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I have 4 major credit cards - a Chase Freedom card, a Amazon card from Chase, Capital One, and a TD Bank card. My Chase Freedom card is way over the limit, I haven't used it since July, but they finance charges started to get outrageous. When I went to make a payment online, I screwed up and the check didn't go through, so they assessed the usual fees. I sent out a check as soon as I noticed it, but now the account is past due.
There's no way I can make the minimum payment they're asking for, so at this point I'm seriously considering canceling the card. I just don't see any way around it. I know canceling a card is bad, but I haven't had it that long, probably only a year. I'd rather cancel it and make small payments than worry about trying to make a different minimum each month. My question is, how will it effect my credit in the long run? Chase is my newest card, so it's not like I'm canceling a card with long history. I just feel an immense amount of pressure to start making a dent in the debt and that's where most of it is coming from.
It sounds like your asking the effect of just not paying that bill? After it going to 30 days late, 60, 90, and eventually a charge off it could be serious. Other cards may then recognize your deteriorating credit and reduce your credit line.
If you have the ability to do a balance transfer to one of the other cards to get you below the balance (and therefore regular fees) this might be your best bet.
If you have no available credit to do a balance transfer and can't afford the necessary payment call Chase. They'd rather work with you then get nothing.
I hope it all works out for you.
I'm not asking about not paying the bill at all, of course that would be worse. I'm considering closing the account and using their payment plan. They've offered it to me before, I'd have low monthly payments, no more late fees, no more overlimit fees, and the account would no longer be considered past due. They've been pretty reasonable about it and it seems like the best course of action at this point. I have no room on any of my other cards, because Capital One and TD Bank have such low CL that's I can't transfer this balance to either of those. My other Chase card is high but not over the limit.
If this is your only option you should take it. Be aware though that when you are on a payment plans some creditors may notate this on your credit report and that can have an impact on your score but you have to decide what is more important, getting the card paid off or a temp drop in your score. If you close the account it will stay on your credit reports for at least 10 years.
Having a card over the limit is not only bad for your credit, but its a bad situation that won't get any better until you get that balance back down where it should be. If you really can't make the minimum payment with the extra fees and overlimit balance (which would be ideal), I think the best thing is to take Chase's payment plan and get that debt paid off. If you complete the payment plan successfully, I'd think Chase will be much more amenable to opening a new account for you in the future if you want.
Only caveat is to double-triple check those terms and make sure that they work for you. What will the interest rate be? What will the min. payment be? Now is the time to try to negeotiate on those things with Chase.
Good luck, I think you can be on your way to being unstuck soon!
@iamrayl wrote:If you close the account it will stay on your credit reports for at least 10 years.
A minor point, but a closed trade line, in good standing, will remain on a credit report for up to 10 years (not at least 10 years). Some CA tend to remove trade lines early (7 years or so). There are even some reports on here of TL falling off in a 3 or 4 years--fortunately these seem rare.
Ouch. You are in a tough spot, but I think that SCF is right-- review (thoroughly) the offer and terms from Chase to get the debt paid. If their plan is affordable, and you have no other way to get it paid, without making your overall financial situation worse, then take it.
I also wanted to toss out some other ideas that you've probably already considered (forgive me if you have, please), but just in case...
Of course, none of these things are permanent fixes (unless they let you pay the balance in full, or down enough to afford much more than the minimum payment), but they may give you some breathing room.
Good luck! I hope that you're sailing in calmer financial seas soon!
I'm not asking about not paying the bill at all, of course that would be worse. I'm considering closing the account and using their payment plan. They've offered it to me before, I'd have low monthly payments, no more late fees, no more overlimit fees, and the account would no longer be considered past due. They've been pretty reasonable about it and it seems like the best course of action at this point. I have no room on any of my other cards, because Capital One and TD Bank have such low CL that's I can't transfer this balance to either of those. My other Chase card is high but not over the limit.