How Do You Start A Repayment Plan With a Credit Card Company?
by Mr Credit CardOne of our readers, Gene, had a couple of questions for us:
How do you start a repayment plan with a credit card company? and
I get a paycheck bi-weekly. can i split my credit card bill payment in half and pay them bi-weekly and will this help me pay them off quicker ?
Thank you for your questions Gene!
Let’s start with the first one:
How to start a repayment plan with your credit card company:
Normally, all you have to do is call your credit card company. If you are not currently past due, and you do not plan to be, then you really don’t need to make a payment arrangement.
If you call to make a payment arrangement when you are not past due, your credit card company will probably still tell you that you have to be past due or they can’t set it up.
Credit card repayment plans really only exist to help seriously past due accounts get back on track.
If you are past due with your credit cards, then be sure that you negotiate with the collections department. Collections reps can set up payment arrangements, remove any of the fees on your card, and possibly even reduce your interest rate. All you have to do is ask.
Now, let’s take a look at your other question:
Will paying your credit cards bi-weekly help you to pay them off faster?
There are a couple of issues with this. In theory, yes you will pay them off faster by sending in bi-weekly payments because you will essentially be sending in a couple of extra payments in a years time. (This is assuming that you are splitting the minimum payments up between two payments.)
However, that is not a good way to pay your balance off faster. Also, some credit card companies may not let you make less than the minimum payment - even if you plan to pay the other half later.
There is no hard and fast rule that you can only make a credit card payment once a month. You can make a payment every day if you want to - they’ll accept your money any time. Be sure that you aren’t getting charged “telephone” or “processing” fees though. If that’s the case you may just want to make one payment a month to avoid an additional fee.
So, the best situation would be to call and make a payment plan if necessary. Promise them only one payment a month (in case you find you need your money) and then make an extra payment with your next check.
As long as you are paying more than the minimum payment each month, then you will be getting your balance paid off faster. Just make it a habit to send in as much over the minimum payment amount as you can. Even if it’s only $25. Over time, it will add up.
If you have to make a payment arrangement, whatever you do, stick to the payment arrangement. Make sure you make at least the minimum payment on time as agreed each month, and then send in any extra money you have when you have it. Just don’t miss the payment you agreed to.
Thanks again for your question!
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November 19th, 2008 at 3:33 am
I have one Credit Card debt with a balance of $15,000 can not pay the Min amount they want like 3,000 they will not work with me to set up a payment plan i tried many times. i can only send them a certain amount each month and yes it is small $125.00 but they still want there 3,000 each month they keep calling asking for this amount i told them if they will not accept the $125 a month i will have to file Bankruptcy which i do not want to do. I thought they woulld rather have some money going to this account as little as it may be at least im trying to pay something on this account then to have to file Bankrupcy and they get no money it’s all i can sent (not only Debt i have) should i keep paying $125 or file Bankrupcy and Pay nothing on this account?
December 17th, 2008 at 3:44 am
I practice BK law and have to deal with the nitwits at the CC agencies all the time. 95% of them have no clue what they are doing, they just want your money. Don’t do anything until you get something from them in writing. BK is the best law in the world if you qualify for it. Chances are, if you haven’t paid in months, your credit is trashed anyway. And, in this economy, nobody can get credit as it is, even the crooked banks. So, don’t feel bad, most people shouldn’t use credit anyway. If you start making lots of money and the economy ever comes back, they will be falling all over each other to give you credit again. I have been through several cycles. Don’t pay them the $125 if they are not going to set you up in a plan or take you off the non pay list. You did not state what your rate is, your minimum payments or who the card company is so it is hard to tell you what to do. Most companies now are working with people. Don’t cave in, and don’t throw good money after bad money, you may not even be making the interest payments, it isn’t worth it.
December 30th, 2008 at 7:29 pm
I lost my business in April of this year and things are starting to catch up. I spoke to Chase on my business card and they agreed to cut my payments in half as well as my interest rate for a year, which helps a lot.
Bank of America however will not do anything. I called and asked to negotiate a payment plan but they said they would refer us to a non-profit for credit counseling. This is after they did a pull on my credit which i did not authorize. I do not want to go to a non-profit credit counseling. If Chase can help me with payments why can’t BofA help me out too? Should I keep calling or requesting to talk to someone else there? Any advice on how to approach the difficult nature of BofA. Who should I ask for? What else should I say? Should I wait for it to go to collections to negotiate with them? or at least threaten them with, “Im paying Chase first before I pay you, since they are helping me”? Please help…
Details:
Payment is about 450 and was requesting half. I am one month late now. I told them next month will be hard as well and that I lost my business in April this year. Interest rate is 30% with a balance a little over 12k.
Thanks
Andrew