Keep or Drop

[Anonymous]

Long story short. I have a FICO of 695 and  I have a NUMBER of credit cards with high limits (a couple with a$10,000.00 limit). Oh, I almost forgot to tell you. Most are maxed out. I have always paid above all of my minimum payments on all cards. My average interest rates were between 3.99% and 12%. I have noticed over the past  months and currently that almost all of the companies are sending new "terms" where my interest rates will increase anywhere from 18% to 27.99%! Now I am getting concerned due to the ENORMOUS payments required. I am concerned that I will now be another statistic and not be able to pay these amounts ( I already know I will not). The first few accounts/cards I did not close and allowed the interest rates to increase because I felt that if I closed the cards it would lower my FICO score ( I am shooting for the 700's). Now I have the option on the two $10,000.00 credit cards to accept the new interest rates in the high 20's  or close the accounts and keep a lower APR.  I am too proud to file bankruptcy and I really don't want to destroy my FICO score. Do you have any suggestions guys????

[Anonymous]

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 Do you have any suggestions guys????

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We need more info/

Income? married? clear money each month.

[smallfry]

No way to save your score unless you pay off the debt or move it to a low rate BT. Slim and none.

[Anonymous]

Lets parse this:

You have a bunch of cards that are near the Max some with High limits and your interest rate is being raised on many of them, that will cause a cascade effect in raising your minimum payments past an amount you feel comfortable with and causing interest to accrue at a huge rate.

Welcome to 2009.

First of all your high usage has pretty much tanked your FICO anyway.

And you are in a bad situation, you need to quit worrying about your FICO since that won't get you out of debt, its trashed anyway, and.....you really have no reason to be trying to secure more credit anyway.

Options:

1- BK

2- Cut and run default on som eif not all

3 Come to a payment plan with all that will involve a mixture of reducing your rates/payments and closing your accounts.

Advice:

1-Contact Debtors Anonymous. You may not have a problem but they do offer many solutions/help on their website and help you take  ahard look at your spending. Then start looking for help with DAVE RAMSEY

2- make a budget see how much you have coming in to going out.

3 Are you continuing to be maxed on your cards due to non necessary spending (paying a 200 payment then going out and charging dinner out with you and friends) or are you shifting essential payments (paying a 200 payment and then using the new avaialble credit to pay your electric bill)

If you do not make enough money to pay your minimum obligations its BK or close accounts and negotiate.

4- See where you can cut corners if you have not already started to BUDGET and SAVE you probably could come up with $250-$500 a month in money by simply taking a hard look at what you throw money away on.

Honestly you need to close all the account to keep the APRs low and PAY THEM OFF.

You are a statistic right now, but you can stop yourself from being a really bad statistic

PS You need to accept the fact that the world of credit is closed for you for a period of 2-5 years. Accept that and make the changes that you need,

Message Edited by usmc58555 on 06-26-2009 01:46 PM

[Anonymous]

Bankruptcy is always a dead last resort. Think this over very carefully before making any decisions.

King

[haulingthescoreup]

Maxed-out cards are score-killers, too.

Any option to pick up a part-time job? I did, and it's like having free money. Plus you're too busy and tired to spend.

Stop using the cards now, if you haven't already. Once you post back with some of the info that others mentioned (how much cash you have available and so forth), we can try to give you some ideas about how to attack your bills.

You are probably going to have to go back to your lenders and ask them to reduce the APR's so that you can repay them.

Look into a DMP (Debt Management Program.) This isn't a debt negotiation program, where they tell you to stop paying creditors, or they take your money and don't pass it on, in hopes of breaking the creditors and making them accept 20 cents on the dollar or something. Not only are these outfits grossly unethical IMO, they will also take a lot of your money and give you destroyed credit in return. We don't even discuss them here on the forums, other than to tell people to run.

We have had several members who successfully went through DMP's, honored their debts, and are now regaining their credit.

Click on the link in my siggy called FTC Website: Knee Deep in Debt. There are more ideas there.

[marty56]

I sent you a PM on the DMP program I used.  If you can afford to make the DMP payment, that would be your best option other than an increase in your earnings.

Dave Ramsey's debt snowball approach is also a good option and is free and because there is no time limit on how long you use it may be a better choice if you cant afford thew DMP program which has a 5 year limit to be PIF.

Making a budget is key to getting out of debt.  I use an Excel spreadsheet but notepad or any other text file editor will do.

Regardless of what path you choose, you must have an organized approach to getting out of debt, otherwise the plan wont work.

Message Edited by marty56 on 06-27-2009 03:44 PM

[cobaltnv]

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@Anonymous wrote:
Long story short. I have a FICO of 695 and  I have a NUMBER of credit cards with high limits (a couple with a$10,000.00 limit). Oh, I almost forgot to tell you. Most are maxed out. I have always paid above all of my minimum payments on all cards. My average interest rates were between 3.99% and 12%. I have noticed over the past  months and currently that almost all of the companies are sending new "terms" where my interest rates will increase anywhere from 18% to 27.99%! Now I am getting concerned due to the ENORMOUS payments required. I am concerned that I will now be another statistic and not be able to pay these amounts ( I already know I will not). The first few accounts/cards I did not close and allowed the interest rates to increase because I felt that if I closed the cards it would lower my FICO score ( I am shooting for the 700's). Now I have the option on the two $10,000.00 credit cards to accept the new interest rates in the high 20's  or close the accounts and keep a lower APR.  I am too proud to file bankruptcy and I really don't want to destroy my FICO score. Do you have any suggestions guys????

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 If you will not be able to afford the new payments then you need to take your option to close the two $10k accounts to leave them at the lower APR.