Credit Cards

[Bails77]

Has anyone every done a payment plan for example where they lower your  interest rate and you can pay off the balance with in 5 years?

I called my creditors about this option and they say they will close my account but on my Credit Report it wil say  "closed" making on time payments..

I know that closing out CCs will lower my score...but does anyone know for how long?

and will it affect me as long as settling for a lower amount?

Just trying to figure out the best option to getting out of debt.

Thanks in advance!

[llecs]

I can't speak to the payment plans, but here's some good info on the effects of closing CCs:

Ooooops...posted wrong link. Yep, what fender said.

Message Edited by llecs on 01-28-2009 03:11 PM

[fender]

Settling for a lower amount will certainly hurt you.  Here is another good link for closing accounts.

http://ficoforums.myfico.com/fico/board/message?board.id=creditcard&thread.id=117125

[FretlessMayhem]

Hi Bails, welcome to the forums!

Closing your card will have an adverse effect on your scores more than likely. I guess the decision is a matter of personal preference. If you're going to end up saving thousands of dollars by closing it, that would be the route I would go. 

[Bails77]

Thanks for the welcome! and  Thank you all for responding!

The thing is...they say if i do this payment plan they will close my account..i dont have a choice

I guess overall its better than settlement or chargeoff right?

I was just curious as to how long it affects your score..because the way i see it..settling would even save me more and if its gonna have the same effect...well i might as well do that..

I really dont feel right doing that but just trying to figure things out.

[FretlessMayhem]

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Bails77 wrote:

Thanks for the welcome! and  Thank you all for responding!

The thing is...they say if i do this payment plan they will close my account..i dont have a choice

I guess overall its better than settlement or chargeoff right?

I was just curious as to how long it affects your score..because the way i see it..settling would even save me more and if its gonna have the same effect...well i might as well do that..

I really dont feel right doing that but just trying to figure things out.

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It's definitely better than a charge off. You'll eventually get back the points you lose with util as you pay down the balance. 

Without a lucky GW letter post chargeoff, I see the payment plan as optimal. 

[oracles]

getting yourself out of debt is much more important than keep a high fico score.

Scores can always go back up.

Financial freedom equals peace of mind

[Bails77]

Very true thank you all again!