@felinewarrior wrote:
Greetings-
I've got myself into a situation. Some of this is the tanglings after a divorce, some because I've suddenly had to help my mom out financially - but really, I didn't handle things well, so now - The Situation.
I have four credit cards with $5,000 limits. I am dangerously near the limit on each. The monthly payments are between $160-200 a month (minimum payment, that is).
If I were to close two (or more?) of them, will it be beneficial? This is what I'm wondering, but don't know if it's at all factual:
(1) Does closing a card stop the interest from mounting month to month?
(2) How will it be reported on my credit rating?
(3) Are the CC companies generally flexible in the monthly payment after closing the account? (IE, will I still be paying the $160-200 a month?)
I feel like I'm not making headway on paying these down and I'm cutting spending as much as I can, plus took a roommate to give me a bit more to put towards the cards.
My final question is this: Should I talk to one of those companies that intervenes with credit card companies? Are there any that are non-profit that won't add to my financial woes in the long run?
Can anyone help me out?
Thanks a TON...
-FW
Hi felinewarrior!
I wouldn't recommend closing the cards unless it is a requirement of an arrangement you make with one of the creditors. What I would do though is give each one a call and let them know your situation and see if they will work with you. I know that with the economy the way it is, a lot of banks are more willing to work with you than they were before.
I did this for my mom recently because she was in a similar situation and all the banks had increased her interest rates to 30%. I called Chase and let them know that she was not going to be able to keep up with the payments long-term. They asked a series of questions to determine if there were significant changes than may affect her ability to pay. After explaining everything, they offered to lower her apr to 6% , close her accts, and then give her 5 years to pay them off which reduced her payments by almost 50%,. While this won't be great for her credit in the short run, it will definitely help in the long run since she won't have the missed payments and her balances will be decreasing. I have seen several posts that suggest that you have to have already been late one a payment but this wasn't the case for me. I will say that I went straight to the backdoor number (which wasn't the right one, but the woman was really nice and connected me directly to the right department.) I find that the number on the back of the card isn't very helpful and the CSRs are limited in their abilities.
IMO, I would start by contacting the companies individually and use the consolidation companies as a last resort.
Good luck!! Keep us posted!!
