Is it possible to cancel a credit card even while there is money left on it? After closing it, my friend who had claimed hardship or something else was given a payment schedule.
To what extent would that damage my credit?
I’m struggling to make ends meet and am now unable to obtain a consolidation loan.
Yes, it will damage your credit. The credit line will close, but the debt will remain. This will negatively impact your credit score by decreasing your debt to open credit ratio.
Even if you can’t pay off the obligation right away, you should still do it and accept the damage to your credit. It is preferable to temporarily lower your credit score than to continue paying 30% interest while doing nothing.
Right now, I’d prefer to take the loss. Hopefully, it won’t be too severe because I have other credit cards with no balance and excellent status.
When you reduce the total amount of debt, it will rise even if it falls significantly. If the debt is substantial, I would strongly advise canceling the credit card and arranging a payment schedule.
Yes, you may, although the terms will change based on the creditor (I’m not sure if everyone offers it).
For some of my cards, I’m in a debt management program; for others, I negotiated a lower payment. My credit counseling firm worked with my creditors to negotiate terms and put me on a set payment plan through the DMP. The cards are now all closed.
I was able to secure a better rate by negotiating for myself on my two Citi cards. I will never be able to reopen the cards, however there is a 60-month fixed payment plan with 0% interest.
How did you personally negotiate them? Have you just given a call? Among them is one from Citibank.
Indeed. I informed them that I was going through financial difficulties and could no longer make the minimum payments when they had to move me a few times. After asking me a few questions (did your income go down, did your spending go up, etc.), they presented me with a few options.
Out of all the credit card companies I contacted, only Citi provided a more favorable arrangement than the one my DMP business had arranged.
Even if you close it, the money is still your debt. It’s not a wise decision because a credit line will be closed. This account will count against the duration of your credit history if you have held it for a long time. Consider your alternatives.
I just completed this with my Hawaiian Airlines and JetBlue Barclay cards. I was able to electronically submit the request, and it was approved in a day or two. My minimum payments were lowered, my interest rate was cut to 5.79%, and my cards have been closed.