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So my credit has well, gone in the crapper over the last couple of months. Started out by moving and having to set 6000 bucks on fire in about 15 days. Had to let my car payment go 30 days past due. Oh what fun to watch my phone light up with alerts as I saw my scores plummet 40 points over night. Utilization would be considered maxed out. BUT... I've been managing to make my payments on time... and generally more than the minimums.
As a result of the recent score crashes, been getting "pre-approved" for lots of "personal loans"... I bit on one awhile back because I thought it was legit -- that they would give me a loan, pay off my creditors, my accounts would stay open and I would be running through lush green fields with unicorns and leprechans stumpling on the pot of gold at the end of the rainbow.
Then... I actually READ what they were proposing (I think most people in America don't actually read ANYTHING except, perhaps the current social media navel gazing platform du jour). They were going to let my accounts all go delinquent... then they would settle with my creditors for less than the amount owed... and I would be paying them for the privelege to tank my credit score even further than it has already tanked (right now -- between 580 and 599 depending on who you pull). Um, no thanks.
That was back in October and started getting more similar letters -- all with "checks" for 50000 attached made out to me! Wow!
I called one and spoke to the guy... said up front that if he was going to steer me into some sort of debt consolidation plan, he could save both a lot of time and energy. But, of course, I guess he was a glutton for punishment. He just said "I know you said you aren't interested but just hear me out... We partner with a federal program where we can have you out of debt saving you THOUSANDS of dollars in 2 years." Of course, it would mean having to let all my accounts go delinquent. But, he said, that it doesn't matter because I already have delinquencies and collections all over my credit file (other than the car payment from october, my last delinquency was 3 years ago during my divorce. My last collection is due to fall off in the next year. Even my tax liens and foreclosures will be falling off in the next 1-2 years.)
He tried every argument in the book:
I even told him that the costs of the program were just the beginning -- when they settle my debts for less, then I would get hit for 1099s from each and every creditor for the amount of debt that was written off. His response? All I would have to do is file some form stating that I was "insolvant" and I wouldn't have to pay taxes on that. I'm sorry -- I don't think with my income level that the IRS is going to just take my word for it... and I have enough tax issues without opening THAT can of worms.
In the end, he said I knew WAAAAAY more than "9 out of 10 people" he speaks to on a daily basis (I'm guessing that is a fairly low threshold!)... and he hung up on me!
Am I proud of where I'm at right now? No.... and Yes! No because I've dug myself a pretty deep hole. YES because I won't take the "easy" way out and I will continue to slog through this and keep paying my bills and honoring my financial committments... AND preserve what shred of my fico score is left in the process!
I don't have too many creditors that have taken a chance on me... most wrote me off LONG ago. I'm not going to basically step on a grenade and wind up blacklisting me from what few will still take my money.
Sorry -- I just had to get that off my chest. Maybe he is right... maybe I am stupid to just keep slogging away and paying way more in the end than if I just took their "loan" and let them destroy me financially. But I got myself into this mess... I need to get myself out.
Now if you'll excuse me, I have to go work on my budget and my debt reduction plan!
Cheers!
Wow, and he didn't try to sell you any snake oil? Well in my opinion, you are much better off doing it yourself. Goof luck!