Credit Card Debt...

[SaltySqueegee]

Okay,

So I have yet to get in, but assuming that I do, what have other people done with their massive credit card debt (mine's around $7,000). I'm not talking about official educationl loans, although that is what they were primarily used to cover, that and application stuff. I'm talking about VISA, CAPITOL ONE, etc.

From what I've gleamed, Medical schools are more than willing to help with previous federal-loans-type schooling finance consolidation, however, they will not touch credit card debts with a ten foot pole. What have some people in similar situations done with their debt. Is their a creditor that I can use to consolidate this debt and defer it till after Medical School for a low APR.

Thanks in advance, and yes, credit card debt was my only option.

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[Moose99]

I'm kind of in the same boat, applications, MCAT, travel, it adds up. Don't think there is much you can do though. Easiest solution is probably to let your financial aid package settle out, then you can go to one of those private lenders that LOVE med students and take out one of their loans (the type of private loan for people who don't qualify for all the Federal loans/institutional aid but aren't actually living off a trust fund either.) This will at least get the credit cards off you back and get the debt to a manageable interest rate. Good Luck.

 

[camstah]

$7000? try $18,000....yes, that's right, you heard me....from grad school (what i couldn't pay for with loans and working) and applications...sucks...but i'm trying like heck to pay it off before july......i have three jobs right now.....and whatever is left should be manageable (i'm shooting for having less than $5000 left before i start med school...)

 

[pwrpfgrl]

a good short term option may be to try to transfer as much as possible to a card that does 0% interest on balance transfers. I've seen some that will keep it at that rate for a year. You can then try to pay it off with your loan money - at least you won't be accumulating interest while you figure out how to pay it off.
good luck!

 

[exmike]

Originally posted by camstah
$7000? try $18,000....yes, that's right, you heard me....from grad school (what i couldn't pay for with loans and working) and applications...sucks...but i'm trying like heck to pay it off before july......i have three jobs right now.....and whatever is left should be manageable (i'm shooting for having less than $5000 left before i start med school...)

yeah try to pay off as much as possible b4 med school

 

[camstah]

yeah, i've got some of it at 0%, and some of it at around 6%, but still, the minmum payments alone would kill me if i didn't pay it off before med school.....

 

[Blade28]

Originally posted by camstah
$7000? try $18,000....yes, that's right, you heard me....from grad school (what i couldn't pay for with loans and working) and applications...sucks...but i'm trying like heck to pay it off before july......i have three jobs right now.....and whatever is left should be manageable (i'm shooting for having less than $5000 left before i start med school...)

Wait 'til after med school, when you could owe $140,000 (or more) in student loans.

 

[camstah]

student loans i can handle...this is credit card debt, very different!!!!

 

[SticknRudder]

wow, and I thought I had a lot of debt at $1500!

 

[DoHzA]

I JUST CLEARED MY BALANCE
YIPEE!!!

 

[Blade28]

Originally posted by camstah
student loans i can handle...this is credit card debt, very different!!!!

True true. But I feel your pain. 4 credit cards here, all with very high balances.

 

[maya]

I'm not sure if you're aware of this, but you can actually call the toll free number on your credit cards and ask for a lower rate. Tell them that you've received a great offer in the mail and that you plan to transfer the balance and close the account if they don't match the low rate. I tried this with all three of my cards and it worked! One of my APR's went from 19.9% to 10.9%, and that can make a huge difference. I was actually able to get one of them down to 7.9%...

Now it's easier to pay those bad boys off and hopefully by the time med school becomes a reality, they won't be as much of a problem.

 

[Xmulder]

Originally posted by camstah
$7000? try $18,000....yes, that's right, you heard me....from grad school (what i couldn't pay for with loans and working) and applications...sucks...but i'm trying like heck to pay it off before july......i have three jobs right now.....and whatever is left should be manageable (i'm shooting for having less than $5000 left before i start med school...)

Hi guys,
are you guys older applicants or non-trad's? Is your having higher balances a result of having been out of school for several years? Or perhaps you are married w/ kids??

 

[Chrisobean]

you can keep switching cards. get one with a 0% intro rate on transfers, pay as much as you can until the 0% rate runs out, then tranfer your balance to another card with a 0% rate.... rinse and repeat.
this is the way to play the credit card game.

and you absolutely can call up and ask for a lower rate, i did that once with a discover card and they offered me 0% when it was originially 18%... yeah thats right. they want to keep you as a customer, so if you keep saying you have a better deal elsewhere they will do everything they can to accomodate.

and close (i mean, call up and cancel) all those unneccesary cards you have. i must have opened about 10 cards while shopping to get the discount and never used them again... but even though you have no balance, they still come up on your credit report as debt because you have an available credit line. at least call you have your credit limit reduced. this is really important if you are trying to get a private loan.

i just got my bill under 1g for the first time ever! hooray!

 

[camstah]

yeah, i've played the float the balance game, but after awhile you get too many credit cards, and if you transfer balances more than twice in six months (i think???) then it starts to affect your credit rating....but i'll get it under control, hence the three jobs and ridiculous work weeks.....
but good for those of you that are finally credit card debt free (or almost there)!!!!!!!!!!!!!!! when that day comes i'm going to celebrate.....but in a very small, inexpensive way

 

[greenie8]

This post is not been to be judgemental, I'm just really curious.........

One person said they spent money on school and application stuff.

What do the rest of you use credit cards for? To buy clothes, food etc?

I don't own a credit card so I'm not quite sure how debt gets racked up so high.

Enlighten me!! Thanks

greenie

 

[oldtimer]

I put $5000/month on my credit cards...but it's because I travel so much.

 

[DoHzA]

Originally posted by Chrisobean

but even though you have no balance, they still come up on your credit report as debt because you have an available credit line. at least call you have your credit limit reduced. this is really important if you are trying to get a private loan.

[/B]

WHAT DO YOU MEAN?

if i have no balance but a high limit, that's gonna hurt my credit score?
i doubt that

prove me wrong please

 

[Chrisobean]

i think it does hurt your score a little... b/c that money is AVAILABLE. it shows as debt, even though there are no charges on the card. my aunt told me this when she got her credit report recently, and there were cards on it that she hadnt used in years, but never officially cancelled them. maybe i am interpreting wrong.. but i dont think so.
i think you should get your limit lowered, thats what i would do.

 

[DoHzA]

that makes no sense

I can't imagine asking a bank for a loan and them saying "Sorry Dr. DoHzA, after checking your credit we have noticed that the credit company has granted you a very admirable credit line but unfortunately you pay all your balances on time and you have zero debt at this time so we really can't trust you with a loan that we know you'll pay back promptly"

 

[Reckoning]

As a former 10k debt load holder, I feel your pain. I played the credit card round robin game. And I think having extra credit cards is more of an identity theft liability than a credit liability. I think credit card companies and car salesman like to scare you about changing your credit info.

I killed my debt by eating rice and finally taking a second mortgage on my home (obv that's not an option for most of you). It was gone in a year and we set up some great savings/investment habits to boot. Now I borrow from the Reckoning Bank at 0% interest.

As to how you might defer your debt till after school... Doubt this is possible but talk to your bank or call a CPA for ideas. If there is a way I imagine it ain't cheap.

If you can make it to Med school you can climb this moutain too!

 

[edik]

When you take your first financial aid, make sure to request enough to cover that balance. True, you may tap into some non-government loans, but still, they defer until you finish med school and probably residency.

 

[ken37]

Originally posted by DoHzA
that makes no sense

I can't imagine asking a bank for a loan and them saying "Sorry Dr. DoHzA, after checking your credit we have noticed that the credit company has granted you a very admirable credit line but unfortunately you pay all your balances on time and you have zero debt at this time so we really can't trust you with a loan that we know you'll pay back promptly"

It may seem crazy, but it's true. Large amount of available revolving credit available will negatively affect your FICO score. However, if everything else about your credit is good, it shouldn't be a problem.

 

[DoHzA]

can i see some hard facts on this?

 

[Blade28]

Originally posted by oldtimer
I put $5000/month on my credit cards...but it's because I travel so much.

Whoa, where are you traveling to? Why so much?

 

[Blade28]

Originally posted by maya
I'm not sure if you're aware of this, but you can actually call the toll free number on your credit cards and ask for a lower rate.

Really? Damn, I'm going to have to try this! I didn't even know negotiation was possible...thanks for the tip!

 

[priscy921]

Originally posted by DoHzA
can i see some hard facts on this?

it's true! you can probably google search the criteria for a fico score and find it. the reason that it counts as a few points against you is that having alot of credit cards with lots of high credit limits means that you could go crazy and decide to spend a whole bunch of money and go into debt very easily. but like an earlier poster said, if your credit history is good, it really won't be that big of a deal and won't count as much against you as it would if you actually ALREADY had debt as high as those limits. so don't stress about it too much.

 

[DoHzA]

How about this:

1 credit card, high limit, zero balance...

GOOD OR BAD?

 

[priscy921]

Originally posted by DoHzA
How about this:

1 credit card, high limit, zero balance...

GOOD OR BAD?

that's fine!!!!!!!!!!! stop worrying

 

[haldane3]

Isn't it horrific that there are so many questions about credit cards, balances, and reports?? I'm in the same boat, some things you just don't know until you ask. Makes me feel kind of like we're all being had hardcore....nothing in contracts or aprs states anything about having an available balance damaging your credit report...bothers me greatly.

 

[camstah]

yeah, i was surprised when i found that out too (a few years ago)....they make my you feel so good about having a high credit limit, but all the while it may be hurting you.....some credit card companies suck....but there ARE those credit card companies out there that are careful about increasing your limit too much....

 

[gleep and gloop]

Actually, it's generally not considered a good idea to cancel all of your old, unused cards, at least in terms of your credit score.

1. Length of credit history is an important factor in your credit score, so cancelling old cards will actually give you a shorter average credit history and ding your score a little bit.
2. The FICO formula doesn't actually take into account the total amount of credit available, but instead the percent of that credit that you are using. So assuming you have a fixed amount that you're going to owe, cancelling some of your unused credit will give you a higher percentage of credit utilization (amount owed vs. amount available) and lower your score.

Obviously you don't need to keep every card you've ever had, but don't go cancelling a ton of your cards thinking that it's going to help you.

 

[ChE_Babe]

Actually the first point in the above post is not correct. Unused cards decrease your credit score more than shortening your average credit history. While the second point is correct, it is better for the purposes of medical school financial aid to cancel unused cards because of what private lenders will see. A large proportion of students rely in part on private loans to pay for school and those lenders would rather see someone without large balances available (it is interpreted as "potential debt"). Even if it lowers your credit score a little to cancel them, it will increase your chances of recieving a good private loan.

 

[madcadaver]

I highly recommend learning about credit score and how it is calculated instead of listening to a bunch of anonymous posters, some of whom clearly do not know what they are talking about. The bottom line is that the best advice cannot be given without knowing more about your specific situation-- your other types of debt, your income, etc. It probably wouldn't be a bad idea to shell out a few bucks to talk to a financial advisor at this key time in your financial existence. You can also get a credit report with FICO score from Equifax or a variety of other sources that has a "credit simulator" where you can see how your FICO changes in different situations.

Here's a nice site with some good information on credit and credit scores.
http://www.fool.com/ccc/ccc.htm

Good luck.

madcad

 

[Mr Reddly]

From madcadaver's link....
BTW, thanks for the link. (any new news on when Davis will stop interviewing and make the waitlist this year )

4. Amount of new credit. Each time you apply for new credit, an inquiry shows up on your report. Red flags start waving when you take on more credit -- or even just apply for new credit -- in a short period of time. This is one area where good habits can work against you. If you prove yourself a reliable bill payer, charge card issuers will be quick to offer additional credit.

Future lenders, however, may not take kindly to all this readily available credit. Some fear you will use it to go on a spending binge, quickly undermining standard calculations for determining how much additional debt you can shoulder. This area of credit management carries a 10% weight on your overall credit score.



\/ edit: ohh and I've visited every single one of those threads!

 

[madcadaver]

Sorry... wish I could tell you something about the immense bureaucracy that is Davis admissions but I can't. As I have told people in a couple Davis pre-allo threads, patience is a virtue-- I didn't get in until July!!

To the topic at hand--- Reddly's quote from motleyfool demonstates that income makes a difference. Someone with a 15K income and 15K of available credit is a lot riskier for a lender than someone with a 150K income and 15K of available credit. FICO scores may not adequately reflect this.

(Reddly-- good luck w/ Davis)

madcad