I've been reading different articles and blogs about paying off credit card debt and the one I like most is paying minimum on cards while you pay everything else set aside to one card and one card only until it's paid off. Then you pay minimum on the others while you move on to the next card and then the next.
I actually have quite a few cards, with rather higher minimum payments...
How detrimental would it be for me to not make the minimum payments (or any payment) on the other cards and use that lump sum to take care of 1 card in itself in only one month?
I have 4 cards that I could pay in just one month...if I didn't have to pay the others...
So I'm wondering how damaging it would be...
To skip paying all the cards next month...and pay one of the off completely.
Then the next month or two make the minimum payments and larger payments on the higher balance cards.
Then after a few months...not make any payments on a card and completely wipe out another card in a month?
2007-09-19 06:03:02 · 7 answers · asked by m b 1 in Business & Finance ➔ Credit
How detrimental to not make at least the minimum payments?
Very. Your credit score is based, among other things, on being able to pay creditors in a timely fashion. Payments which are 30-days, 60-days, and 90+days late are items that directly affect your credit score negatively. Remember that creditors are looking for creditworthiness in terms of consistency and being able to pay bills on time.
It sounds like you've done a bit of research and you're starting on the right track with the idea of focusing on one creditor (usually the one with the highest interest rate) at a time. Just be aware of what actions you take that can affect your credit score. Skipping a due payment would be one.
The US government passed a law giving you the right to obtain your credit report (not credit score) from the 3 major consumer credit reporting agencies once every 12 months. The website is:
http://www.annualcreditreport.com
2007-09-19 06:09:49 · answer #1 · answered by Sin™ 6 · 1⤊ 0⤋
This would be a very bad, very damaging idea. If you do not pay at least the minimum for every one of the cards every month, then the cards that you did not pay charge you a late fee and raise your interest rates and ruin your credit rating.
However, you seem to have two many cards. Transfer all your balances to whichever card has the lowest interest rate. Then you will have only one card with a non-zero balance and will only have to make payments on that card. Once a card has a zero balance, there is no minimum payment.
2007-09-19 07:00:55 · answer #2 · answered by StephenWeinstein 7 · 0⤊ 0⤋
Skipping payment is a horrible idea.
Paying off one card at a time is the best way to deal with credit card debt. Work on the highest interest rate card first, even if it is the largest amoung. You save more interest that way.
Since you have multiple cards and some high minimums, you really need to come up with more money to throw at the debt. Start with a very strict budget. Eliminate all the extras -- cell phone, eating out, new clothes, premium cable and internet. Look at all your bills and figure out how to cut back.
Bring in some cash by having a garage sale, or get a second job -- pizza delivery has flexible hours.
If you really set your mind to it and work at it, you could have all your debts paid off in 2 or 3 years and still have a good payment history.
2007-09-19 06:22:42 · answer #3 · answered by bdancer222 7 · 2⤊ 0⤋
Sure, you could pay off 4 cards in one month, and not send payment to another. However, a non-payment will appear on your credit report and reduce your credit score. Your credit score is very important. It sounds like you are rather young, so my advice would be to send minimum payments to the cards that have the lowest interest rates(APR). Then send whatever you can (above the minimum) to your other card. DO NOT FAIL TO MAKE A PAYMENT! Your next step is to cut each, and every, card into many pieces and throw them away. However, don't close the accounts, just throw them away.
2007-09-19 06:22:40 · answer #4 · answered by crazycarl104 1 · 1⤊ 0⤋
dont do that. eventually with your plan youll pay off your cards. but a late payment is really bad it can stay on your record for 7 years i believe. i had a late payment around 2 years ago. it killed my credit score. i was late because we lost our job and couldnt afford it--we had just maxed out the cards due to our wedding. always at least make the minimum payments---no matter what it will hurt your score more than paying off a credit card a few months earlier than if you continue to make the minimum payments....what about balance transfer to one card. i have no idea what your credit is like but that may help and you could make one monthly payment......but please dont miss a payment...not a good idea
2007-09-19 06:25:22 · answer #5 · answered by nikkylyn 5 · 1⤊ 0⤋
It's not a good idea not to make any payment. It will ruin your credit score and may ruin the rest of your life! It is best to consolidate your credit card balances into 1 credit card that offers 0% interest for up to 1 year. You can then pay it off within the 12 months period without paying any interest. There are two credit cards that I think it's best for balance transfers. The first one is the Chase Visa Platinum card, it offers 0% interest on balance transfers for 12 months. The other one is the blue from amercian express. It offers a low fixed apr of 4.99% on balance transfers for the life of the balance. These offers require good credit. To apply for these balance transfer credit cards or other great offers, go here: http://www.creditcardxpo.com/balance_transfer.asp
2007-09-19 06:14:03 · answer #6 · answered by cymakk 3 · 1⤊ 1⤋
That would not be good...and hurt you even more. You absolutely need to make the minimum payments and don't be late.
2007-09-19 06:10:30 · answer #7 · answered by Megz 6 · 1⤊ 0⤋