Dear Bob,
I was 2 days late on my credit card bill. My interest rate went from 3% to 24%. That means my monthly payment went from $30 to $175. I all ready contacted the credit card company and they are not willing to do anything, they said after 45 days maybe. I am have been disabled for the past 2 years, on a work related injury, and we are on a strict budget, yet they said that they have to follow policy.
I am unable to make the payments. I have contacted a company to help but they said that I should stop payment on all my credit cards. I am current on all to this date, but for the previous mentioned, we cannot make the payment. What course of action should I take since they are not willing to work with us? We have been current on the bill since 2005 and this is the first time that the payment went out late.
What a potential disaster. This is a great email with a good ending. However, it could have been a disaster. First, anytime you go to one of these credit solutions companies, they are going to tell you to go ahead and wreck your credit. This is some of the most irresponsible advice given to this listener from this company.
His credit was good. He was just late on a payment. Had he followed their advice, he would have done 7 ½ years of damage and been dealing with debt collectors for a long time.
The key in any situation like this one is to stay current with the payment regardless of the interest rate. If at any point you default, the consequences are much worse. It always makes sense to do whatever you have to do to keep paying and look for alternatives.
Fortunately, his alternative was to go to http://www.penfed.org/ where he was able to transfer the balance to a 5.9% for life credit card. That quickly solved his problem.
Remember, a good credit score gives you all of the options in the world.
Copyright © 2008 Prudent Money and Bob Brooks. All rights reserved.
