Here’s a paraphrased version:
My credit card has an $800 minimum balance, and I have an overdue amount of $824. I know I maxed it out and shouldn’t have, but I’m a broke college student without family support. At one point, I didn’t even have a car, so I had to do what I could to get around, buy food, and cover basic needs. I’ve been trying to pay off my card since I maxed it out, but the interest keeps pushing it back to $800 or more. I want to pay it off, but with all my current bills, I can only manage $20 a month. That feels pointless since the $25 interest charge keeps showing up. Now, they want $65 by tomorrow as my new monthly payment, which is a lot for me. What should I do? Should I stop paying and let it go to collections? I don’t want to default, but I also don’t want to stay in this financial hole.
Let me know if you need any adjustments!
Give them a call and request that they reduce your interest rate on account of your financial difficulties so that the money you owe is the amount you actually owe. This is something that most applications can perform. America’s Consumer Credit Counseling (ACCC) will help you negotiate a reduced interest rate with credit card providers if you don’t feel comfortable doing it yourself. Since they are a nonprofit, so it’s legitimate, but there is a little monthly charge that doesn’t seem like you would have at this time. For that reason, I advise contacting them and asking to get the interest lowered yourself. The ACCC also advises you to attempt this, and it’s definitely the wisest thing to do initially.
You actively use this credit card to make purchases of necessities. 800 isn’t much in the realm of debt, so you should definitely look at government programs in addition to talking with your bank.
This sounds insulting. Perhaps I’m just being overly sensitive… Haha It’s a lot for me personally, and if it wasn’t obvious before, that’s my main argument. Which government initiatives would you advise me to research? You appear to know a lot about them.
Are you really past due? Typically, they begin to provide hardship programs after your payment is 60 or 90 days past due. Years have passed since I completed one, but typically what happens is that the card is closed, the interest rate is lowered to a very low amount, and you are then placed on a monthly payment schedule. Asking over the phone wouldn’t be harmful.
I know how difficult it can be to manage debt, particularly when you’re struggling to make ends meet and juggling payments. My family and I were in a similar situation where we had to make difficult decisions due to excessive medical costs. Speak with your credit card company and let them know what’s going on.
They may reduce your minimum payment or provide a short-term payment plan. If you have to go through collections, that could damage your credit even more. While you work things out, you can find some relief by attempting to negotiate with your credit card issuer.
I agree with the non-profit debt organizations, but if you bank with a credit union, they may provide a cheaper interest rate and have a program to assist with credit card repayment. They’re frequently referred to as fresh start loans or something similar. Worth giving them a try.
Make every effort not to default. It takes a long time for late payments to be removed from your credit history seven years. It’s awful, I promise. The credit card company undoubtedly wants to cooperate with you rather than lose out and handle collection. Make a call and offer to help
You are paying the minimum monthly payment, which consists almost entirely of interest, which is why you keep making payments but the overall amount does not go down. Keep it out of the collections. For ten years, you don’t want to pay more than $65 a month and have a negative credit mark. Eliminate unnecessary expenses and allocate the maximum amount of money towards your credit card debt. Make a larger monthly payment than the minimum to ensure that you are covering more than simply interest.
I would cooperate with them and pay it. If you fail to pay, you may be sued in a civil court. It may also make it more difficult for you to secure housing and damage your credit. It won’t have as much of an effect if you can cooperate with them and settle this loan.