I recently went through an interesting scenario with American Express. I have been a customer of theirs for 10 years now. I had a balance of $5,200 as of a few months ago. I contacted customer service to inquire about settlement options with my account. I have been out of full time work for over a year now and wanted to explore my options. This card is my only open credit card and I planned to keep it open after paying off the balance.
The customer service rep was very helpful. We spoke a few times over four days. He explained the process to me and told me I would need to apply for a settlement amount and he would let me know if I was approved or not. A few days later, after thinking the process through, I chose to continue paying down my full balance as that was the only correct solution, after all, I did charge the amount to my card, I do not expect someone else to pay my debt.
A day later, I received a notice in the mail that because I had applied for a settlement approval my card was canceled. Also, my interest rate went from 12.99% to 27.9%! I immediately contacted customer service again. Explaining I was not aware that by simply applying for a settlement my account would be closed. I was aware that if I accepted it that would be the case.
Long story short, after 10 years as a loyal customer, the door was slammed shut on me. I was current on my account, I was proactive in contacting them to discuss options. I did not accept the settlement, I am aggressively back to a debt snowball attacking this final credit card balance and will never look back. Adios American Express, thanks for nothing!
Tuesday, December 29, 2009
How to keep up your credit score
Source: www.Freep.com
These days, a good score is around 720 points or higher. Here are some tips to help you maintain or improve your credit score:
• Do not apply for several credit cards. Applying for a store credit card could cut 10 points off the credit score of some consumers with good credit.
• Pay all bills on time -- utilities, mortgage, credit cards, etc. Lenders customarily don't report you as late to the credit bureaus until you have missed the original due date by at least 30 days. Being a month late with all payments, for example, might lower a credit score by from 60 to 110 points.
• Missing a payment on one account that wasn't already late could slice 40 to 75 points from some credit scores.
• Keep your credit card balances low on all cards, much lower than half of the available limit on your credit cards. Maxing out can cut credit scores by 45 to 100 points.
• Negotiating a debt settlement with creditors can lower some credit scores by 45 to 125 points. A short sale on a home would be reported as a debt settlement.
• A loan modification to get a lower mortgage payment and stay in your home could impact your credit score. In some cases, consumers could see credit scores drop by 100 to 150 points.
• Having your home foreclosed on could knock 45 to 100 points off your credit score, depending on where your score started.
• Filing for bankruptcy will hurt some credit scores by 195 to 255 points.
These days, a good score is around 720 points or higher. Here are some tips to help you maintain or improve your credit score:
• Do not apply for several credit cards. Applying for a store credit card could cut 10 points off the credit score of some consumers with good credit.
• Pay all bills on time -- utilities, mortgage, credit cards, etc. Lenders customarily don't report you as late to the credit bureaus until you have missed the original due date by at least 30 days. Being a month late with all payments, for example, might lower a credit score by from 60 to 110 points.
• Missing a payment on one account that wasn't already late could slice 40 to 75 points from some credit scores.
• Keep your credit card balances low on all cards, much lower than half of the available limit on your credit cards. Maxing out can cut credit scores by 45 to 100 points.
• Negotiating a debt settlement with creditors can lower some credit scores by 45 to 125 points. A short sale on a home would be reported as a debt settlement.
• A loan modification to get a lower mortgage payment and stay in your home could impact your credit score. In some cases, consumers could see credit scores drop by 100 to 150 points.
• Having your home foreclosed on could knock 45 to 100 points off your credit score, depending on where your score started.
• Filing for bankruptcy will hurt some credit scores by 195 to 255 points.
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