Question for the Money Doctors
Question submitted on Mar 12, 2011.
QuestionI have a balance of $9200.00 but I am $1200.00 past due. Is there any hope of paying this card off by paying 100.00 a week? Will paying 100.00 weekly help cut down on interest charges?
Thank you for the question. By paying $100 per week, it should take you about 26 months to pay off the card (assuming a 20% APR). So, yes, there definitely is hope for paying the card off. Paying $100 per month will cut down on the interest charges a little; but more importantly, it will probably make it easier for you to make the payment through cash flow. Paying $100 per week is easier than paying $433 per month for most people on a fixed budget.
The $1,200 past due would concern me though because you can continue to incur extra fees and increased interest rates. If you have the ability to roll the balance into a new card (preferably one with a low APR), then that might be a good option. If you don't have that option, try contacting your credit card company and making them the offer of paying $100 per week. Ask if they will waive any late fees and penalties and give you a reasonable interest rate if you make weekly payments. Most likely they will try to play hardball with you, but be persistent and ask to talk to a supervisor. If they agree, try to get them to put it in writing. At the very least get the name and contact information of the person who authorizes the deal.
I hope this helps. Good luck.
For additional information visit http://www.360financialliteracy.org/