The only thing a debt consolidation company did for me was to open my eyes. After going through the whole application (and breakdown of expenses) they found that I still had $500 on hand each month after ALL expenses including $200 in savings. I am 24, single, recent college grad making a good salary.
After running a few numbers, I called all 4 credit card companies and arranged short term payment plans. Note: at a point, I had all 4 cards maxed totalling about $15000 in debt. 3 months later I have 3 cards below the limit and 1 on its way next month. Whats more, Citicards who controls 2 of 4 cards called me to tell me that they will be reopening my account next month.
On the other hand, if I had gone with debt management companies, TRUE that they would have arranged for lower interest rates - but apparently that looks really bad on the credit report - not being able to manage your own debt. Plus, I was told that during the 3 years of debt management, all 4 cards are closed and one has no operating credit. I prefered to pay a little more in interest and get credit operation back. Its going ok now, and I am watching every penny I spend including maintaining a detailed spreadsheet of expenses.
In July when I got a bonus, I put 75% of it towards debt payments - figured, I hadn't planned for it so might as well spend it towards past indulgences.
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