Locking credit Card?

lykaonMarch 30, 2009

My wife has gone back to school, and our income level has changed, which has left us with 11k on a credit card that we can only make the minimum payment on each month, which is essientially just paying the interest on the account. I've heard that some people going through hard times can get credit cards locked and just pay the balance without incurring anymore interest. Is this just an urban legend or something that just applies to people filing bankruptcy (I heard about this happening to people trying to prevent going bankrupt)?

I don't want to do anything that hurts my credit, but I hate to just pay interest for the next 2 years until she finishes grad school. Thanks for your time.

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lucy

As far as locking goes, you'd have to check directly with your CC company. But I would strongly suggest that you pay even a tiny bit more each month on the balance, so you at least make a stab at the principal and not just keep paying interest. I think it could make a difference in your credit score (for future considerations) just by showing good faith.

    Bookmark   March 30, 2009 at 7:09PM
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Ideefixe

Call your credit card company. I think what happens is that they freeze the card--meaning you can't use it, and that you might not get it back, but they'll usually lower the interest rate and let you make monthly payments.

    Bookmark   April 2, 2009 at 1:45PM
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triciae

It's highly unlikely a lender will consider your wife's school decision to be a hardship case warranting that they reduce their rates to subsidize that decision. But, what the heck...can't hurt to call them.

/tricia

    Bookmark   April 2, 2009 at 2:34PM
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mariend

You might want to consider two options. Talk to your banker (loan officer) to see if you could get a personal loan with fixed rates and pay it off as fast as you can, and keep the CC for emergency only use or ask him/her about closing the CC account, freezing the rate and get another one, but personally I think that would not be good as CC interest rates are over 20% even with those with excellent credit. If you do get a loan, be sure you do not have a pre payment penalty clause in it. Your rate should be alot lower.

    Bookmark   April 2, 2009 at 8:26PM
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