Paying off a credit card.

slideshowbob

After many years I've finally pulled my head out of the sand. The Minimum Repayment Calculator tells me it would have taken me more than 100 years to repay, so I've moved back in with my parents and got a plan together to get debt-free in a little under 3 years.

A few years ago when I wasn't managing to make the minimum payments and the interest had been frozen on one of my credit cards that company (Capital One) called me one day and offered that I repay them approx half what I owed and they would call the account settled.

That was quite some time ago, and since then they've unfrozen the interest and I've been paying them a little more than the minimum. My question is are they likely to accept less than the total outstanding to settle the account and if they did would this adversely affect my credit rating, which over the last few years has recovered a little. The basis for the question is that over the years they've had a lot of money out of me in interest payments so it might be reasonable for them to accept less than is owed.

I expect the answer will be 'why would they accept less than is owed, and of course it would damage your credit rating' but it might be worth asking...

Thanks all

penguinwaddles

If you offer them a lesser amount that you will pay all in one go (make sure you state full and final settlement) they are not obliged to accept but it is quite possible that they will and no it will not affect your credit rating. If you still notice it showing on your credit report then just ask them to pass the information to the likes of Experian that the debt has been paid.
As a general rule I would start by offering them 50% and work from there

Jeffers90

Is this only when you have been missing payments etc & they already know you are in trouble? I wouldn't imagine you could just call up after making payments on time & ask for the debt to be halved. What exactly is involved?

slideshowbob

I've got a loan and a few CCs, I ran into financial difficulty some years ago and they froze the interest. One of the CCs was rate-jacked a couple of years ago to 29.9% after my circumstances changed and I was able to afford the minimum payments again.

Now I'm trying to be responsible about it all and worked out who I owe what and what the interest rates are it seems to make sense to clear the highest interest rate debt quickest. I'm able to pay that one off, but just wondered if there was any chance they would accept less than the total outstanding to settle the debt.

Hope that is enough information, thanks for the replies

INT1

Well done for getting your plan together. Take a loan out if you can to consolidate all in to one and then close down the cards and keep just one open with a small credit limit.

CannyJock

Sometimes it's possible to shuffle the debts around in order to get the overall APR down. While you're trying to sort things out, might be worth looking at transferring balances from your highest APR cards to your lower APR cards?

Depending on the cards you have, some cards are known to give existing customers LOB offers.

If you want to post back and list:
cards / balance / credit limit / APR / details of any current offers

Details of the settlement balance on the loan and the APR on the loan would be useful too.

Might be something can be added.

EDIT: Have you obtained a copy of your credit report to see what sort of shape it's in?

Any

slideshowbob wrote: »

I've got a loan and a few CCs, I ran into financial difficulty some years ago and they froze the interest. One of the CCs was rate-jacked a couple of years ago to 29.9% after my circumstances changed and I was able to afford the minimum payments again.

Now I'm trying to be responsible about it all and worked out who I owe what and what the interest rates are it seems to make sense to clear the highest interest rate debt quickest. I'm able to pay that one off, but just wondered if there was any chance they would accept less than the total outstanding to settle the debt.

Hope that is enough information, thanks for the replies

Clearly - unless you are in serious financial difficulty and missing payments etc - NO.
And that would screw your credit rating. So I wouldn't recommend it.

Apply for copy of your credit report and if possible try to do what CannyJock suggested.

slideshowbob

Thanks for all your replies. I won't be able to do any shuffling about, two of the 3 credit cards were cancelled when the interest was frozen on the basis that if I couldn't afford the minimums they just wanted the balances paid off, and the 3rd card is on 0% until April, but is close to full (it was this that prompted me to wake up and sort my self out).

For the record we're looking at

29.9% Marbles CC ~4.5k
20% Capital One ~1.8k
19.9% Cahoot loan ~10.5k
0% (until April then 20%) Halifax CC ~5.5k

The Halifax CC I took out a year or so ago when I discovered my credit rating had improved considerably with the intention of using it for small amounts regularly and keeping it paid off, but as you can see that didn't happen.

My family have offered to lend me enough to pay the first two which will save me a fortune in interest, I don't like owing money to family so I won't be tempted to pay them the minimum like I have been.

Must say having had a proper read around the forums on this site the last week or so it really is very inspiring to see how people are doing and to see how much support and encouragement is about.

Thanks to you all!

CannyJock

Pity the Halifax card is maxed.

Family loan will definitely save in interest, if they're happy with your repayment plan then that's the way to go.

What's your plan for April when the Halifax card promotion ends?

If you've not already, check your credit report to see if there's been any lasting damage from the past or whether the cards are currently reporting a long list of 0's.

slideshowbob

Going to be balancing paying off the family against the other debts, the last time I looked up my credit report it was, from memory, good enough to make me think I could get a new CC, which I did. I don't believe I've had any missed payments since then, but will probably look to move to another 0% CC if I can find one that will have me - I understand that the more applications you make the worse things look on your report so I'll be trying to gauge who's likely to accept me in a couple of months.

I'm also looking to a second job that should certainly help out too.

davetrousers

aldo wrote: »

Well done for getting your plan together. Take a loan out if you can to consolidate all in to one and then close down the cards and keep just one open with a small credit limit.

You've seen too many adverts I think!

If you're in debt, seldom is it a good idea to get another loan.