Hello. So I have about $25,000 in credit card debt on 1 card. $13,000 has an interest rate of 2.9% until 12/31/20 at which point it goes to 9.9%. The remaining $12,000 has an interest rate of 2.9% until 12/31/2021 and then goes to 9.9%. My FICO credit score is 730 and I’m current on all payments and have been paying more than the minimum balance especially since COVID began and cancelled many things I would spend my money on.
I signed up for that AM-One thing the penny hoarder sent out just to see if there were any better options. Little did I know, it actually checked to see if I qualified for a loan from “over 100 lenders” and referred me to National Debt Relief. NDR suggested I join their program where I stop making my payments and they negotiate with my creditor and I end up paying about half in 30 months. My credit drops (They said my number doesn’t mean anything because of my credit utilization) and then after some time it will go back up.
My question is should I do this? I make about $48K a year. I don’t have a wife or kids and currently live at home with my pops. We split the bills evenly which comes to about $500/month. I’m easily making these payments and if I try harder I bet I can start paying off even more. It just seems wrong to go into this program especially since I’m the one who racked up this deb in the first place.
If this was my debt what I would do is enjoy the 2.9% on the $13,000 until the end of this year, then roll it over onto a new cc at a very low rate of interest or 0% interest. Do some research on your own and see what is out there. Especially with the holidays, lots of lucrative offers to entice you. You might have to pay a transfer fee which is usually a percentage, keep in mind don’t take more than you really need.
It would scare me beyond words to stop paying my bills that I ran up, therefore I would strongly hesitate to go that route, unless I had a lawyer on retainer to help me through. Someone with good standing in the legal profession because you know the people you owe money to have lawyered up.
As far as your credit score dropping, I would wonder how low it will drop and for how long, if that is a concern to you and your future plans. Generally people don’t like to see their rating drop. Can they put that in writing on what it will drop to and what it will recover to & when? There is no way you can tell. If they cannot guarantee the numbers in writing, all you have is their word, and what does that mean to you?