I owe $1750 on one credit card that has kept that balance for 5 years! what can i do to settle it?

Question

I've made payments to this capital one account forever, sometimes I have been late by a week or two, but they have always got a payment from me. When I got my tax refund I even paid them $700 just to lower it a little, but already in a matter of 4 months its right back to the balance it was before due to interest rates and finance charges. I haven't even used this card for anything since 2005! I know choosing not to pay is going to ruin me, but I can't keep paying, I'll never get it paid at this rate. I want to find a way to settle. I am sick of it! I was only 19 when I got the card, I was young and stupid and let it get out of hand. I realize the importance of credit now, but its still killing to make this payment. If I quit paying it and let them call me to death for a settlement is that something worth waiting for? I know my credit will be screwed for years but I don't know what else to do at this point.

Answer 1

Definetly get a 'pay for delete'....no point in re-setting the 7 year statute of limitations clock for nothing..not after 5 yrs anyway.

Contact the creditor/agency and ask for a payment arrangement or agree to settle full balance....get a pay for delete agreement in WRITING only....make sure in WRITING only.

Then that negative nasty will be deleted from your report like it never happened.

To correct anything else that's gone awry on your report:

1. Order your credit reports from the 3 bureaus

www.equifax.com

www.experian.com

www.transunion.com

If you're ordering for the first time, get your score (for a fee) from Equifax as their scoring matters most.

2. Make copies of your report and put the originals in a binder. On the photocopied reports use a highlighter and check for any incorrect, outdate, false, etc...info

3. Download a dispute letter(s) from the credit bureaus website and list anything that is wrong. Mail them to their office(s). They have 30 days to reply.

4. If they will not remove something that is not yours or too old (> 7 years) as them for a debt validation. This may take an additional 30 days.

5. Once the 'baddies' come off, take care not to let any of your other accounts fall into that predicament.

6. If you haven't already make sure your existing accounts are current and paid on time ALWAYS.

7. Get a secured credit card with www.capitalone.com or www.mastercard.com for like $500-1000 or more if you can and use it sparingly. Charge like $50 on the card each month and pay it in FULL and on TIME. Make sure you do this for a minimum of 6 months so that you estabish a positive repayment history.

8. Problem with just letting them (collections) 'fall off' is that they may never. You may get sued before that...that's where you suddenly get a summons to appear in court and a judgment for collection against you.

Answer 2

All you can do is call and see if they will settle! Of course you know these late payments are running up the balance, if you would have just made your payments on time then you wouldnt be in this situation. If you ruin your credit it will come back and haunt you so thats not a good idea.

Answer 3

First of all, what is the balance on the credit card now? 3,000+?    I don't recommend you to just sit back and wait for it to go into default because it will hurt your credit but if you are desparate, you should call them up and negotiate  for a payment plan.  It might take more than a few phone call but it beats the collectors calling you days and nights.  

Even if you get a good payment plan, you should try to put every dime and nickel you can spare and pay it off.  It is not easy but if some careful budget and cutback, you should be off in a year or so.

Answer 4

You have lots of options, if you are not currently in default.  Ask them for a lower interest rate, they may not do this, due to the fact that you have been late on some payments, but if they do, that will help.  You didn't mention if you are over the limit or and since $700.00, that should have been a nice dent, so I am missing something.  You need to go over your account with them, and see if they made a mistake.  You could also get another credit card and pay this one off, don't close it, just don't use it, and then pay more than the minimum payment each month so you can pay it off early.  Don't stop paying on this card, because it will hurt you more than you can ever imagine.

Answer 5

Just get a 2nd job for about 4-6 months and you should be able to pay off that balance. Don't just stop paying it because you'll feel very guilty about not paying and it just isn't worth the hassle.

Answer 6

What is the interest rate?  Are you making at least the minimum payment each month?  Are there monthly fees or annual fees?  Are you paying a monthly charge for insurance or something else?

I suspect you have outrageously high interest.  Everytime you are late, you get hit with late fees and you are probably going over limit with more fees.  However, even with late and overlimit fees for 4 months, there is no way those fees plus interest ran the balance back up after the $700 payment.

If there are some other kind of regularl monthly fee being charged, call and try to cancel.  No sense adding to the debt.

Normally the minimum payment covers interest and just a little of the principal -- maybe 1%.  So it takes forever to pay off credit cards if you are only making the minimum payment.

Put yourself on a tight budget.  Eliminate all the extras -- cell phone, eating out, new clothes, etc.  Put every penny you can squeeze out of that budget on this credit card.

Find ways to bring in more cash to throw at it -- have a garage sale, collect alum cans, get a second job.

If you decide to just stop paying, it will definitely ruin your credit.   They will hound you for payment.  And they might just sue you.  Capital One has it's own in-house collection dept and they are very aggressive about suing.

If they sue, they will win a judgment.  Then they will be able to garnish your wages, attach your bank account, and lien your property.  All of which will further damage your credit.

Not only will it be harder to get credit and interest rates will be higher, but you will be paying more for insurance and won't be considered for some jobs due to your poor credit.

If you really work at it, you could have that whole credit card paid off in less than 12 months.