Hi guys,

So when I was younger in the beginning of college I started a business and was using my personal credit cards to fund almost everything. Long story short I pretty much maxed out the credit cards and didn't make enough to pay them back. It was two separate cards and the balances were 8K and about 12K. For a long while after college I continued to pay the min payments on these cards, but it was starting to kill me with all the high interest rates.

About 2 years ago when I started a full time job (entry level) I was getting crushed with all the minimum payments I had to make. I also had other cards that had balances at the time as well. I decided to take some sort of action. I always had debt reduction/colsilidation letters in the mail, but knew those were a little sketchy.

I called up BOA (the provider of both cards) and they let me close the cards, and asked for a detailed list of my expenses etc. They lowered the cards to 8% APR and set a monthly price I would pay so the cards are payed off in 5 years. One card is $200/month the other is $260/month. Both have been automatically paid on the 9th of each month from my checking account. I have already almost cut the balances in half, and they should be fully paid off within the next 2 years (as I might just throw a ton at it once the balances get lower).

They told me this would have no negative effect on my credit, as it just shows that I requested to close the cards.

I keep making this $460 payment a month and wondering if I made the right choice for all these months...OR if I should have used one of those debt deduction companies, neglected the account and settled a balance? I feel like there's all these other ways of paying less, and I'm screwing myself?

Did I make the right choice?

 

I think you did great. You may get a little dinged if these are your older CCs, since it will shorten your age of credit lines. But you won't get hit for any debt settlements on your record and you're making good on your obligations, something that is seriously lacking nowadays.

 

And because you didn't do any settlement, you have no tax obligation on the forgiven amount.

http://finance.yahoo.com/news/surpri...153250437.html

 

Sounds like you made a good move.

...and props to you for paying your debt, instead of running away from it.