Back in December, I accidentally overpaid two bills, which left us struggling to cover credit card payments. I tried to get a refund, but it didn’t work out. Now it’s February, and my husband and I got our bonuses, so things are slightly better, but not enough to cover everything, especially with late fees piling up.
My husband thinks we should stop paying the credit cards altogether and wait for a possible settlement. He believes that after months of not paying, the credit card companies might write off the debt and be more open to negotiating a lump-sum settlement for a lower amount, maybe 30-50% of what we owe. I’m not so sure this is a good idea.
I have three credit cards:
Wells Fargo: 23% interest, $708 minimum payment
Capital One: 27% interest, $595 minimum payment
American Express Gold: 29% interest
I called for financial relief, and here’s what they offered:
Wells Fargo: 1% interest if I pay at least $130 per month
Capital One: 0% interest for three months if I pay at least $233 per month
I haven’t reached out to Amex yet but plan to this week
Either way, this will hurt my credit, but my husband refuses to pay until there’s a settlement offer. I don’t want to destroy our credit any further, but I also don’t know if these offers are our best option.
Would love to hear thoughts on this. Is waiting it out worth the risk?
Not paying at all will destroy both of your credit scores, and once that happens, getting a loan or even basic financing will be nearly impossible for years. Your way makes more sense, but realistically, you need to stop relying on credit if you want to get out of this.
@Blayne
Honestly, if there have already been missed payments and the interest is adding up, their credit is probably already damaged. The minimum payments seem so high because of late fees stacking on top of previous missed payments.
Take those offers while they are still on the table. There’s no guarantee you’ll get a settlement, and in the meantime, interest and fees will keep adding up.
Caroline said:
Take those offers while they are still on the table. There’s no guarantee you’ll get a settlement, and in the meantime, interest and fees will keep adding up.
Appreciate the advice. My husband is really stubborn about this and refuses to pay. I think I might just start putting aside my own money to cover my cards separately.
@van
If he refuses to pay while he keeps using the cards, that’s not fair to you. He agreed to the terms when he got the credit cards. Ignoring the debt will only make things worse, and if they send it to collections or take legal action, you’ll end up paying way more in the long run.
You should check with the credit card companies directly about hardship programs. They sometimes offer lower interest rates or reduced payments for people going through financial trouble. Worth asking before letting this spiral.
Waiting it out could work, but only if you actively call and negotiate. If you just stop paying and wait for them to offer a deal, it’ll probably just go to collections. By then, your credit will be in bad shape, and they might not even give you a good settlement.