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Resolving a credit card debt
cj iwakura
The Rhythm RegentBears The Name FreedomRegistered User regular
The Rhythm RegentBears The Name FreedomRegistered User regular
This problem's gone nowhere over the past few months, so I figure some outside assistance couldn't hurt.
My first credit card was with CapitalOne, back when that was the only way I could think of to start some credit.
It only has a $500 limit, which it's at, and I've been unable to pay it off for a year+. I always make the minimum payments, but they always find a way to bring it back up to the $500 level: whether it's with finance charges, or random 'over limit' fees which easily erase any progress I've made.
I don't mind having the card for emergencies, but for all the trouble and fees CapitalOne have given me, I'd rather just write them off and be done with it.
Is there a way to make the card immune to all these fees so they know I no longer want the card, so I can just pay it off at a normal pace? Or should I pay it off and then cancel it? Or are both a bad idea?
My first credit card was with CapitalOne, back when that was the only way I could think of to start some credit.
It only has a $500 limit, which it's at, and I've been unable to pay it off for a year+. I always make the minimum payments, but they always find a way to bring it back up to the $500 level: whether it's with finance charges, or random 'over limit' fees which easily erase any progress I've made.
I don't mind having the card for emergencies, but for all the trouble and fees CapitalOne have given me, I'd rather just write them off and be done with it.
Is there a way to make the card immune to all these fees so they know I no longer want the card, so I can just pay it off at a normal pace? Or should I pay it off and then cancel it? Or are both a bad idea?
cj iwakura on
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Basically, since you got your first card you've probably been sent some offers for credit cards with 0% APR for balance transfers for some period of time (6 months to a year usually). Go with one of those, and transfer the entirety of your current card's balance to it.
Then you won't be plagued by fees, other than the one time fee (which is usually 3%) for doing the transfer, and can pay it off.
The problem is that this new card will likely have a higher credit limit, so you need to do one of two things if you go this route:
1) Gain the willpower to resist using the cards you have for anything.
2) Chop up both cards (INCLUDING the new card, as SOON as you get it), and store the information about the credit card somewhere safe in case you need it, but don't save info like the security # on the back of the credit card. This way, the ONLY thing you will have on either card is the 500$ that you transferred to the now 0% rate, and you can pay it off without the temptation of using it.
Either way you go, chop up the CapitalOne card, as its rate sounds like its restrictively high from what you're saying and you should never ever use it.
Another alternative is to call CapitalOne and basically threaten to transfer your balance to another company if they can't give you 0% APR for 6 months. They've been pulling money from you like there's no tomorrow off of that 500 bucks, so they won't want to lose you. 5 will get you 10 that they'll cut you a 0% rate on the spot.
But even here, you MUST stop the spending on that card if you're going to get ahead.
Hopefully this helps CJ!
It's not a dire situation or anything, I could pay it off if I really had to, it's just getting on my nerves that I can't do so leisurely.
Just pay it off. Paying the mininum balance is basically throwing money down the toilet.
If for some reason they don't, there's dozens of offers out there with 0% APR for balance transfers.
EDIT: Aye, or you can pay it off immediately. That's probably the most ideal/painless/guaranteed to work scenario.
The bold part is your biggest mistake. Never, ever pay the minimum payment on CC cards. For most cards, all that means is that you're paying the interest the card is building up, not the actual amount you charged.
Secondly, while credit card companies can indeed be douchebags, they don't randomly create fees or push your amount back to 500, that's all your doing.
It sounds like he's stuck in a pretty bad place. His balance is probably just shy of $500. He makes the minimum payment for a given month, but then the finance charge puts him just above $500, so he gets an over limit fee assessed against him. This puts his balance well above $500. The next month he pays the fees and also the minimum payment on his balance, which brings him below $500, but the finance charge knocks him over the limit again. This cycle then repeats and he never really gets any of the balance removed.
My mother-in-law was in the same place a couple years back, until my wife & I finally just loaned her some money so she could get out of the trap of paying $35 over-limit fees every month.
Just pay it off and be done with it. Why mess around and throw away your money?
You realize you will never pay it off with only paying the minimum, right? And if you really didn't know this, maybe you're not financially mature enough to have a credit card in the first place. Just saying.
This solution is not the best for building a good credit history though, and I assume one day you'll want good credit.
1) You cut up the card, and pay off more than the minimum payment due, and have it paid off within a year.
2) You cut up the card, stop making payments, let it get sold off to a collection firm, which will negatively affect your credit, and offer them pennies on the dollar for the remaining debt, which they usually take. You'll need all of the cash up front, and once again, it negatively affects your credit score. Note: You might be able to talk capitalone into this same deal, but it's doubtful. Usually they don't make deals until it's sold off.
3) Just don't pay it. This is a horrible option, but it's an option, so I'll list it. You can never pay the card. It will show up as a default and be on your credit report for seven to ten years. After anywhere from one to four years (depending on where you live) of not paying a dime you will be considered default and the debt will be past the statute of limitations, so they won't be able to legally come after you for it. They will call you, every day though, and if you change numbers they WILL track you down, through family. It's embarrasing, and not worth $500
I've been down that road after I made some mistakes in college, and it's not the way to go man. Just save up an extra $60 a month (hell, sell blood if you have to) and pay the damn thing off.