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If you get to the point you had several late payments, your nice interest rate may be pushed up (21% in my case). In my case I lost my income and got two months behind in payments.

It's probably not the best time to apply for one of those low introductory rate cards either. In a nutshell you got your back to the wall.

Try calling one of the non profit Credit counseling agencies. The one I use is called genus. They are able to negociate a plan with all your credit card provider.

In my case I got a 10% rate on three cards and 6% on one. My total monthy payment got lowered by $100. They also brought my account current (whcih mean I didn't have to catch up on miseed payements)

The agency only charges $8.00 or so a month. One credit card company employee told me that the credit card company gave away the agency 10 to 15% for their services.

You might be able to negociate plans with financial institutions direclty but one of my cards only offer that as a temporary solution.

The bottom line is that they are willing to bite the bullet in order to avoid red ink.

One caution though. If you miss paying the agency three payments they will drop you off from the program. So don't start paying the credit cards directly other than to avoid getting three months behind.

Being dropped off the program is not dramatic but one card tried to increase my rate before letting back on a program,

My agency takes ten business days to disburse funds so it's wise to pay the credit cards directly to avoid reaching that treshold.

I don't know what happens when you get three months behind.

For those concerned about my credit worthiness after a year on the plan I started getting credit card offers in the mail.

There is a mention in your credit report that you joined a payment program. The agency told me it was a neutral entry.

It seems that missing payments is the cardinal sin in the credit world. At my lowest point one credit card asked me if to send a $5.00 payment.

One last point, realize that "non for profit" is a far cry from sainthood. They are out there to make a buck and can be as inflexible as the credit card companies at times.

Overall they've been helpful, but you still need to keep in touch with your credit card companies if you start getting behind on your plan. In this case you will need to talk to both the credit card people and the agency to make sure your plan stays on track.

You can drop off the plan at any time. Your credit line will be frozen as long as you are on the plan, but you can drop off the plan at any time.

My agency is called Genus and despite some rough edges I recommend their services.

I don't know if my low interest rate is fixed for the period of the plan. I'll follow up on that at a later time-
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That sounds like a great idea, but a second job, part-time will keep a lifeline towards paying those minimum payments and keep you afloat. This is the best thing that I ever did as well as sitting down with a damn good budget that worked well. Unfortunately, no one discusses how to budget and how to pay back those cards using a strategy that one can live with.
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<<Unfortunately, no one discusses how to budget and how to pay back those cards using a strategy that one can live with.>>

Amen, sister. This is exactly what I have been struggling with. I posed a question on another board asking for budgeting help and have not received a response so far. Since it is a little off the topic, I was reluctant to ask here, but since you brought it up...any suggestions?

Christine
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Christine,

I did some searching, and came up with the following link for those looking for stuff dealing with budgeting.

Hope this helps!

http://www.fool.com/Credit/Credit.htm

Tony
...but I still am...

Off2Aruba
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<<Amen, sister. This is exactly what I have been struggling with. I posed a question on another board
asking for budgeting help and have not received a response so far. Since it is a little off the topic, I
was reluctant to ask here, but since you brought it up...any suggestions?>>

Before I first set up a budget, I recorded everything I spent in a small notebook; just to see where everything was going. I then went through my checkbook to see where recurring expenses were (like auto insurance payments). Came up with this list of expenses

Rent
Utilities (gas/heat/electric/phone)
Income tax
Auto insurance
Gas/travel expenses
Food cooked at home
Food eaten out
Health insurance
Investments
Entertainment
Family/holiday travel/gifts

Some of this is lifestyle -- note that it's rent, not mortgage, and there's no entry for debt repayment or auto loans. Entertainment is the most difficult entry to budget for, as it's easy to put in an inadequate amount, but the budget then becomes impossible to keep.

It's probably best to look at some expenses over a year, as they don't show up every month, then divide them by 12 to get a monthly cost.

Income was simple -- only my paycheck. I assumed that all investments would be reinvested, so did not consider that a source of income.

I know that there are a number of programs that will help with budgeting under different assumptions. Quicken will, although I've never used it, and there are probably some shareware versons that will ask questions to find things that I didn't even think of (or didn't apply to me at that time).

Crazyfred
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I have a spreadsheet that I developed for budgeting purposes that includes everything that might possibly apply to my life as far as categories.

I also developed a spreadsheet that calculates interest rates and payments for credit cards and other interest charging loans (which you can also use for interest BEARING stuff).

If you're interested, I'll be happy to email it to you.
(and explain how to use it). I even put ALL my credit cards and loans on one page and figured out EXACTLY how much in debt I was -- now I can see how much it goes down every month!


Please respond to me at cassandrad@sprintmail.com
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