rate you can get and try to make a payment every time you receive a paycheck. Also, put your entire tax refund towards it. Because of interest rates, it's better to pay off debt than to try to save money. If you own a home, you can take out a home equity loan. Just be sure not to add to your debt...I know it can be a devestating cycle.

Posted by: voipguy on 2006-03-07, 18:50:14

With cash. just pay them off one by one. highest rate to lowest. equity in a home. if you pay interest, it might as well be tax deductable. contact your lenders. ask them to lower your rate.

Posted by: slsgls98 on 2006-03-07, 18:53:52

Try not to refinance.....see about getting another card with a 0% intro. rate and transfer the debt to the new card ....then pay more than the minimal payment

Posted by: wellness searcher on 2006-03-07, 18:56:40

Get a consolidation loan at a good rate and cancel all of your credit cards. Then all you have is one payment to make, and it'll be a much better rate than your credit cards. Or you can follow the advice on Cheapskate Monthly, a website that teaches you to live on less and how to get out of debt. It takes some willpower to do it the Cheapskate way, but it would be well worth it.

Posted by: Studly on 2006-03-08, 07:57:19

Before you even consider refinancing your debt, consider this. Over the past few years thousands of people have been lured by companies offering consolidation loans, home equity loans, and low-rate credit card transfers. Each has it's pitfalls. Consolidation loans may be more difficult for you to get if your credit is already hitting the skids. But the interest rate is better then the credit cards. Home equity would be better. You have a better chance of borrowing the money, and the interest is tax deductable. But if you fail to make payments you could lose your home. Credit card transfers have some hidden fees. When you get that 0% card and transfer the balance, there are some pretty stiff charges added for "balance transfers ". Be sure to read the fine print and decide if it's right for you. But whatever you do......QUIT BUYING STUFF ON CREDIT! Thousands of people got consolidation loans, then went right on and charged up their credit cards again. They end up in bankruptcy court. For that reason, consider the other advice the other folks have given you before making another loan.

Posted by: Credit Guru on 2006-03-08, 22:57:48

Bob gave some really good advice. I know that John Commuta's course has helped lots of people. One revision, when you cut up your cards don't close the accounts. When you do that it will be a negative on your credit report that you have closed an account with a balance. Second, as you pay off each card don't close that one either. For example, if you have 5 credit cards with credit lines of $2,000.00 each and they are all maxed out then you obviously owe $10k and have total credit lines of $10K. That means you have credit utilization of 100%(a bad thing) and your credit score will be lower. So you pay off card #1 and don't close the account now you owe $8K but have $10K limit, a credit utilization of 80%(better but still too high) If you close that card you will be back to 100% credit utilization. When you get to where you have approx 50% utilization(assuming no late payments or other negative items) you will probably have a pretty good credit score. Then you may be able to qualify for a low rate balance transfer to a new or an existing card(one of the ones you paid off) that will allow more of your money to go to principal and not fees/ interest. Then when you have paid off all of your cards you can close the accounts with lower credit lines/ higher rates/ less rewards to where you have no more than 3 cards. Good Luck