Card Credit Debt Plan Reduction

I unfortunately am one of many who has too much credit card debt and due to some past glitches, my interest rates are high. I pay my bills and try to pay as much as I can but can't seem to put a dent in the load. I keep hearing on radio and TV about these "cut your bills in half" credit card relief plans but I am very skeptical of those plans. Any advice....recommendations?

The services you hear about on T.V. will cost you money but is worth it in the long run. They will negotiate with the credit card companies and reduce the amount you owe and stop the recurring interest debt. I'm not sure if they still do this but years ago I went to the Chamber of Commerce in North Carolina and did the same thing for free. I had to bring them all of my credit cards, which they promptly cut up. They then contacted all of my debtors and got them to stop adding interest to my debt. Every week I brought the Chamber an agreed upon amount which they divided up among creditors. My only out of pocket expense was for the credit report, which was about $20 (about 20 years ago). Good luck.

2008-06-03 16:35:41 by Steve A

Getting credit-card debt relief starts with the ability to set up a good budget and paying down credit-card balances. Discover other ways like ...

(Before anyone leaves the inevitable smart-a*, "deadbeat" remark, I'm not a deadbeat. I've been laid-off due to the economy 5 times in the last 7 years and the employers who laid me off gave me BOTH raises & promotions prior to the layoffs. I'm now re-employed by one of them.)

Rather than go into Chapter 7 or 13, my creditor (unsecured credit card debt) told me they would put me on the following plan "IF I QUALIFY". They said they will ask me the qualifying questions on Monday.

5 Years to pay back the entire balance
2 to 3% interest rate
No fees
Payments will be 1.75% of the balance ($152 per month)
and after 6 months they will "re-age" the account to show it as paying on time.

Can anyone tell me what questions a bank has asked them in this kind of "qualifying questionnaire"? I'm sure it'll be, "How much do you make presently, what are your expenses, etc." but I would like to hear from someone with personal experience in this -negotiating with the creditor.

I understand. I went through that but I had a ton of debt. I used CCCS. Consumer Credit Counseling Services. The first counselor was not for me. The 2nd one was great. They said 5 years but with additional layoffs it took 10....but I owed $125,000. But I did it with no bankruptcy. Never heard of qualifying ... just show up and they re-negotiate with creditors. Just keep paying and all will be fine.

If you are doing the negotiating one-on-one with a creditor that is different...they may have some requirements. But CCCS can do it for you because they deal with creditors constantly. They will probably know in advance what will happen.

There are probably other good services out there but CCCS is the only one I have experience with.

Good luck and you will do it !!

2007-02-03 14:37:11 by Gary D

If I can negotiate the payoff but I can't get an affordable monthly payment plan, should I use an overdraft loan (set up for my checking account) to pay off credit cards? The interest rate is much lower and it would be one payment, as well as a significant reduction in my credit card debt.

You should negotiate with them that they would not add any derogatory info on your credit report. Make sure they sent a letter before you pay them. Take their offer and pay them with overdraft.

2009-05-26 12:16:13 by Robyn

I have around 1,600 dollars in credit card debt, i was wondering if anyone had a good idea/plan to pay this off faster than minimum payments? i make around 900 a month and only have to buy lunch and gas.
i cant get more hours or another job.

The best debt reduction plan is simple. Increase your income and reduce your expenses and use the extra money to pay down your debt. If your only expenses are lunch and gas (I doubt those are the only things you spend your money on, how did you accumulate $1,600 in debt on just gas and lunches?) you can't cut expenses much other than bagging your lunches. So that leaves increasing your income. Maybe a better job, or more hours or a second job. $900 a month is pretty minimal. If you have other expenses other than the lunch and gas, seek ways to cut those expenses.

2008-05-26 08:04:28 by Britt

I am trying to set up a debt reduction plan where I pay off the account with the highest interest rate first, then move to the next highest, etc. My question is, which interest rate on my credit card statement do I use for this prioritization? There's an Annual Percentage Rate and an Effective Percentage Rate and then I think there was still another. On one of my cards, these range from like 8% to 29% depending on which one you look at. It's a shame I'm such an idiot when it comes to these things ! Thanks for any help...

Howdy, I answered this question for you at www.coddleshell.com - my own personal finance blog. I've pasted the answer below, I hope it helps!

Good question, you shouldn’t feel so bad about not knowing what is what when it comes to credit cards. They can be a dangerous tool as I’m sure you are now finding out. You’re right on with trying to reduce debt, starting with the highest intrest rate and working yourself down.

Both rates, the annual percentage rate (APR) and the effective interest rate (EIR) are both the same rates. Confused? So is the majority of everyone else.

An APR is a way to standardize and compare interest rates among lenders. It is an annualized rate that takes into account the total cost of borrowing. It is intended to standardize rates, as stated before.

The EIR is the rate you’re paying compounded X number of times per year, usually 12. Compounding means that every month, your balance is averaged (depending on the card and terms and conditions) and that amount is used to calculate the finance charges next month.

The other interest rates are probably rates like balance transfer or cash advances, etc. Don’t worry about those when comparing the cards.

To answer your question, in terms of comparing to another card, you should use the APR. The card with the highest APR should be paid off first, repeat this until you’ve got it all paid off.

2007-06-20 10:53:24 by Schleppy