Clearing Credit Card Debt

carl1983

I currently have a Barclaycard amounting to £5750 and pay approx £150 p/m min payment. I wish to clear this ideally with a lump sum payment. I remember seeing a piece from ML about discussing this with the company and offering 30%-50% of current debt. Has anyone had a successful dealings with CC companies? Also I was considering worse case scenario requesting a stop on the interest with a 12mth payment plan to clear? Any suggestions.

Mags_cat

It's unlikely they'll accept less than full payment unless you have already had trouble paying, have defaulted and the debt's been passed to a Debt Collection Agency (DCA) - who tend to buy debts at so many pence to the pound and are therefore sometimes open to offers. (In these circumstances get the offer IN WRITING and make sure it specifies FULL + FINAL settlement unless you want the debt being sold on again and to be hounded by different DCAs..)

Once you get to that stage, of course, you've already gone a long way to ruining your credit rating for an extended period of time - so you shouldn't just stop paying, default and make a F+F offer unless you're comfortable having no access to mainstream credit for a good few years afterwards.

Asking them to freeze interest *may* work - but it will also damage your credit file.

Tixy

Hi Carl
Usually a company will only accept a reduced full & final settlement if you are already in arrears on the account or have a default registered against your account. In those instances they may well accept a reduced settlement figure. Usually the really low settlements are achieveable if the debt has been sold on to a third party debt collector. If you are going for such a settlement it needs to be in writing before you pay that it is in full & final settlement (so they don't try chasing for the remainder)

If you are struggling to meet your monthly commitments then your credit card company may be willing to freeze interest for a while, but they'll probably need to be convinced you cannot afford the current payments /want details of your income & expenditure etc and its also likely that such an arrangement will be marked on your credit files.

Stalkdog

This is a question that gets asked very regularly, but I'm sure Dave101 could have put it a little more diplomatically!

The simple answer is that you've built up the debt, so you have to pay it off... simples. As has been mentioned, Barclaycard would only consider a full and final settlement if you were heavily in arrears. Similarly, they're not realistically going to freeze interest for 12 months out of the goodness of their hearts, unless you're able to prove that you can't meet the existing payments.

How's your credit rating? Are you able to get an interest fee balance transfer deal to another card? Failing that, your best bet is to post a Statement of Affairs (SOA) over at the Debt Free Wannabees, who will be great in showing where you can save money to accelerate the repayment process. The quicker you pay it off... the less interest you'll pay!

Good luck