Has anyone here used any of those Credit Card Assistance Agencies?

[Michael Silverbane]

A couple of other pieces of advice...

First... Even though it is somewhat less, 'financially efficient', I would recommend that she pay off the card with the lowest balance first, rather than the one with the highest interest rate. The reason for this is that, once the card with the lowest balance is paid off, the money that was going towards that one will be freed up to pay off another card. This creates a snowball effect, where, as you free up more and more of the money that, previously, was only making minimum payments, you can reduce your debt more quickly...

Second... I'd recommend that she try to put together an "emergency fund"... Even before she starts trying to pay off that credit card debt. She should try to put together a wad of cash (it must be cash, and not money in some sort of savings) so that she can use that to pay for any unexpected expenses, rather than falling back on the credit cards. It does absolutely no good to try to pay off the credit cards if she is just going to jack up her balance again when her car breaks down (or whatever).

And finally... Really, the only way to break out of, and stay out of, debt is to spend less money than you make... So she absolutely must find a way to either spend less money or to make more money. Obviously, if she can do both of those things, then she can get out of debt even more quickly. I know it sucks, but she needs to really cut out as much spending as possible, temporarily take a second (or third) job... Do whatever it takes to bring the spending down and the earning up.

Later
silver

 

[megamania]

Almost every single one of those bits in the mail you get about credit card help are barely legal scams. Don't. Trust. Any. Of them. .

In truth, many of them are run by the credit card companies themselves. This way they are assured not to lose any money.

Be aware that most of the legitimate credit help people won't give you help unless your total credit balance is $10,000 or more. .

True

if you do decide to use one, do as Sedarfairy suggested and do your homework thoroughly before committing. .

Very True

In my very personal experience, you'll have much better luck talking to the credit card companies themselves... She should them she's having trouble making the payments and needs help. Often you can get the credit card company to drastically reduce the interest rate and suspend any late fees and over-limit fees. Once that's done, make sure she cuts up her credit cards (but don't cancel them -- leave them open and paid off to help rebuild her credit score and for necessary credit checks), and then come with a plan to pay them off...

First, get them all under the credit limit of any are over. Then, pay at least the minimum on all of them, but have her sink all her spare money into which ever card has the highest interest rate. Once that one's paid off, do the same with the next highest, until they're all paid off. Then, take all that extra money that's not being used any more to pay off credit cards and stick it in the bank... If you've got a couple grand stashed away in the bank, you don't really need to use a credit card. .

Good advice though depending on the company, things can be nasty here. I found Discover is a real [colorful and very nasty comment] in my backside. When dealing with a group to help me pay them off they CHARGED me as per income the interest they lost. I really hope some hacker does something evil to Discover some day and ruins them.

Another option is to talk to your bank... You may be able to take out a personal loan with a lower interest rate than what she's paying the credit cards. Use the bank loan to pay off the credit cards all at once, and then you've just got the one payment to make to your bank.

Some banks will help. Some will even help with payment plans and help seperate the rats from the good companies also.

Good luck. I've been there and it is a less than pleasant place to be.