Paying off large amount of credit card debt in one go

onedayiwillbestraight

After carrying a huge amount of credit card debt for a number of years and being unable to make any dent in it due to only being able to afford minimum payments I have inherited enough money (30k) to pay all debt bar 3k off in one go. I am keen to do this as soon as possible (ideally in the next few days!) and would welcome any advice re how to do it. The debt is spread over 3 cards. My first question is whether it is ever possible to negotiate a reduced outstanding balance if the result is the debt is cleared in one payment? I am thinking of the 3k that will still be outstanding and wondering if it is feasible to think I will be able to negotiate a reduction so I can clear everything? If I can't would it be best to leave a bit of the 3k on each card or have it all on 1? I have always made the payments albeit it the minimum amount so do not have any issues with the credit card companies. I would welcome any opinions on this along with any pointers re how to actually make the payments? Do I do it over the phone? Do I have to ask for a written final statement for example so I know exactly what I am paying and to avoid further accruals of interest? I will be asking re PPI although I am pretty sure I dont have it. Any tips would be great! Thanks very much.

tiredoflife

I did a similar thing recently.

I mainly had credit cards and a loan

The loan I had to call up and get a settlement figure and paid it off there and then.

My credit cards I paid all of them off online using faster payment. I did mess up my barclaycard one as I paid the full balance off whilst my direct debit was being processed. I think I got a bit over excited and didn't think about things like that! Annoyingly then gave me a returned direct debit fee even though I had paid the full balance and returning my direct debit created a positive balance. I called them and they reversed the £12 fee and credit record not affected.

With regards to the 3k, can you stick it on a 0% card and pay off more each month as your outgoings will be less due to other credit being paid off?

Alexd52

Best to pay off the highest interest cards first. Of the remainder, if you can balance transfer to a 0% card, then do that.
Don't think you will have much joy negotiating a lower balance.

chattychappy

Generally people only get an offer to settle if they've already missed a few payments (and trashed their rating in the process). Until then, the lender has no commercial reason to offer a discount. I helped somebody negotiate a discount recently. A genuine "hard luck" tale - the details don't matter. She was several months behind. The lender (principally HSBC) wouldn't negotiate with her principally because it was too early. They were happy to freeze interest and reduce payments, but were not prepared to write it off. After I went through the peculiar details of the case with them (they assumed I was a debt charity though I made it clear I wasn't) they wrote off 70% in return for 30% now. The 30% was coming from a third party (parents overseas) and was conditional on the 70% being written off. I told the bank that this was probably their best chance of getting anything at all and they agreed.

That is the only personal experience I have of the whole business. You can checkout the debt-free wannabe forum for more negotiation advice, but you will come back to the same points. 1) They won't negotiate since you've been paying on time (presumably), 2) Any honest statement of affairs shows that you can well afford to pay this debt back, or at least keep up with the repayments, 3) The moral/ethical point - you spent the money, so you should pay it back!!

bris

They never negotiate until you are on the verge of bankruptcy and it's already to late. by this time the debt has been sold and your credit file is trashed.


How do you think they make their money? For every 1 person that clears their balance every month there is 100 paying minimum payment. Your, their profits, they don't want it cleared.

downhillfast

Pay off as much as possible leaving anything you can't pay off on your lowest rate card. You can then either wait for your cleared cards to offer you a balance transfer ( depending on which cards you have) or apply for a fresh balance transfer card (depending on your credit history etc)

MallyGirl

If you pay anything less than the full amount owed that will show on your credit history for the next 6 years. Just pay off what you can, close most accounts and drop the limit on the remaining and then you might qualify for a 0% BT in the next few months.

onedayiwillbestraight

very helpful advice thanks. I did think I was grasping at straws re agreeing a settlement amount to be honest but thought it was worth asking. Will call them today. Thanks again all.

agrinnall

bris wrote: »

For every 1 person that clears their balance every month there is 100 paying minimum payment.

Do you have any official figures to back up those proportions? My own experience would suggest it's a lot less than 1:100, most people I know either pay full balance or are trying to clear the balance as quickly as possible.

AndyBSG

agrinnall wrote: »

Do you have any official figures to back up those proportions? My own experience would suggest it's a lot less than 1:100, most people I know either pay full balance or are trying to clear the balance as quickly as possible.

I'm surprised that most people you know actually share their credit card repayment details with you because I don't even share mine with my wife!

I know that certainly when I was younger I was always paying minimum amount so I could live a champagne lifestyle on a paupers wage and so were many of my friends to all appearances, who have all had debt problems as a result.

Certainly later in life I expect most of my friends now are a bit more financially savvy so will be trying to pay off as much as possible each month but I expect when you look at things like earnings, age, etc the number paying minimum amount or in full will vary wildly.

System

You'll probably find that some of the card issuers will offer you 0% offers once you pay most or chunk off.

Use these to stop paying interest of the reduced balance.

MallyGirl wrote: »

If you pay anything less than the full amount owed that will show on your credit history for the next 6 years. Just pay off what you can, close most accounts and drop the limit on the remaining and then you might qualify for a 0% BT in the next few months.