Okay, I really need advice. My credit is going down the sh*thole right before my eyes. I’m really too young for this…
I have a few credit cards that are maxed out. I am a junior in college, and am getting by on financial aid (grants and loans). These credit cards are killing me. I thought it’d be easy, and was irresponsible with them, and now here I am, in debt.
My first question is what should I consider? Withdrawing from college (I have already withdrew for one semester; I had gone for 2, withdrew for 1, and returned for 1, now I am expected to return in the Fall) I have a fulltime job now where I work 40 hours a week, making 7.75 an hour. I use my paychecks in their entirity towards paying my mom rent to live at home, and towards my credit card bills. I do not use these cards at all, obviously, because they are maxed. My goal is to just pay them off.
OR…should I consider debt consolidation? I’m really not sure what I’m getting into and am confused on what to do… 
Credit consolidation is great, but you have to be careful to choose one who helps not hurts you further. This is tricky. It took me 3 or 4 different companies until I found a good honest one. Things you need to look for when choosing a good one, is comunications: do you call and talk to a machine or a person? Do they answer all your questions in a timely manner? Do they respond to youre emails? Look at youre monthly credit card statements: are the balacnes going down? Did youre intrest rate drop? Find out what type of fee the consolidation company charges you to take care of youre debt, it shouldn’t be a whole heck of a lot. I have 4 credit cards maxed out equaling around 3400.00, and I chose Credit Consolidation to help me out. They direct debit 153.00 per month to take disperse between cards, my balances are going down, harrassing calls have stopped, and intrest rates on the cards have also gone down drastically! Best of all they only charge me 5.00/month to do this!! Credit Consolidation has sent me a book on how to dig youre way out of debt, and sets up a savings account for you when youre done paying off your cards you get 100.00!! I would recomend them to anyone because they truely are the best, and it only took me 3 or 4 tries to find them!! I’ll send you a link below if you want to check out their website
Usually debt consolidation takes unsecured credit card debt and secures it by collateral that one owns. For example people take second mortgages out on their home to get a loan to pay off credit cards. This is a bad idea because one may loose their property.
I suggest a few items. First, do not drop out of school. Second, contact your credit card companies and negotiate a settlement, I am sure most of your debt is late fees and penalties. I have known people that negotiate all penalties and fees from their debt and are just left with the original principle.
Also remember the interest on your card is computed by an average daily balance. So one way to cut the debt, which I have done, is to pay twice or more often in a month. You do not have to pay your minimum monthly payment at one time. You just have to get it in by the due date. If you make two or more payments a month (not paying more dollars a month, just more often) you reduce the average daily balance and decrease the interest accrual. This is a little known but very effective method. I have done it and it does work.
Remember, credit cards are unsecured loans. And without regulation, the banks have gone nuts with the interest, penalties, and fees. They have become modern day loan sharks. But all they can really do is harm your credit. And that can only stay on your credit history for seven years. So yes, your credit rating may fall. But it is not the end of the world, stay in school, stop using the cards, and pay what you can. But do not just ignore them, contact the banks, and see if you can negotiate down the interest, penalties, and fees.
The average American has more then $7,000 in credit card debt, so it is not as negative a social stigma as it was. But do not convert an unsecured loan into a secured one. That is why the interest rates are so high. So keep at it and get through school.
If you really need some help, I will suggest you a site. Where you can get your Consultation free of Charge! No credit check required to get started with your free debt consultation.
http://www.wahor.net/debt
