Credit Card balances

Touchdown49

Hi

I was hoping for a bit of advice from experts.

I have had three credit cards for a few years now and all are up to the limit, overall about £23k. During a recent re-location with work, I have now sold the house and am looking for a new one, but have money in the bank for a deposit. The problem is, with this level of credit card balance I will struggle to get a mortgage, but to pay off all 3 credit cards I will have less than 10% deposit. Is it feesable to phone up the credit cards and get the balances reduced if I say I will pay them off in full or is this a non-starter ? I am also considering the companies who say that your credit card debt could be paid off if taken out before April 2007. Even if I get one paid off, my 10% deposit should be fine. HELP !

Peeky

You will destroy all chances of a mortgage by using such a company (you can do this for free yourself) or asking for a settlement on the cards you have. It will show you cant make long term payments to credit agreements.

I would pay off as much as you can but making sure you have a healthy deposit too.

Someone will be along to give you the technical stuff

Touchdown49

Why would my chance of a mortgage be ruined ? I can see that if I appied to a debt company to write the debt off then this would show on my credit rating, but if I settled with the credit card company and paid off the babalce then this would show as satisfied on my rating. I am renting a property at the moment but am desparate to get back on the property ladder before prices go back up.

ILW

Touchdown49 wrote: »

Why would my chance of a mortgage be ruined ? I can see that if I appied to a debt company to write the debt off then this would show on my credit rating, but if I settled with the credit card company and paid off the babalce then this would show as satisfied on my rating. I am renting a property at the moment but am desparate to get back on the property ladder before prices go back up.

These companies do not offer to "pay off" credit card balances. At best they try to make the loan unenforcable. This is totally different, and could very well ruin you chances of getting a mortgage in the future.

Peeky

There is a difference between settling in full and settling with part payment. If it were the same wouldn't we all just offer a lump sum to reduce debt?

Peeky

Your 2 posts are conflicting. First you state "balances reduced if I say I will pay them off in full " then state "I settled with the credit card company and paid off the babalce "

Now i'm confused!

Touchdown49

But if part of it gets paid off I am in a better position or does it not work like that ? I thought that the companies negotiated a settlement with the credit card companies, obviously I am mis-informed. How would this show up on my credit rating ?

Touchdown49

Sorry, what I mean is that if I contact the credit card company and agree a reduced balance with the agreement that I pay that oiff in full, meaning I would have a lower amount to pay off to settle the account. I need to pay them off anyway so rather than just paying off what I owe I thought I could contact them and negotiate. Wouldnt they rather have a balance paid off in full than a higher amount being there month after month with only the minumum payment being paid by myself ?

Peeky

The company's see if the debt is enforcable by law, and if not you pay nothing back. Your credit file however will be left in ruins by the lenders as the money is still owed so your file will show that.

The cowboy companies that offer this service for a fee when it is actually free will probably neglect to tell you the damage it does.

ILW

Touchdown49 wrote: »

Sorry, what I mean is that if I contact the credit card company and agree a reduced balance with the agreement that I pay that oiff in full, meaning I would have a lower amount to pay off to settle the account. I need to pay them off anyway so rather than just paying off what I owe I thought I could contact them and negotiate. Wouldnt they rather have a balance paid off in full than a higher amount being there month after month with only the minumum payment being paid by myself ?

Unless the CC companies think they are not going to get paid at all (bankruptcy etc) they would much rather you keep paying minimum payment and paying maximum interest. Any partial settlement will show up and will virtually guarantee no mortgage for years.