I just found out that my credit card went from 6% to 32% and I have a balance of 7000.00. I want to scream. I'm thinking of debt settlement through credit solutions, but they said it will affect me credit. is this something good to do.
2006-07-28 12:21:19 · 14 answers · asked by lovebnjenn 2 in Business & Finance ➔ Credit
Debt settlement, if I take you to mean settle the debt for less than the full amount owed, will affect your credit and probably screw you up worse than not paying at all.
When you settle a debt for less than the amount owed, the amount that you did not pay is treated as income and reported to the IRS as such. So, if you owed $12000 and settled at $6000, then the credit card company will report $6000 of income in your name to the IRS, which will then hit you up for taxes and put you further in the hole.
If by debt settlement you mean credit counseling, then make sure that the counseling agency will be paying your bills. Really, credit counseling does not do anything that you could not do yourself. They only act as a middleman, but if you communicate your inability to pay to your credit card company, they will afford you the same breaks as if you went through credit counseling.
The White Collar Ruckus
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2006-07-28 15:17:17 · answer #1 · answered by Anonymous · 0⤊ 2⤋
Boy, a person doesn't have a chance of paying of a loan with 32% interest. I wonder if that doesn't violate usery laws. Anyway, you need to borrow $7000 at a lower rate and pay this off.
To get stuck with a rate this high, you must have done something wrong. If your credit is bad and you cannot acquire the money from another lender, you need to work with the creditor to develop a more reasonable payment plan. I attached a web page published by the FTC. If you scroll down the FTC page, you will see a section entitled, "Solving Your Credit Problems." Check this out, and good luck with this. Cut up this card. It is bad news.
2006-07-28 19:38:41 · answer #2 · answered by Someone with a free answer 3 · 0⤊ 0⤋
What happened to you is known as "rate jacking". Let me guess Chase did this to you right?
I am sorry your in this position as I know it is tough. You can try using http://www.planetfeedback.com/ to contact the company and complain and see if they will adjust their rate.
If you can i would tough it out and just pay it as quickly as possible. At first you will be paying at least 180+ just in interest every month. This might be a small price to pay compared to the effects of a debt settlement program being on your credit report for about 7 years. Some people say it almost looks as bad as bankruptsy on your credit report.
You can take a look at the 3 articles I have about debt management. I hope they can help you out. Good luck!
http://www.creditfamily.com/articles/debt-management.htm
2006-07-30 23:58:45 · answer #3 · answered by CreditMan 2 · 0⤊ 0⤋
What happened to jump the interest rate so high? Were you late on payments? I would try to either get a bank loan for that amount or another credit card and transfer the balance. Those credit help companies are a sham.
2006-07-28 19:25:23 · answer #4 · answered by Jessie P 6 · 0⤊ 0⤋
Try to switch to Washington Mutual, they treat me right, 12%. You must have had a run in with Chase. They raised my interest to 31% too.
At last resort if you can't find another choice, CitiFinancial borrows for 19.99% kind of high but not as high as 31%
You right be able to get a personal loan at a bank or credit union for 10% I did that for part of my debt.
Best way now is get out of debt and never go back into debt.
2006-07-28 19:32:01 · answer #5 · answered by NOVA50 3 · 0⤊ 0⤋
If you have decent credit, I would apply for a personal loan to pay it off. Another option may be to find a deal with a bank that offers balance transfer options with a low rate on those transfered balaces.
If all else fails, seek credit counseling. I did it and I had my debt paid off in five years. You cannot use credit while using their services, but it really teaches you to live without it.
2006-07-28 21:24:24 · answer #6 · answered by kay S 4 · 0⤊ 0⤋
Those BASTARDS!
Get another credit card with 0% interest on balance transfers. There will be a one time fee (usually 3%), and the 0% is usually for a year. If you don't pay it off in the year, do it again.
2006-07-28 23:55:16 · answer #7 · answered by Anonymous · 0⤊ 0⤋
if you have other alternative, don't do it. If not your only choice is to do it, but be reaady for the consequence of having to tight budget to enable you come out of low or no credit state after placing your debt with Cedit Solution. Your interest rate went up because somehow you delayed or defaulted in payment.
You cannot eat your cake and have it. There must be sacrifice.
2006-07-28 20:13:26 · answer #8 · answered by Olugbenga O 1 · 0⤊ 0⤋
same thing that happened to me. I went up to 32% because I missed a payment & was late, back to back. I never knew they can do this. I was so devestated, I owe them BofA 12,000. Dont know how I will ever pay it back... I betta buy a lottery ticket...LOL
I have one more month of $436. payments then I will go down to 17% wow real break.
2006-07-28 19:27:07 · answer #9 · answered by Anonymous · 0⤊ 0⤋
if someone wants to get out of debt today it is pretty easy with a debt consolidation plan
however it may get a bit tricky at times, I suggest you get as much information as possible online on this first,
a good place to start in my humble opinion is:
http://umgarticles.atspace.com/debt-consolidation.htm
2006-07-31 05:18:41 · answer #10 · answered by Anonymous · 0⤊ 0⤋