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I Haven’t Paid Two Credit Cards in a While. How Can I Get Them to Eliminate Fees They Charged? – Margaret


“Dear Steve,

I have 2 unsecured credit cards that i have not paid on in a while. I want to rebuild my credit to buy a house in the next year. However, so much fees have been added to the cards I’m not sure how to even start getting them paid off. I would love to put them together in a loan with reasonable interest and have them paid off in a year. The total debt is approx. 5000 dollars.

How can I get the fees off the cards I have not been paying on?


Dear Margaret,

Forget the loan route. No legit lender is going to give you a loan to pay off this mess. Most will ask you for some up-front fee and promise you a loan and then just take your money.

The best way to pay these off for less than the full balance is to have at least 60% of the balance as cash-in-hand and then contact the creditor and see if they would be willing to settle the debt for less than the amount owed.

The downside to this approach is that the amount of debt forgiven will be a tax liability to you and you will have to pay income tax on that forgiven debt just as if you earned it. Also, the amount of debt forgiven will still show up as a bad credit history on your credit report.

It sounds like you don’t have any extra cash laying around to pay these creditors so I doubt you have cash to settle these debts right ow. Just don’t fall for the promises of a debt settlement company to allow you to make small payments to them to save up money to settle your debts.

Save the money yourself. Open a boring old savings account and save up at least $3,000 yourself before you contact the creditors to settle.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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