My wife and I have about $25k in credit card debt. The majority of this debt ($17k) is in her name. We also have about $18k in an home equity loan. I have been paying down on all of my bills but I have one large credit card bill ($8k) that I would like to tackle. I am considering a lump sum payment. I'm trying to be careful of my credit score (674) also. Would you give me some advice on how to negotiate this pay off, things to look out for, your opinion on how to tackle this $8k bill. Also with a credit rating of 674 is this good enough to apply for a 0% APR credit card? I was thinking I could play the transfer game. What your opinion on the balance transfer cards?
Transferring your credit card balance from account to account is not a long-term strategy for resolving debt.
If you are current on your credit card with a balance of $8,000, then there is no way you can negotiate a lump sum settlement without it having a negative consequence on your credit. You should know that settlements are usually done with account holders that are already delinquent on their payments, and the credit card company knows that they might lose out if ever the consumer files for bankruptcy. Being that you have a home loan, they will know that you have other assets and will not be willing to negotiate with you.
If you have equity in your home, then a cash-out refinance will be a much better option to consolidate the debt. A credit rating of 674 is considered a “good” and not an “excellent” score.
I do not see a reason why you should not get approved for a 0% APR credit card. I hope you know that any offer that you get from a credit card company is going to be for a limited time only and your APR rate will reset to the regular rates (as per your credit) once the offer expires. You will also pay a one-time balance transfer fee, which is usually about 3% of the amount to be transferred.
While you can play the “balance transfer” game, you have to be careful as one missed payment could mean that your APR would change to the default rate (as high as 30%).