I got on a spam list and have been getting phone calls nonstop because I was considering refinancing part of my house - a second mortgage.
So finally, I decided to answer the phone and 71 minutes later what she says, the underwriter, is that with a credit card you want to consolidate don't make payments for two months and then basically they will work with you to consolidate those debts into a trust and they charge a fee of $76 a month (that's where their company makes their money. That's their fee) but allegedly they cut the premium part of what you owe down by about $5000. So I wasn't born yesterday and I'm trying to look at all the catches.
1. She says that your credit score will go down for a little while, but not by much. I'm calling fertilizer on this. Transunion FICA is 750. I've never missed any mortgage payments or credit card payments in my entire life. This restructuring sort of reminds me of chapter 13 bankruptcy.
2. I went on and on about how I didn't want a hard credit check and they both assured me that no they only do a soft credit check. Calling BS on this as well.
3. I did learn something interesting that I have to flesh out. Those 0% APR credit card that are 0% for 12 months… Well, she told me that once the 12 months is over you have to, if I understood her right, start paying the back interest of whatever on your card after the 12 months. Well, that's some fine print.

Thoughts? Advice. I've been waiting on a $17,000 IRS refund forever and so I was trying to figure out a way to get out of my cash crunch because I don't believe the check is going to be here within 60 days as the IRS guy told me in person and the Houston branches are completely closed now… You can't get any information.

If the cash crunch can be solved w a 17k irs check, why not just take out a home improvement loan on your mortgage?

You'll pay a couple more years on the mortgage but dealing w 2nd mortgages, debt consolidators, etc sounds like a nightmare

She was absolutely lying about item 3. Any balance not paid off would go to normal credit card interest rate. What she is describing is differed interest which I don't think any of the major credit cards do anymore.

As I understand it, these consolidation companies don't just cause a minor 'ding' to your credit - they wreck it for a period.

Because you pay them instead of your credit card company. Your cards go into default and they swoop in after the fact to and negotiate a lower lump sum payment during the collections cycle (the 'saving $5k' statement from earlier post) and pay with the proceeds you've been paying them.

Gaeilge said:

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3. I did learn something interesting that I have to flesh out. Those 0% APR credit card that are 0% for 12 months… Well, she told me that once the 12 months is over you have to, if I understood her right, start paying the back interest of whatever on your card after the 12 months. Well, that's some fine print.

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LOL.. This is a load of ***** I've used 0% credit cards to start two new businesses. I got about $100k in credit card offers at 0% ranging from 15-21 months. Maxed them all out buying inventory. Made minimum payments until the final payment, before the interest would begin accruing. Basically, the credit cards allowed me to stock my inventory with no cash out of my pocket besides the monthly minimum and financed it for me at 0% for 15-21 months.

What she is talking about is probably 0% financing from furniture credit cards. They're the ones who defer the interest and if the balance isn't paid off before the 0% term expires, it becomes a part of the balance. But if you pay off the principal balance before the 0% term date ends, you're good, and no interest is paid.

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this. she's definitely talking about deferred interest that you have to pay if you don't pay the balance before the term expires. i use this regularly with paypal. they will give 6-12 months 0% if fully paid. if its not, the deferred balance goes on your account.

OP must be in dire credit card debt. honestly, can't believe the op doesn't understand some of these terms.

Don't do it. If you have to settle on the cc debt do it yourself.

If you do pay off the cards get a debt consolidation loan from a personal lender like Lending Club. High interest though not as high as the cards. Pay it off early.

One of the big gotchas about debt consolidation loans is lots of times the person now has bandwidth for … more debt. They add it on and end up owing twice what they did before getting the debt consolidation loan.

Don't do that either.

But if you do consolidate work with a personal lender willing to give a loan without collateral. Or better yet your friendly local credit union. It never hurts to talk to a CU loan rep about a debt consolidation loan. If you have direct deposit with them and a decent credit score they'll be happy to work something out.

Gaeilge said:

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3. I did learn something interesting that I have to flesh out. Those 0% APR credit card that are 0% for 12 months… Well, she told me that once the 12 months is over you have to, if I understood her right, start paying the back interest of whatever on your card after the 12 months. Well, that's some fine print.

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LOL.. This is a load of ***** I've used 0% credit cards to start two new businesses. I got about $100k in credit card offers at 0% ranging from 15-21 months. Maxed them all out buying inventory. Made minimum payments until the final payment, before the interest would begin accruing. Basically, the credit cards allowed me to stock my inventory with no cash out of my pocket besides the monthly minimum and financed it for me at 0% for 15-21 months.

What she is talking about is probably 0% financing from furniture credit cards. They're the ones who defer the interest and if the balance isn't paid off before the 0% term expires, it becomes a part of the balance. But if you pay off the principal balance before the 0% term date ends, you're good, and no interest is paid.

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something else I've noticed in fine prints on balance transfers of 0% is that if you use that card for a new purchase, you are now paying interest on the full balance. So I think this is what it says anyway.

Example from a current citi offer
" If you transfer a balance with this offer, interest will be charged on new purchases and unpaid introductory balances after your 0% introductory APR on purchases expired unless you pay the entire balance (including any transferred balance) in full each month by the due date."


Whatever it means, it's tricky wording.

I've used balance transfers several times, but I never use the card for a purchase while I carry a balance under that 0% offer.

they're not going to penalize you for making new purchases, as that's the entire point of issuing credit cards. Agree the wording is bad, but there's very specific language around when interest begins on the transferred balance.