Will a financial advisor be able to help me with this?

Question

I am recently married (2 years) and both my husband and I had job losses last year so we used our credit cards more than normal. We have a mortgage of about $200,000, 3 large credit cards ($2500, $1500, $1200) and 1 furniture store card ($1000). Other than those, we have a couple of small things here and there (approx $500 total). My issue is we continue to pay $200 on each credit card (min is about $50) but we aren't making a dent in any of them! The rates on all the cards have gone up because we are spending more but when I called the companies, they said they can't lower the interest rates for me! UGH! I have one at 24%!
So I was thinking about getting a large credit card and transfering all the credit card balances to that (they offer 0% interest on transfers for 1 year) to get the balances down, however, I don't want to make any mistakes. I feel like I just need someone to sit down with my husband and I and come up with a plan to help us pay our debt down to just owing on our mortgage.
Would a financial advisor be able to help us do that? and possible help us with getting our rates lowered or transfering our balances?

Anonymous · Accepted Answer

They can help you come up with a plan, but its also something you can do yourself by buying a book and reading up on it yourself. If you have the money to be paying $200 on each bill a month you are going about it wrong. You need to pay the minimums on everything except for one card and you take whatever you have and pay as much as you can towards that one card and within a few months that card will be paid off. Then you move onto the next card. It's up to you which card to choose but In my opinion you take the one with the smallest amount and pay that one off first then move on to the next smallest one. Or you can also start with the one that has the highest APR and pay that one first. It really does make a difference on how fast things start getting paid off.

☆RN Student-n-Mom☆ · Answer

There are debt lowering companies out there that will help lowering your balances and your rates but honestly.. they are a big waste of time.. you will end up just owing them for the amounts that they lowered on your cards. They are a scam.

What you should do is sit down with your husband and write down all the amounts you owe and the interest rates your paying on each card. You need to start from the card that charges your the most in interest and pay the most amount you can on one card at a time and the rest you pay the minimum amount due... so instead of paying $200 on each card you should pay as much as possible on the highest interest rate card. You need to be paying down one card at a time.. just throwing a little money here and there on each card will never lower any of the balances.

No a financial adviser usually is someone like an accountant.. their job is to look at your finances and help you make smart investments and build your savings and retirement.

wertyu_24 · Answer

Yes they can.  You can also do it yourself.  It seems like you want to consolidate your loans and make a single payment on your debt.  What you can do is go to your bank and apply for either a line of credit or a personal loan.  Depending on your credit score and if you currently have a current income, the size of the loan or line of credit can greatly vary.  The loan or the LOC (line of credit) usually charge much lower interest rates and it can range between 5%-9% or more (it will depend on a few factors such as your bank, your credit score, your current income level, etc.)  You can then use this LOC or loan to pay off your credit cards starting with the highest interest rates and go from there.  The loan and the LOC will usually require you to make scheduled monthly payments, and it could be more than what you are currently paying, however it should save you a lot of interest payments.  
Another thing you can do is consolidate your loans by refinancing your mortgage if your term is near the end.  You can go to your current mortgage broker/lender and they can help you out.
How a financial planner/advisor can add extra value is that they will go through with you and create a cash flow statement with you determining your cash inflows and outflows (you can also do this yourself).  Do a monthly cash flow statement and determine your variable expenses and fixed expenses and determine what you can cut out and pay down your debt.

Will a financial advisor be able to help me with this?

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