Anyone had an experience with...........

[Ballcox]

Debt consolidation services? It seems like a good idea to get high balance credit cards cosolidated into one lower interest payment plan, but the wife is completely skeptical about these services. Just curious if anyone here had positive/negative experiences with such a service, thanks for your input.

[CrazyOne]

The biggest problem is that you tend to go back to using the credit cards again.. and then you have the consolidation loan and the new credit card bills pretty soon.

It's a nice idea, but only if you can change your spending habits to match.

[Mixability]

The biggest problem is that you tend to go back to using the credit cards again..

I don't think the consolidation company lets you use the cards again, the accounts are put on hold, which then makes your plastic useless.

[easjer]

Some are legit and can help, but a lot are scams. Do your research with the BBB and if you can, find a non-profit group to help you. The biggest problem is that, typically, you send them one check, and they satisfy your creditors by enacting a lower payment plan on your behalf. You pay them a fee, and lower interest on a single higher bill and they are supposed to pay the creditors. But they don't. You've done your good faith effort, but they haven't, see? It can really fuck up your credit.

Your best bet outside of a legit firm is to call the companies and negotiate your interest rates with them directly. Just asking can typically lower your rates several points. You can also tell them that you are interested in working out a set payment plan and see what they can offer you.

[Extra Stout]

The use of debt consolidation services will lower one's credit rating, but they are useful if one is willing to change one's spending habits to get out of debt.

[JoeChalupa]

Dave Ramsey.

[easjer]

I have a coworker who racked up about $50,000 of credit card debt on top of massive student loans. He was in over his head and so he called the companies directly and told them he wanted to freeze his cards and work on getting things paid off. He worked out a payment plan for all his debts with each company that allowed him to pay it off in seven years without high interest rates or negative action on his credit reports. Because he did it himself, he still had enough money left over, because he told them how much he could afford to pay each month and showed a good faith effort.

He now has exceptionally good credit and is much wiser about how to use it.

[Mixability]

I have a coworker who racked up about $50,000 of credit card debt on top of massive student loans.

:wow

I knew someone who had just gotten a job at McD's and was basically living paycheck to paycheck. In order to be cool during all the "riceboy" crap that got started, he went to Rent a Tire, got some rims. Then went to some crappy aftermarket shop on Zarzamora and bought a body kit with a credit card he got in the mail. 2 weeks later, got fired, had his car left on blocks and then he sold his car to pay for his bodykit. He was enough of a dumbass to get caught up in the "rice" crap to begin with! :lol

[easjer]

Well, according to my coworker (who was just finishing paying off his debt when we began working together), he was just a stupid college kid and kept putting more stuff on the card because he could, expensive things like Astros season tickets. I don't think he ever sat down and did the math to see how much he owed on various things. The student loans were an inevitablity for a private school and undergrad and an unfinanced master's degree.

By the time he got his master's he figured out how much he owed and how much he was making, he was drowning in interest rates. He took responsibility pretty quickly, and paid everything in full, and stopped his spending. Pretty impressive, if you ask me.

It took a lot for me to turn down a balance increase when I negotiated my interest rate. I kept thinking about how I needed new tires and how I really needed a new pair of closed toe black shoes (no, I really did, my only other pair had worn through). . . but then I thought about how much debt I already had and how stressed out I was over it, even though I knew it would be paid off . . . and said no.

[Ballcox]

^ thanks for all the info, I had a feeling some of these services could potentially create more problems than they solve. I guess I need to do some more investigating on different services. My wife's take is that we can just pay off the debt on our own without help. We're nowhere close to the friend mentioned above, just around $6,000 in credit card debt. The tough part is curtailing spending habits and also taking on a monthly daycare payment that's more than our mortgage if you can believe that. I tell ya, if I won the lottery I would open up daycares in several locations, talk about a guranteed money maker.

[PakiDan]

Ballcox - check your messages - I have some advice.