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Debt Management Plan - Impact to Getting Company Travel Card

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Anonymous
Not applicable

Debt Management Plan - Impact to Getting Company Travel Card

Hello,

 

Will being on a debt management plan (DMP) impact my ability to get travel card through my company/employer? If so, should I cancel my DMP and withdraw from my 401K to pay off some of my credit card to increase my credit in order to get a company travel card? 

 

Thank you.

Message 1 of 5
4 REPLIES 4
FireMedic1
Community Leader
Mega Contributor

Re: Debt Management Plan - Impact to Getting Company Travel Card


@Anonymous wrote:

Hello,

 

Will being on a debt management plan (DMP) impact my ability to get travel card through my company/employer? If so, should I cancel my DMP and withdraw from my 401K to pay off some of my credit card to increase my credit in order to get a company travel card? 

 

Thank you.


Thats up to you. I dont think anyone on this forum would advise to take the penalty hit for withdrawing from your 401k plan. Or touch your retirement $ to pay off debt. And if its that bad. The best debt mgt program is here on the forums. You probably wouldnt get approved for a travel card if your in debt over your head. Without knowing any data points. Pay down what you owe to put yourself in a better position to get approved. Leave your 401k plan alone. Fix the present without taking from your future.


Message 2 of 5
Anonymous
Not applicable

Re: Debt Management Plan - Impact to Getting Company Travel Card

This is not a simple answer:

 

Where I work it is mandatory to put all reimbursable expenses on your corporate card so my advice would depened on specifics about your role and company.

 

For example what is the policy on the expense reimbursement - must it be on the corporate card or is that optional?

Do you travel for work and expect signficant expenses?  For example when I go to a conference the room, airfaire, conference could add up to over $3,000.

If allowed do you have sufficient free credit on your cards to pay for travel and wait to be reimbursed?

If you are expected to have a corporate card will it look bad on you if you are declined or will there be a stupid cap?  I have heard of Macy's employees getting a $50 limit so they had to pre-pay to use the card to get their corporate discount.

 

When you say withdraw from your 401K do you mean a loan or a hardship withdrawal?  The later has penalties the former you miss the opportunity for your 401K to grow.

 

I would avoid a 401K hardship withdrawal (which is only allowed for certain things anyway) but a loan may or may not make sense?

 

Now before anyone has a cow think of it like this.  Mathematically speaking paying off your highest interest rate cards first may make the most sense.  If so then why do so many recommend the snowball method instead knocking out $35+ minimum payments for each account?

 

While not the most financially sound thing to do depending on your age and how close to retirement you are a 401K loan to pay off debt can greatly improve your scores and should not be automatically dismissed.

 

Also being on a Debt Management Plan can greatly impact your credit scores and you may not get approved for anything new including a corporate card while that is reporting on your credit.  

 

YMMV.

 

 

 

 

 

Message 3 of 5
Anonymous
Not applicable

Re: Debt Management Plan - Impact to Getting Company Travel Card

Thanks for your responses! The good thing is I have a grasp on my budget and have been able to trim expenses a bit (thanks to a worksheet provided by the DMP counselor). My salary is more than $100,000 and I have been making my payments for $40k in debt. What is killing me are the interest rates. I have 30 more years to work and believe I can rebuild my retirement. Maybe I can take $15K out (with penalties and such, it should leave me around $9Kish). I can use that $9K to lower my debt to credit ratio, hopefully enough to improve my credit score from the low 600s to high 600s. The DMP has withdrawn my first payment, but the negotiation with the creditors are still pending, which means a payment haven't been made to them ye. What do you think?

Message 4 of 5
Anonymous
Not applicable

Re: Debt Management Plan - Impact to Getting Company Travel Card

Are you looking to apply for a credit card for your company expenses or are you asking if your credit will impact you getting a credit card from your company? I have a company issued CC that I use for expenses and travel, my personal credit was never reviewed by the company or credit card company before issuing it to me.

 

 

 

Message 5 of 5
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