How can I pay off high credit card debt without closing my account?

R

RedUnoBipola

New Member
Hi. I’m looking for guidance/advice. I have two credit cards. One has a $23k limit and a $21k balance. The other has an $8k limit and a $6k balance. It is what it is. Life happens, and I’ve had to use the cards. As you can imagine, when I make a monthly payment—I’ve never been late—it doesn’t even touch the balance because of interest.

I asked a local credit union about a $25k personal loan to pay off most of the cards. I was approved, but with the stipulation that I close the $23k card. I don’t want to close it. I feel that would be a mistake. What are your thoughts?

Also, can I discuss with the credit card company about paying off the card at a lower amount in one lump sum? Is that a thing? Doe that affect your credit?

I’m looking for suggestions on how to get this paid off and the right decision to make.

Thank you!
 
Close it. Trust me, from personal experience: if you don't, you'll end up with $25k in loans and $20k on credit cards again. Life happens. Remove that temptation. Set up an emergency fund, so when it happens, you're not relying on the cards.
 
I work at a bank. Customers came in all the time wanting a debt consolidation loan or a Home Equity loan to consolidate debt.

Most who received the loan were back in two years for a new one, fr the same reason they got the first loan. It doesn't make financial sense to pay it off, keep it, then use it again when life happens again. It will happen.

So we started making customers shred their cards in front of us, at least. Sure, they could always request a new card from the credit card people. We tried taking them at their word that they'd close it or just not use it. That never happened.

I recommend closing and saving money for emergencies.
 
They can’t force you to close the card, but there’s real power in doing so. Yes, you may lose that high credit limit, but unfortunately, your utilization is high, so you’re not usi ng it properly and it’s hurting your credit score.

If you won’t close it, then freeze it or lock it away. You have to take using it out of the equation to fix your debt and money habits. You can use it again or open a new one when the loan is paid and you have at least $1000 in savings. From now on, you need to keep the card paid off every month.
 
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