~$60k credit card debt with BofA
700 credit score
Never been late on any payments of anything
What options do I have to negotiate credit card debt right now. I was told that I could get BofA to go down to 1% APR on my remaining balances. As long as all of my other credit cards are paid off or closed.
Thank you in advance!
Negotiating with banks is a bit of a game. Banks are made up of many different departments that each have different plans, options, and opportunities to deal with debt.
For example, Bank of America has a unit that just deals with credit counseling accounts. The first stage of collections doesn’t have the same tools that the next stage does.
I’m not sure why you’d want to rush to close any account that might be helping to boost your credit score. Always a smart idea to leave open your oldest cards to give you a long history on your credit report.
It’snot clear if you are interested in getting your interest rate lowered or trying to settle your accounts for less.
If your credit score is the most important consideration then paying at least your minimum payment each month and keeping your balances down below 35% of your credit limit is a good thing to do.
If you just want a lower interest rate, you can always call Bank of America and ask. They can say no and you have no control over that.
If you want to see what your payment might be with a non-profit credit counseling program, click here. Your account may be closed and your payment might be reduced, but that’s not a given.
What is clear is you need to gather some more information before you rush to make a decision.
When thinking about how you want to deal with your debt you should not only factor in the debt you have today but also incorporate what your financial plans are for the future. Do you want to maximize retirement savings so you will retire with more money or do you want to spend years repaying the current debt? You also need to think about your current emergency fund savings and how to avoid new expenses landing back on credit.
You also have to consider how much credit score pain you are willing to take if that means cutting your debt in half or eliminating it completely in about 90 days.
I’m a giant fan of getting opinions and facts before you leap. People I trust to give you good advice are Damon Day and Michael Bovee. They are both exceptional debt coaches who can look at your overall situation and get you pointed in the right direction given your current and future goals.
Please update me in the comments below and let me know what you decide to do.