If your debt is pretty high

If your debt is pretty high you may be able to close the cards and then negotiate a payoff schedule with a better interest rate.

My own story is:

$53,000 in debt by an irresponsible and untrustworthy spouse (since divorced)

I closed Mastercard, Citicards,Discover, JCPenney and Macy’s and negotiated a positive cash flow in their direction. I do not use any credit cards I instead rely on an ATM Visa and once in a while use the credit facet of the card as opposed to the Debit facet (less bank charges believe it or not!)

Here is the result:

  • $31,000 on Mastercard 550/month at %3.25 for 6 years
  • $8500 on Citicards 350/month at %9.9 for 3 years
  • $13,000 on Discover card at %18 forever ( I had the most problems with this card)
  • $3000 on JCPenney $65/month at 0%
  • $250 on Macy’s pd in two payments

In 21 months here is where I am at:

  • Macy’s and JCPenney are paid off because I aggressively paid them more than I had to.
  • $23500 owed on Mastercard at the same rate.
  • $2450 owed on Citicards at 21% with an end in sight
  • $11670 owed on Discover at 9.9%

With Citicards I complained that I wasn’t seeing the end soon enough. They offered me a ‘Half pay program” when I had 3600 owed. Here is the deal:

I pay 600 they pay 600 so my debt lowered by 1200 in one month.

That kind of knocked out a year of crappy interest payments so I went after the remaining debt aggressively. I’ll beat them down to nothing in a year.

Discover is its own battle and I wouldn’t recommend this card to anyone if they carry a balance.

I was in a payment plan I didn’t thoroughly understand at $394 per month at 18%. They also got over 800 from me to be in that plan when I was down and out in the beginning of Oct 2006. That money was ‘penalties that went nowhere toward the payment of the debt.PUNISHING!”

For 1 year Nov 2006 to Nov 2007 I paid faithfully from an agreed account.

It was good for one year. In December of 2007, they didn’t withdraw the money I placed there and instead hit me for 24% and a penalty.

I was outraged. I was told that if I was going to pay them the rate was going to 24% and I owed them a penalty.

I told them they weren’t getting paid.(I wasn’t nice I actually told them to go F themselves) I was going to pay everyone else and not them. So they said I didn’t understand credit card companies.

I said sure I do! I have your money and you don’t!

So 6 months later they made a deal at 9.9%. My ex spouse has to pay this card in my divorce agreement so I am ok with that.

Here’s a tip:

Don’t divulge a master bank account to a credit card company if they pull shady stuff like this.

Instead set up a temporary account with another bank.

In case you want to dig in they can seize your account funds if you have given them an account number.

Keep the minimum necessary to pay them in the temp account.

Good luck and keep asking for someone until they deal.

I filed a charge with the FTC on Discover because of how I was treated by them.

Keep this in mind 30% of the USA is in very real financial trouble and these guys are not getting paid. Foreclosures and bankruptcy are causing a lot of over extended banks,mortgage and credit card companies to go through layoffs and failures. The guy on the other end of the phone is nervous about his job too so they are more willing to make a deal to increase the bottom line. Be strong and if they offer you a deal try to get better than the offer. I hung up many times before I got Discover in the corner. They called me over 60 times. Then mailed me a deal!