Working out a payment plan

Anonymous · ‎02-08-2010

I have a credit card which has a balance of 15,000 and an interest rate of 25.5%. I would like to have them close the account; stop the 25.5% interest accrual and then make monthly payments of $100 a month until it's paid off. I'm wondering if they would accept this type of arrangement, and how would this affect my FICO score. In addition I'm wondering what's the best way to contact them by phone or letter?

Mark

DI · ‎02-08-2010

@Anonymous wrote:
I have a credit card which has a balance of 15,000 and an interest rate of 25.5%. I would like to have them close the account; stop the 25.5% interest accrual and then make monthly payments of $100 a month until it's paid off. I'm wondering if they would accept this type of arrangement, and how would this affect my FICO score. In addition I'm wondering what's the best way to contact them by phone or letter?
Mark

Welcome to the forums? Who is the creditor?

marty56 · ‎02-08-2010

Welcom to th forum. A DMP proram would reduce the interest but you won't get a $100 monthly payment since the longest you can be in a DMP is 5 years. Some CCCs offer a "mini" DMP program but I also don't think they will extend the payments out far enough to only make $100 payments.

As long as you don't settle the debt for less than you owe, your FICO score should not be effected, provided that you don't have any other CC debt. Worst case your sore would drop because of % util increase due to closed accounts CL not being factored into your score but that will only last until you PIF the other balances.

If the CCC offers you a repayment plan that doesn't settle for less than is owed, they may have a provision that you don't apply for any new credit until the account is PIF and that would be certianly true for a DMP and a BofA plan.

Message Edited by marty56 on 02-09-2010 09:42 AM

1/25/2021: FICO 850 EQ 848 TU 847 EX

DI · ‎02-08-2010

I don't think the OP want to use a DMP program. That will destroy their FICO score. Good advice cannot be given without knowing who the creditor is. Some creditors will work with consumers and some won't. If the creditor is Discover, the OP has a better shot working out a deal if their willing to fork out $500 monthly. Discover will reduced the APR and close the account.

marty56 · ‎02-08-2010

@DI wrote:
I don't think the OP want to use a DMP program. That will destroy their FICO score.

A DMP program won't destory your FICO score. A debt settlement program will.

1/25/2021: FICO 850 EQ 848 TU 847 EX

laz98 · ‎02-08-2010

@marty56 wrote:
@DI wrote:
I don't think the OP want to use a DMP program. That will destroy their FICO score.
A DMP program won't destory your FICO score. A debt settlement program will.

ditto. i also think that $100 will probably not be acceptable to the creditor.

Anonymous · ‎02-09-2010

Okay I got to tell you some facts, fact is if that is all you can pay your not going to get anywhere you will never get out of debt, you balance will never go down.. If you cannot pay at least a thousand a month you won't ever do nothing but pay interest..

okay here are some facts you need to learn.

Your debt is $15,000.00 rate is 25.5%

Every year you are paying at least $3825.00 in interest, So at least every month that balance is costing you $318.75.

If you only pay $1,200.00 a year you are adding $2625.00 to the balance in interest alone, not include late fees, or not paying the minimum.

You will never get anywhere with the way you are going you really need to find a better rate, loan, or bk or something..

even paying $1000.00 a month is still only paying like $650 off the balance.. and a year your paying $12,000.00 minus interest so your paying $8175.00 It would take you about two years to do this at this rate.. but I doubt you can do this..

did they recently rate jack you, or was this always your rate? If you have decent credit maybe you can get a personal loan or something which might be able to save you at least 10%-15% interest which could save you a lot.

Anonymous · ‎02-09-2010

Even if they close your account that doesn't change anything they can still charge you interest until it's paid in full.

Anonymous · ‎02-09-2010

ryan1918 wrote:
Even if they close your account that doesn't change anything they can still charge you interest until it's paid in full.

Actually, Ryan, the OP is specifically asking about reduced interest repayment plans that MANY lenders offer when the borrower is or is close to trouble. These programs usually require the card to be closed. The borrower gets a greatly reduced interest rate, and an exit plan that will result in the debt getting paid within a prescribed amount of time.

Anonymous · ‎02-09-2010

mark15 wrote:
I have a credit card which has a balance of 15,000 and an interest rate of 25.5%. I would like to have them close the account; stop the 25.5% interest accrual and then make monthly payments of $100 a month until it's paid off. I'm wondering if they would accept this type of arrangement, and how would this affect my FICO score. In addition I'm wondering what's the best way to contact them by phone or letter?
Mark

Hi Mark! Welcome aboard!

Ugh... $15k at 25.5% is painful. Some of our other members have already asked this-- who is the lender in this case? Have you already contacted the lender about a hardship program? If so, what terms did they offer?

A DMP has also been mentioned, and is something that you might want to give some real consideration to. Another thing I wanted to ask is if there's any chance of your increasing your income (2nd job), reducing your other living expenses, and/or selling or returning things to reduce that balance? Yet another possibility to give some consideration to is a consolidation loan, if you're in a position to avoid running up the debt on your CC again. You don't want to end up with a loan to pay back, and another $15k balance at 25.5%. But, if running up the balance again is not going to happen under any circumstance, you might try talking to a credit union to move this debt to a low interest installment loan.