Credit card debt help?

Me and my fiancee have moved in together.My problem is his credit card debt.He has close to,or a little over $10,000 in JUST credit card debt.

I have good credit.The only thing I have bought on real credit is some furniture for our new apartment totalling $1600.

My question is what is better...to pay off ONE credit card at a time?Or...to get a personal loan with 8% APR and pay off all credit cards in FULL and just pay on the personal loan.Majority of his cards have HIGH APR.My problem is we would HAVE to get the loan in MY name because his credit score is not so good and no one will give him a loan.But this summer I am starting a new job and will be earning $400-500 more a month.But I also need a new car this summer.

Would it be smart to pay the credit cards off individually?Wouldn't the finance,and APR make me pay even more than if I got a loan?The loan would be 8% and we'd pay it off in 4 years.
We will be cutting up his cards,he has learned his lesson trust me!!!

We can pay the monthly payments plus some.My problem is not we can't pay,it's that I want to save money when paying them off,and pay them off FAST as possible.Because in the next year or two we are going to be buying a house

You are actually asking the most important question of our time; consumer debt in the US now stands at a whopping $2.5 trillion.

Here's the optimal solution. (1) Create a monthly budget, so you know what is going out, where. Every dollar counts. (2) You will want to create a 'snowball': a plan to pay off each card, one at a time, to roll one card's payments into the next, into the next. Rank the cards from high to low APR, and focus on the highest APR cards first. If you can, try to consolidate the debt into a low-interest (0% for 15 month, for example), and then make your snowball. 8% is too high, it locks you in for 5 years, and you can do MUCH better because you'll be able to apply the pay-ahead amounts from one card to another. Not so with a fixed 8% personal loan.

If his credit rating is low, he (and you) should
(1) never miss a payment;
(2) request limit increases on each card (to decrease the debt:limit ratio);
(3) don't put each other on each other's cards; this increases both of your debt:limit ratios. When you're married, his debt will be yours (and vice versa) but there is not reason to put each other on each other's cards;
(4) as you pay off each card, do not cancel the card, because you lose the limit on the card.

Now, my answer comes from experience. I became aware of $27,000 in credit card debt that I was not aware of in January 2007. We're now down to just over $10,000, with half of it on a 15 mo. 0% card, and the rest on a 1.9% card for the duration of the transfer.

The value of doing a budget, and greening your lifestyle to reduce overall costs, cannot be understated. By greening our lifestyle, and changing our consumption habits, we save on average $326.00 per month.

This is a great time in your life to master these aspect of personal finance; every 10, 14, 22 dollars here and there saved, month after month, really adds up. It's ok to obsess on how to save money; it's your money. Oh, and extra income on the side can really reduce the time it takes to pay off debt.

The bottom line? Make a plan to pay as little interest as possible, and stick with it. One the debt no longer seems daunting, you can place it on a longer pay-off time. Chance are your financial situation will change (hopefully for the better).

You can read more about these ideas and my own personal experiences at Living Green, Living Well

http://livinggreenlivingwell.com

where I describe are adjustments to our lifestyle each month.

Watch for articles on changing consumption patterns and how to manage credit card debt at Living Green, Living Well...

You can also access (for a small fee) an excel spreadsheet to try to make your own budget at
http://debtfreeonyourterms.com

Best of luck,

James Livingwell

You need to visit: http://www.bluechipdebtrelief....
The site is very informative and should answer your questions Report It

Personal loans are always better if you cut up the cards, what's the point of taking out the loan if you're still going to rack up the debt. Also, the interest on a loan is compounded differently than the raping of a credit card.

The best thing for your fiance to do is to consolidate the credit card debt rather than aquiring a loan. Typically a non profit angency like Consumer Credit Councling would be the best bet.

Well I wouldn't do credit counseling...cut out the middleman and do it yourself. You could take the highest APR card and make big payments to get it payed off fast while paying the minimum on the other cards. When that is payed off go on to the next highest and pay that one off while paying the minimum on the other cards and so forth. You could take out a loan but I'm not sure taking out a debt to pay another debt is a good idea.

The general answer is to take out a <10% personal loan to pay off a >16% credit card debt. Of course, your situation is complicated if you are required to take out the loan to pay back your partner's debt. If you are married then legally it is the 'family unit's' loan, but if you're not you could potentially be stuck with his debt, albeit at a lower rate, while he's off to Cancun to run up another $10,000 on another credit line.

Good luck and don't buy anything more until you're sure you can handle the current debt.

When I was 25, I racked up $10,000 in credit card debt. The interest rates were way to high, and I took a personal loan at a bank at around 7.5% (1996). I had that paid off in 3 years and my credit rating stayed in good shape.

Just make sure to CUT UP THE CREDIT CARDS! It doesn't mean squat if you end up racking up the debt again.

Make CERTAIN that your fiancee understands this lesson. YOUR credit will be involved now too.

Getting that loan would definitely save you a bunch of money. And, if you could pay more than the monthly payment on the loan, that's even better.

But the big question is, do you trust him enough not to run up more credit card debt? Keep in mind, even if you cut up the cards, all he has to do is pick up the phone and order new ones. Even if you made him cancel all the cards, there is nothing stopping him from applying for more.

These kind of scenarios only spell trouble for the relationship. I would figure out a way to handle the credit card debt, while the cards are on his name itself. You would pay towards the accelerated pay off. Save your credit for when you will need it most - to buy a house!

I recommend that you enroll in a debt management program. This is a program established by your creditors called the Creditor Repayment Program. What most people do not know, is that your creditors are waiting to help! They have already agreed to participate....but they will never offer these repayment terms to you directly. When you consolidate, you combine all of your monthly payments of your unsecured debt into one low fixed monthly payment by reducing or even eliminating your current interest rates. Several creditors recommend credit counseling. It does NOT hurt your credit, like debt settlement does.

Please contact me so we can discuss this further and we can go over a free, no obligation debt analysis

Lauren Kahn
lauren_kahn@yahoo.com
877-632-3328