Well, between losing my job 8 months ago and now facing a divorce after 17 years I'm backed into a corner with having little money and a few credit card bills I'm one month late on. I have had two card companies call me and offer to put me on a lifetime program of 0% interest and payments that are half of what I was paying.
Since I have never been late on making a payment in my life, I'm not sure if I should accept the program but realize I don't have enough money at the moment to keep the accounts open and then have to pay what I was paying.
I was also told that the accounts will be closed so not sure how that will effect my credit or if that will cause my other card that I am in good standing with to tighten the screws on me also.
I guess at this point it doesn't really matter but I have had an excellent payment history with all of my credit cards for 18-20 years and I hate to have them closed, but maybe it's for the best. I don't think I have any other options.
So, is this the right thing to do? And, since I will be paying back the entire amount, will it look really negative on my credit since they are closing the accounts if I enter the program?
Thanks for your help
go for debt consolidation
Hi Mike,
Can you tell me how many credit cards do you have, and what is your debt amount? You can try consolidating your debts. In debt consolidation the interest rate is lowered, and you need to make a single monthly payment. Consolidating your debt means combining all your debts. Thus in debt consolidation you need to take out a single loan in order to pay off all your debts.
If you join a debt consolidation company, they will negotiate with your creditors to lower the interest rates, and they will forward the payments to all your creditor's each month.
Thanks,
Aaron
Would having a debt consolidation company be more beneficial over having myself deal with each individual card company? It appears as if no matter what I do they are going to close the accounts so I don't know which option would better fit my situation.
The interest rate on the deal/plan they are offering is already at 0% until the debt is paid in full. This is my first attempt at dealing with this type of situation so not sure why I would need someone else to handle it for me, but maybe I'm not totally understanding the differences between debt consolidation and doing this on my own.
Thanks for your time
Mike, I believe the debt consolidating company would still end with the same results. They would more than likely call your creditors and try to arrange some type of deal that would like what they offered you except maybe not as good.
You are wise to accept the fact that you may have to go a certain route whether it hurts your score or not. Believe me it is better than having collectors and lawyers calling.
It sounds as if the credit card companies have really offered you an amazing deal. I would seriously consider it looking at your recent situation. This economy has effected so many. You are not alone. A lot of people has had to make decisions they normally would not make. Good Luck.
First off I agree with fireyone, they have made you one heck of a deal, I would do whatever I could to make it happen.
What is up with the job situation? You may have to take a job that you don't want to keep things moving in the right direction. Can you expand on this please, I think if you tackle this one you will have half the battle fought.
Is this a good deal and how will it effect my credit?
Mike,
Certainly if you are able to talk with the creditors directly and make arrangements that is fantastic. However; it's a matter of who you get at the other end of the phone that may determine how much they are willing to work with you to help you reduce your debt. If someone is willing to work with you, so much the better. It's when you are getting negative feedback when you have to consider alternatives.
A non-profit debt consolidation organization has established relationships with the creditors. The relationships are a slight advantage because of the level of consistency in communicating with the creditors to negotiate the lower interest rates. Additionally even if some creditors agree to an arrangement, others may not, you can still utilize the services of a non-profit debt consolidation organization to help with the other who did not agree to make arrangements with you.
Hope this information is helpful.