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Debt Relief – Insolvency – Bankruptcy Information » Credit Card Consolidation » What is the min. amount credit card debt you must have to do debt consolidation and is this a good idea?

What is the min. amount credit card debt you must have to do debt consolidation and is this a good idea?

I wanted to do credit card debt consolidation but I am skeptical if this is a good idea with the economy. I am very far behind on my credit card bills and the only reason I can’t afford them now is because the min payment has gone through the roof. The all together debt that I have is less than 2,000.

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7 Responses to "What is the min. amount credit card debt you must have to do debt consolidation and is this a good idea?"

  1. evie says:
    Debt consolidation or debt management plan is not the answer for this amount of debt. Probably the best thing is to put your debts on to one card, usually the oldest, then try to get it legally cancelled altogether. If you go to http://www.bdebtfree.info they will help you.
  2. Curious Me says:
    That’s not a lot of money.

    I think the minimum is 5,000 but I’m not sure.

    What you can do is transfer it to another company that has 0% interest for a year and pay it off like crazy..

  3. bdancer222 says:
    What do you mean by debt consolidation?

    Consolidation loan: a big loan to pay off all the debts. Problem with shifting the credit card debt to a new loan is that people often run the credit cards back up and then you have the big loan payment and the credit cards.

    Debt settlement: bad idea. The company takes your money and lets all your debts go 90 days past due, then offers lowball settlement. Not only does this trash your credit, but most credit card companies refuse to play and will just sue you.

    Debt management plan: go to a NFCC member credit counseling service: http://www.nfcc.org/. These are legit, non-profit companies that can assist with budgeting and offer debt management plans for a nominal fee. They negotiate lower interest and payments so you can pay off your debt. There is no minimum requirement.

  4. ElizabethMichele says:
    You can try what I did but since you are behind on payments it may be hard. Get a small personal loan to cover everything you owe, tell the bank this is what you are doing. I cut my interest rate into less than half of what it was by going through my credit union. Thing is, you need to cut up those cards once the loan goes through, otherwise you may be tempted to use them again and just get yourself in double trouble.
  5. Danny says:
    I would caution you against any type of consolidation if you only owe a balance of $2,000.00 .. You could make payments of 112.00 monthly for 18 months and have your card paid off..I suggest you call your card company and offer a payment plan that you can make .. Most will cooperate with you..I don’t understand how a $2,000.00 balance could “go through the roof ” .. Are you sure this is the problem ?
  6. infinite crisis 247 says:
    most places don’t have a minimum, but you’d be a fool to go into debt settlement for a balance of 2000 dollars. that isn’t an insurmountable amount and by entering into a covenant with those scamsters, you’ll find your credit worse. read the girl’s post who breaks down what those companies do when they try to lowball your creditors. she’s absolutely right.

    so, what should you do? you should get a 2nd job, sell stuff on ebay, stop going out, cancel the gym membership…anything that you can to get extra money towards that debt. you should also contact your creditors and try to work out things with them. the key is to be proactive and not try to run away from the problem. trying to get lowball payoffs over 2000 is the easy way out…and in the long run the worst thing that you could do.

  7. Jeanne R says:
    Please do not consolidate. It is not free, they will lower your payments by increasing the length of time until you are debt free, and you will take a hit on your credit score. Or they negotiate your debt down after telling you not to pay for awhile adding another hit to your credit score. The hit to your credit score is very bad.
    There is a better way.

    A. Have a garage sale and sell anything that you no longer need or want.

    B.Get a temporary part time job, if you have one, get another.

    Here is a plan that can help you. If you work the plan, the plan will work for you:
    1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Put everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an “emergency fund” category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don’t even have to worry about it. You must cut your spending and live on less than you make.

    2.First get current on all of you debts and make no more late payments. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.

    3.Pay the minimum due on all of your debts and then put your extra money towards paying off the highest interest one first. After you get that one paid off, you put the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off faster. When that is paid off, you put all three payments towards card #3 and that one will be paid off pretty quickly. As an example:

    To start :
    Debt #1 (highest interest): minimum payment+ extra payment
    Debt #2 (middle interest): minimum payment
    Debt #3(lowest interest): minimum payment

    Debt #1: paid off
    Debt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra payment
    Debt #3: minimum payment

    Debt #1: paid off
    Debt #2: paid off
    Debt #3:Minimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.

    That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late payments. This works no matter how many different debts you may have.

    4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Put that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.

    5a. When you have your emergency fund in place, add a category for “fun” to your budget. Save for a holiday, a vacation, a big screen, or dinners out, whatever goal you want. Remember to enjoy your life.

    5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money? Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.

    5c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.

    You can do it and it isn’t as hard as you think. Just follow the plan

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