Best advice for paying off a credit card?

[bogeymachine]

contact Citibank and ask to have the original terms reinstated

if that doesn't work (please try, it's worth the effort)...

stop charging on the Citibank Card now and decline the new terms. you can keep the old terms on the old balance if you decline to accept the new terms. Citibank will close the account and maintain the original agreement on the balance.

closing an account reduces your available credit and will affect your Credit Score. the impact depends on how much available credit remains and the balance on those accounts.

shop for more favorable terms on the debt. her CU is an excellent place to start. she has history there and CUs are less gestapo than Citi.

none of this is worth spit unless her spending habits are under control and repayment is disciplined.

don't touch the house or Retirement Funds.

bogey out

 

[seaside]

Depends on how much she owes and how many cards she got.

Usually getting another debt (loan) to pay off debt (card) is not a good idea, even if it could be a short term solution. Here's what I am suggesting.

- Find family member or a friend who can lend her some money to pay off her card.

- Plus 1 to what bogey said above. At least she can try.

- Get loan if the above is not possible. But make sure she knew the loan is a debt too and she got a plan to pay off it within a certain time period.

- Do not think about credit transfer, or getting another card to pay off existing card. Again, this is playing debt with debt, and the bad thing is, this play effects her credit score in a no time.

- She need to sit down and figure out what card she want to keep, what card she need to pay off and throw out if she had a lot of cards in her wallet. Older or high limit cards are ones to keep, since duration and limit is a part of credit score formula. 3 seems to be good number of cards to keep.

- She need to check her spending habit and cut unnecessary costs if there's any. For example, if she spend 40% of her income for cosmetics, clothes, dine-outs, games, phone bills, toys etc. she need to cut them. Otherwise, none of this suggestion will work.

Word "credit" in CC is one of the most deceiving word in the world along with the word "mortage" I think. It actually is a debt you should repay in the future, while it sounds like easy money that is given to you because you're trustworthy. People find themselves in trouble when they don't get that simple fact.

 

[geepondy]

LOL, no I've learned my credit card lesson from many years ago. Worst case scenario is that I've carried a small balance for a few months and paid it off with my tax return.

Get this. Many years ago, my roommate had a pretty good CC debt. His minimum monthly payment was less then the interest owed for the month so if he only made the minimum payment, his debt would still keep accumulating. That's crazy.

Tell your 'friend' to quit charging so many flashlights, batteries, chargers, parts, etc.

< just kidding >

 

[TooManyGizmos]

Good comments from a guy that ...... "live's in a van down by the river"

.

" Got Milk ? "
.

 

[ElectronGuru]

Credit and banking is one of the most tightly regulated part of out economy.

All the credit card company's ARE and have been way out of control on the willy-nilly intrest fees at their own discretion . They have been free to charge any rate they wanted with NO regulated limits.

This may be of interest (pun not intended):

http://www.wisegeek.com/why-do-so-many-credit-card-companies-have-a-wilmington-delaware-address.htm


Lesson: don't sign up/stay with a Delaware based banking institution

 

[was.lost.but.now.found]

Does the friend expect a tax refund coming up? If so, this year instead of buying a TV, taking a vacation, etc. like some do she could use it to pay off the ccard. That way she pays it off without making extra 'hits' to her credit report. Just another option.

 

[Lurker]

DonShock got it. Have her read the notice and pay it off under the old terms.

If that is not possible, she should go to a bank or watch her mail for a good offer to transfer the balance to a new card. Preferably one with no transfer fee, a good permanent interest rate (not just a good introductory rate) and no annual fee. If that is not possible, she should borrow money from a relative (NOT YOU). If that doesn't work, she is going to have to tighten her belt and make the payments. That is how credit works. First you spend it then you pay it back.

How much money can she free up each month by cancelling her satellite TV, high-speed internet and cell phone bills? How about if she gets a roommate and starts carpooling to work? Weekend job at a restaurant?

Once she digs herself out of this situation, she should strive to never carry a balance on a credit card.

 

[LuxLuthor]

Credit cards never cease to amaze me, and typify the worst examples of banks and big business abusing people to make money.

I have had 6 CC's for years, almost always pay in full each month, and several months ago my FICO was 821. To beat new regulations starting early next year, over the last 2 months, two of the six sent new terms with floating APR above Prime that puts current effective APR into the 18-21% range on unpaid purchases. Never mind when Prime rate increases as inflation will be starting next year. Suffice it to say I now have 4 CC's.