Question by Bryan B: will closing a paid-off credit card account that’s reported a late payment b4 hurt my credit?
I have a retail store credit card. I carry a very small balance on it from time-to-time to take advantage of their no-interest promotions. Well, a year ago I forgot to make a twenty-dollar payment while I was out of town and not getting my mail. My credit was hit and it really hurt my score. The same thing happened this week with the same card. I paid the card off this morning but apparently I am just too retarded to keep track of more than a couple credit cards so I am considering closing the account. But I wonder what’s best… Should I try to “repair” my relationship with them by buying something else and making regular payments, or will that not help me? I have a mortgage and other credit cards (that I carry much larger balances on), and I am never late on them. So is it okay for me to close that retail store credit card account, or should I keep it for a while and try to show them that I’m not an idiot? What’s going to help bring my score back up?

Best answer:

Answer by Dana R
It is much much better to keep the account open with a zero balance than to close the account. Just having the credit helps your debt to high credit ratio and can eventually boost your score even if you don’t use it. It shows that you have credit and are responsible enough to pay it off and not keep a balance. If you have a few accounts that you use every once in a while and pay them off right away that is a good thing. Obviously it’s not good to pay them late at all. But in the end it benefits you more to leave the account open and not use it than to close it. Don’t worry about buying something else with it because that won’t make a difference. Just leave the account as it is. That will help your credit. Good luck!

Know better? Leave your own answer in the comments!

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Debt Negotiation-Clear Off Your Debts

Debt negotiation helps you to clear off your debts and lead a debt free life. If you have been irregular with your payments and missed 3 or more of them, it is time you start thinking of negotiating your debts. Debt negotiation is a good option for you if your debt account has been sold to a collection agency.

In debt negotiation, your outstanding balance is reduced by as much as 40% to 60%. You can opt for debt settlement in case you have the following debts to settle.

1. Store cards
2. Credit cards (unsecured)
3. Personal loans
4. Payday loans
5. Checks that have bounced
6. Medical bills

If you are hiring the services of a debt negotiating company, they work on your behalf and negotiate with the creditors to lower your outstanding balance. The debt negotiation firm evaluates your financial situation to find out if debt settlement is the right option for you or not. A budget is worked out so that you can curtail your other expenses and save some money for making payments towards debt negotiation.

A trust account is created into which the payments are made instead of paying them to the creditors. When there is enough money to start negotiating with the creditors, debt negotiation is initiated. Once the creditors agree to lower your outstanding balance, you start making payments to the creditors. A trust account usually doesn’t earn any interest but you regularly receive detailed statement indicating the monetary movements that have taken place in the trust account.

Effect of debt negotiation on credit score
Your credit score is an important indicator of your financial health. If you have a good credit score, it increases your chances of availing fresh credit in future. Not only this, you also stand a better chance of availing the various financial privileges some of the creditors offer, the rate of interest being one of them.

Since you stop making payments to the creditors for sometime and make payments into the trust account, your credit score gets damaged for a brief period. The score drops till the time your creditors don’t receive any payments from you. However, once your payments get regularized again, your credit score starts increasing.

Debt negotiation firms-check their credibility
If you are taking professional help, the debt negotiation firm you hire determines to a large extent, how successfully you complete the debt negotiation program. Prior to hiring their services, it is better to check their credibility. Try to search for the past records of the negotiating firm. Don’t settle for the firm that asks for fees before they actually do anything for you.

How do you benefit from debt negotiation?
Debt negotiation can be of immense benefit and can help you to lead a debt free life. Once you enroll for a debt negotiation program, the number of collection calls made by debt collectors is greatly reduced. You are entitled to pay less than what you owe, you become regular with your debt payments and finally you are able to lead a debt free life.

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6 Easy Ways of Credit Card Debt Solutions You Should Consider

Are you looking the best do-it-yourself credit card debt solution methods? Actually, there are many available ways you can try to start reducing your credit card debts. Here are 6 easy and simple tips of credit card debt solution you can consider to follow.

Stop completely using your card when you have found yourself stucked on credit card debt problems. Obviously, this is the most important thing you must do, otherwise you will be getting more problems and hard to get you out of your own credit card debt problems. Instead of using your cards, leave them at home and take them out from your wallet.

Start paying off your credit card debts from the smallest account with smaller amounts to the largest account. By doing this way, you can get a slow but sure process to reduce your credit card debts and this is also one of the best credit card debt solution to try.

Find another card with lower interest rate. This way would pretty much helping you to save few hundred dollars a month from paying the interest rate. You can start hunting from local advertisement or call several credit card companies or banks that can issue a card with lower interest rate and then transfer your card balances to a new card with lower interest rate. Many people have been using this credit card debt solution to save them from higher interest rates.

Do the payment on time according to each card due date. Otherwise, you will be charged for additional finance charges and late fees. Instead of reducing your debt balances, you will be adding more debts if paying late.

If you have not sufficient funds to pay your credit card bills, then you should look for part time works to earn extra income. This is the only way you can do to generate extra income on your own and help you to reduce your debts.

Close your credit card accounts once you have finally settled your debts. For instance, you own five cards with different amount of debts, once you can pay off one account out of five accounts, it is highly recommended that you close straight away that particular account to avoid using it for another purpose. This method seems to be the best credit card debt solution and stay debts free.

I do really hope you can follow these six easy do-it-yourself debt settlement solution above in order to reduce your credit card debts and start to live happier without debts. Good luck!

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