Consolidate my debt? Higher APR, but what does that actually mean?
"There's a cliche, ""out of the frying pan and into the fire"". I've never had the occasion to use it till now.  I understand some people find they have a dozen cards and struggle to keep organized. An extra percent or two seems worth the feeling of just one payment to make. In your case, 3 checks (or online payments) per month shouldn't push you to a bad decision. Twice the interest? No thanks. Just make the minimum payments on the two lower rate cards, and pay all you can to the highest rate. Do all you can to cut expenses. The only way out of this is to change your habits avoiding what got you here in the first place." does that mean that 30% of my monthly payment goes to interest? No, it's much worse then that. The APR is the annual percentage rate. An APR of 30% on $23,000 in debt that means you'll be charged $6,900 in interest for the year. You'll actually owe slightly less since you are reducing your principal slightly over the course of the year. If your monthly payment is $800, $575 of that will be going to interest. That means that over 70% of your monthly payment is going just to interest. This deal makes no sense at all! You'd be better off simply transferring all of your balances on to the credit card with the highest interest rate. You'd be paying almost $200 a month for the 'convenience' of writing one check rather than three. No, it means that each year (Annual Payment Rate) you are accruing interest at 29.8%. If your principal is $10,000, that means you are gaining $3,000 of debt per year in addition to this, excluding payments you make/interest on interest. Your question indicates you really don't have a good grasp on personal finance.  you might want to read a book or two.  I'd recommend attending Financial Peace University, but my buddy Joe Taxpayer would throw an egg at me for that.  Please take some sort of class. In the mean time, here is your plan:  Pay this off do not borrow more. No.  It means each month the total amount you owe goes up by a factor of (1+0.298/12).  So if you owed $23K at the beginning of the month, at the end you owe a total of 23K*1.0248=$23,571.  Then subtract the $804 you are paying.  If you want to think of it in terms of interest and principal, you are paying $571 a month in interest and 233 toward principle, I guess. Paying off debt with a lower interest rate using debt with a higher interest rate is throwing a lot of money away and impoverishing yourself needlessly.  Psychology can't get around that.  If you want a psychological aid, decide how much you are going to pay toward these debts and have it automatically deducted from your paycheck so you never see it. Make the minimum payment on every debt you have except the one with the highest interest rate.  Pay the very most you can toward that.  Then when it is paid off, move to the next highest.  Do all your spending out of the lowest rate card, or avoid using these credit cards until your financial discipline and resources allow you to pay all credit cards off completely at the end of each month.
"The bottom line is that this just does not work, and as such you should not do it.  Here is a question that you really need to think about:  How will you handle non-payments?  How will you handle it when they talk about purchases they made or vacations they went on when they have been short for the last three months?  Yes, it will happen. The majority of people who engage in debt consolidation, which you are proposing, end up with the consolidated debt and more consumer debt.  One cannot borrow themselves out of debt.  Carrying credit card debt is a sign of poor money management and improper spending behavior.  That behavior will not change if you ""bail them out"" with the consolidation.  They need to find a way to work their way out of this situation by budgeting, living a more austere lifestyle, and earning more.   Encouraging them to do so will serve them far better then your generous attempts to reduce the pain of their own making. In the end it is always a parent's desire to help their children.  If you can afford to give, then it is well within your right to do so.  It is also within your right to qualify that giving with behavioral conditions.  However, if you cannot afford to give, it is best not to loan." According to the Trulia reference on the issue, New York is a recourse state. Recourse means that the lender can go after you for the difference between the foreclosure discharge amount (in New York - the higher of the FMV or the actual sale price) and the debt balance. That includes garnishing your wages, seizing your assets, and any other method of collecting the judgement. The relevant law is in the New York Consolidated Laws - RPA Article 13. The option you're talking about is the option any lender has anywhere - not to sue you for the difference (provision 3 of the paragraph): If  no  motion  for  a deficiency judgment shall be made as herein   prescribed the proceeds of the sale regardless of amount shall be   deemed   to be in full satisfaction of the mortgage debt and no right   to  recover   any deficiency in any action or proceeding shall exist. So if during the foreclosure they didn't sue you for the difference - they cannot change their mind after that. If you're not sure you can repay the loan - you should probably walk away from the deal. Why not just get another credit card and transfer the balance? Many of them will give you special perks like x months of no interest for doing so. Also, once you call to actually cancel the card you will see for sure whether they really have any power to negotiate rates. From their perspective 15% APR is more than 0%APR which is what they'd get if they lose your business. The main problem is that everyone graduates from high-school, almost everyone gets accepted to college and almost nobody who put minimum efforts fails college classes. I know that! I was an adjunct professor and was told I can't fail my students except in extreme cases.  In the past, to graduate from high school was a hard accomplishment. Getting accepted to college was a hard accomplishment. Surviving the first year in college was an accomplishment and getting a degree was an accomplishment.  Those accomplishments in the past gave you excellent benefits! Benefits of assured respected jobs, income, security, and being the exception.  An example: in the past, to be a teller in the bank, you did not have to finish high-school, just be good in basic math. Today: a teller in the bank, one of the lowest paying jobs you can find, requires a Bachelor degree. Does the bachelor degree worth it?  **Basically, higher education became an industry, that accept as many people as possible, charge them as much as it can, give degrees to undeserving people, and those degrees are almost worthless. You can't do much with a Bachelor degree!**  The solution is to make the standards for high school and college much higher.  Everything will fall into place then.   Fewer students who are actually interested in studies and are qualified for their studies will mean better teaching, lower costs, and much better benefits for those deserve those benefits.  Chances of this happening? Big big zero. Actually, the chances of even lower standards for colleges and schools are 100%.  So, for my son, I explained to him to not invest much in an excellent and expensive college for [worthless] degrees. Instead, while he studies, work in the area he is interested in and learn from the masters he works with. My son is 13, but since being 11, he works (yes, he makes money) with some computer system he's interested in.  Personally, I worked since I was 13, study and worked all the time, got my Bachelor and Masters, and I am doing extremely well. I get paid for what I know, which Zero of it came from my studies and money I spent in those studies. This shows the impact of the inquiries. It's from Credit Karma, and reflects my inquiries over the past two years. In my case, I refinanced 2 properties and the hit is after this fact, so my score at 766 is lower than when approved. You can go to Credit Karma and see how your score was impacted. If in fact the first inquiry did this, you have cause for action. In court, you get more attention by having sufficient specific data to support your claim, including your exact damages. Your utilization ratio history is irrelevant to its impact on your credit score.  If you run up 80% of your utilization In January, then pay it back to 10% in March, your score in March will reflect the new reduced ratio with no memory of the 80% utilization last month. With that said, don't go around overspending just because you have 0% apr for a little bit.  Spend what you would spend with cash. "Credit reports have line items that, if all is well, say ""paid as agreed."" A car loan almost certainly gets reported. In your case it probably says the happy ""paid as agreed.""  It will continue to say that if you pay it off in full. You can get the happy ""paid as agreed"" from a credit card too.  You can get it by paying the balance by the due date every month, or paying the mininum, or anything in between, on time. But you'll blow less money in interest if you pay each bill in full each month. You don't have to carry a balance. In the US you can get a free credit report once a year from each of the three credit bureaus. Here's the way to do that with minimal upsell/cross-sell hassles. https://www.annualcreditreport.com/  In your situation you'd probably be smart to ask for a credit report every four months (from each bureau in turn) so you can see how things are going.  They don't give you your FICO score for free, but you don't really care about that until you're going for a big loan, like for a condo. It might be good to take a look at one of those free credit reports real soon, as you prepare to close out your car loan. If you need other loans, consider working with a credit union. They sometimes offer better interest rates, and they often are diligent about making credit bureau reports for their good customers; they help you build credit. You mentioned wanting to cut back on insurance coverage. It's a worthy goal, but it's generally called ""self-insuring"" in the business.  If you cancel your collision coverage and then wreck your car, you absorb the cost of replacing it. So think about your personal ability to handle that kind of risk." "Without more info to go on (such as a screenshot of the relevant portion of the statement or what country you're in), I will run with the answer that ""balance"" is the amount the collection agency is attempting to collect from you, including any and all fees the agency may have added. One important idea to keep in mind is that depending on how old the debt is, the amount involved, and the importance to the agency to collect it, you may be able to negotiate a settlement for less than the full amount.  This isn't always possible, but sometimes you get lucky, and it doesn't hurt to try. Collection agencies work in several ways.  Some will actually buy the outstanding debt from the original creditor for some percentage of the debt's face value and then take their chances on whether they collect anything at all, while others work on behalf of the creditor and earn some percentage of what they manage to recover.  In the latter case, your chance of negotiating a reduced amount is better, because the agency is being evaluated by the creditor on how quickly and efficiently they collect debts.  An agency that is slower or less effective than another is less likely to continue earning the creditor's business. I hope this helps. Good luck!"