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So it has been a month now since we started this little adventure. And hopefully by now you have gotten your payment schedule set up so you are (or will be) paying twice a month on the card with the lowest balance and paying the minimum on the rest of the cards. I hope you have also called the credit card companies and asked for interest rate reductions; I got quite a few emails from readers proclaiming success and disbelief that the cc companies actually reduced their rates, even if only by a little bit. When you are in debt, every little bit certainly does help!
I just want to touch briefly on something because we just got started setting up the reduction program and you want everything to be going smoothly before you start messing with it again. If you have good credit and have always paid on time, there are probably a few ways for you to consolidate your credit card debt onto a low or no interest card or account and have one bill every month. (Even though we will be paying at least twice a month still!) Depending on what you are paying for interest now, loans from credit unions are sometimes a very good choice when it comes to consolidating all those debts into one payment. They usually offer fair interest rates but should really only be used by people who cannot get their credit card interest rates down to a “reasonable” level on their current card or by signing up for a low interest card. This other option is a balance transfer to a new or existing card at a very low or 0% introductory interest rate. Sometimes these offers can last up to 12 months, giving you a 24 (or more) payment window to get rid of a huge chunk of debt. But I am not going to discuss how to do this yet because I don’t think you should start doing that right away until you get your new system under control and you understand how it is working. After today’s installment, I will take a few weeks off from this series in order to give you all time to work out the kinks in your program, ask any questions you might have and see what kind of progress you are making. We will revisit soon and discuss balance transfers/loans and emergency funds then. Good luck on getting rid of your debt…it’s a slow process at first, but the longer you stick with it the faster the debt will go down. And remember, you DO want to be debt free so patience is a virtue at the beginning of this process.
If you missed part one of this series, you can read it right here, part two is available right here, part three is available right here, part 4 is available right here and part 5 is available right here.