Working with the debt management agency is going to ruin your credit. If you keep making your payments on time everymonth, then I would stick to that. the debt managing company will be the middle man, and you would still have to make one payment on time every month. You also would have to deposit funds in an account for a period of some time with the agency, before that would go in effect. so you would have to be able to continue making the payments directly to the credit card companys, and as well to the fund that will be created by the agency. thats like doubling your payments monthly. then by choosing to work with the agency it will mess up your credit too.
As to the new lenders raising the interest rates, that is a problem we all should talk to our congress about. The new interest rates should applie to any new purchases, and the old rates should apply to the old purchases, and the rates you planned on paying for at the time of the charge.
Using the 20,000 from refi on the home, may be wise, if the interest rates are lower than what your being charge. As long as you plan to remain in the home, and not sell the home any time soon. The balance of the 32 000 in debt would be reduced to 12,000.00 and you can figure out the payments by using this formula as a example:
1.) Balance of Loan X Interest Rate. Divided by 365 (days of year)
I.e.…33000 x .075 (7.25%) = 2,475 / 365 = $6.78 in interest per day
$6.78 X 31 days in month = $210.18 in interest per month
2.) Minimum payment of principle to loan is 1% (.01) per year ($100.00 per every $10,000.00
Balance X .01 add the two together
I.e…. 33000.00 X .01 = 330.00 per month in principle
3.) Add the interest and the principle to get the minimum monthly payment due
These figures can be used to determine your principle, interest, and minimum monthly payments due for a loan.
You should do the math for the costs related to the refi, and the costs related to the interest and credit card charges.
You could continue to keep the cards active by perhaps charging only one item on the a month, like a fixed expense, that you already budgeted to pay for and then use the card, and repay every month, you just need to use caution and be diciplined, to not get in that mess again.
As for the feeling that they are trying to force us in bankruptcy, I agree. they are making there millions off of late charges, and people that are like you and me. The minimum payments will keep your credit active, and in good standing, but what the credit card companys look at is your debt to credit ratio. They like to see the debt below 40%. But then again, if they keep cutting peoples credit down, like they did to me, and that is going to make the debt ratio higher. It is not fair. and I think it is being created. Also, since the big bonuses are gone for these people that work for the banks, they have to supplement there income some way, and this is one way. Consider this if you have 10 million people a month that are late and they pay a 39.00 late fee, thats 390 billion dollars just in late fees, or simpler 1000 people paying the 39 thats 39,000.00 a month. where does that money go, being late is not paying down the principle, or interest, its not paying more for there stamps, or employees. Its pure profit.
I would pay off the cards with the refi, destroy all of them except one or two, and then just live by our means, which I have gotten used to doing now, and its not hard its actually humbling, and healthy. I hope this helps. Allways
Tony
