I tried to start my own business this year and now I owe all most 50K on credit card payments, my credit score is around 525 with all my credit cards cut off. The good news is that I have got full time job that pays 96K and I want to start paying back the money I owe
Should I use a debt counselling company so they can negotiate a low interst rate (I am at 27% now) or should i call the credit card companies and work it out ?
Everyone's situation is different. I did one of those and it was one of the biggest mistakes I ever made. Others have great success.
Why is it a biggest mistake, how would you do it different, talk to the credit card companies direct ?
I only owe 2 credit card companies so I can talk to them direct
As soon as I did my debt counseling, every creditor I had closed all my accounts and I spiraled downward and didn't recover. They closed my accounts, jacked my interest rates as high as they possibly could and trashed my CRs. Yes, I would definitely do the work myself.
I had the opposite experience (although we were required to close the cards per the member agreement). Our interest rates dropped dramatically, lates stopped reporting, and we were able to get it under control and paid off. A few cards refused to participate or even work with us, but most did.
I did some research on debt consolidation several years ago when I felt things were a little out of control. Turns out that the debt consolidation group that got my information started pursuing me just as hard and talking to me just as rudely as my creditors. This was a major turn off and certainly didn't feel like "relief".
My research (geared towards my specific situation) yielded more negatives then positives therefore I decided to do the legwork myself.
Doing the work/communicating/negotiating on my own allowed me to become more intimately knowledgeable about my credit standing, its strengths and weaknesses.
I think there are muliple resources on the internet nowadays. many more then when I was trying to get a handle on things.
As a fellow business owner, I stand by my approach.