I have decided to stop paying on my Discover Card. I have called them twice in the last 4 months to get them to lower the interest rate or payments and they are complete jerks to me and refuse to help me. I maxed this card out during my divorce to pay bills so my interest and balance are outrages. The balance is $9k and the interest is around 27%. I pay $180 "minimum" payment every month and $130 goes to interest and fees. I have never been late or missed a payment and it ticks me off so badly that they won't help me.

I have been working two jobs for the past 4 months to make ends meet and I can't handle it anymore. The stress and hours are killing me and I have to do something. Does anyone know the process the credit card companies take you through when you stop paying? I know my credit will be shot and I am okay with that. Thanks in advance for any help.

Yeah I couldn't believe it when Mastercard called and told me if I didn't pay up they were going to turn mine over to collections and I would have bad credit. I told them to go ahead cause my credit couldn't get any worse and at least once in collections the interest, fees and late fees would stop snowballing. They said, "Oh, no you still get charged credit and we do our own collections."
So how/when you quit using your card does the interest and late fees ever quit if they can do it with no end in sight?


Also after so long they will often negotiate down to around the principle but then they want it in one lump sum or no deal.

Hello M Momma

Ok if you stop paying this is what will happen First you get a few letters and a few phone calls and then they start calling you every day sometimes 10 days a day also they may call you at work Then if they see they are having trouble collecting it or if its been a while they will sell it for pennies on the dollar to some low life collections agency and then comes more calls , letters etc. then one day out of the clear blue you will get a warrant in debt and if you don't respond to it they will get a default judegment and next thing you know your wages are garnshied and they will attach your bank accounts

mm, I'm sure you are really fed up with these guys, but refusing to pay them isn't the answer. You used their money, you owe it back. It doesn't matter if you don't think they are playing nice, you borrowed money for them, and they want what is rightfully theirs.

Also keep in mind that such a ding on your credit report can have long lasting negative effects on your life. You might be unable to rent an apartment, to buy a home, buy a car, take out a student loan, or even be employed at certain companies.

By not paying this debt you will be doing horrible damage to your credit. If you can find a way to continue to pay the minimum balance, do so. Don't charge anything else on that card (or any card). Consult with a debt counselor (NOT a consolodation place) and see what you can do to get rid of this debt. Maybe you can do a balance transfer to a card with less interest or no interest, you never know. But if you simply stop paying, you will be ruining your credit for a completely avoidable reason.

Good luck.

As the person before me said, go and see a budget advisor. Sometimes they can be helpful in negotiating lower interest rates etc for you - and the company is often more willing to meet you halfway if they know you are getting budget advice, and are willing to pay the debt back.

Don't just ignore the letters and bills - they don't go away and you could end up owing more in the long run.

Don't stop paying! Continue to make as much of a payment as you possibly can. And in the meantime start looking for another credit card that offers special deals for balance transfers. As long as your credit score is good you should be able to get a new card and transfer the balance from this one to the new one. Many companies offer very low interest rates for the first 6 months or a year--sometimes as little as 0.9%.

If you stop paying you'll kill your credit score. Then it will take years to repair it to the point where you would get a decent interest rate.

And remember... the best revenge you can have against the Discover people is to take your business elsewhere.

If you stop payments you are hurting no one but yourself. They will get their money, one way or another. Credit counselors can negotiate a lower payment and lower interest rate on your behalf.

Let me add my voice to the don't stop payments crowd. That's like cutting off your foot because you have athlete's foot.

I recently had a run in with my bank because they refused to waive a late charge that I could prove was not my fault. It was either their fault or the post office's. So I told them I was taking my business elsewhere and did.

If you have good credit there are any number of banks that will offer you balance transfers at a low rate either for the life of the balance or for a year or so. You have probably gotten many offers for that. Use one of them and transfer the balance.

Well, I called Discover card again last night and asked one more time if they would lower my interest rate or payments. The first lady was a b!tch and refused to change anything on my account and told me there was nothing Discover Card could do for me. I asked her if they had a hard ship program and she said no. I then told her I wanted to close my account since I couldn't afford the payment at all. She said that was fine and transferred me to another lady to close the account.

The other lady ended up being the nicest person I have ever spoke with at that place. She asked why I was closing my account and I told her I couldn't afford the payments anymore and if I just paid the amount that I could every month then they would just keep adding on $40 charges for it not being the minimum payment. She told me that she could lower my interest rate by one point, but it still wouldn't lower my monthly payment. She suggested that I get on their hard ship program. I told her I was just told that they didn't offer a hardship program and that there was nothing they could do to help me pay it back. She said they do offer one but I have to have a delinquent account before I can get on it. She told me to wait until I am past due on my next bill by a couple days, call the company and ask to be put on the hardship program. I could be put on payments that I could afford with little to know interest until I get on my feet good enough to start paying the minimum payment again.

Just thought I would give you guys an update so you would know that I didn't completely stop paying. Thank you for all the advice and help.

We recently left our bank for a similar reason to Scott. We wanted to use our savings account as our overdraft protection. They told us that we could not do that. That we needed to use their protection and if we did not they would close our savings account. My husband hit the fan and we have since moved all of our accounts to another bank. In that time though we never stopped paying our bills. It is important to pay as much as you can then transfer your balance to another company. But be aware that there may be transfer charges.

Clark Howard, the consumer advocate, recommends that as long as you are up to date on your payments that you pay the monthly amount in halves every two weeks. For example: your payment of $400 is due on the 30th, so pay $200 on the 15th and the remaining $200 on or before the 30th. You may a greater headway on your overall balance because interest is accruing on a daily basis. Good luck!

I'm glad you have a "plan" mm, it sounds like this is a much better option than letting the account fall into collections. Continue to give some thought to talking with a debt counselor or financial advisor. They might be able to give you some advice on how to make your income go further and help lower any other payments you might have. They will also give you a crash course in credit and how important it is. It's important if you seek out this type of help you DON'T go to a debt consolodation place; most of those companies take over your accounts, you pay them a monthly fee, and they let your accounts fall WAY past due (which ruins your credit) and when it get to the point of collections, they call and negotiate on your behalf. A tip for when you call any company you are trying to negotiate with - if you aren't getting what you want, ask to speak to another representative or to their supervisor. Keep moving up the chain until you get what you want, and if you still get no help, say you would like to close the account. They don't want to lose your business, so it's better for them to offer you SOMETHING than to let you leave.

Good luck!

I would still look into a balance transfer if you can get it. You might be able to significantly lower your interest without having the account go delinquent and affect your credit.

That's true, but that's what interest does. That's why it is so important to learn about and understand credit before you get a credit card. There are companies who will give you an intro rate of say, 11%, and if you make ONE SINGLE late payment, your rate skyrockets to 26% or even 30%. Most people don't know that, and it gets them in trouble. When you get a credit card, you are agreeing to the terms they set out. You have agreed to pay on a certain date with XX% interest. It's a contract. Why should you be excused from holding up your end of the contract? They held up their end - they gave you the money you asked for. This is where shopping around for a card comes in handy; instead of taking the first offer you get in the mail, look at dozens of companies and cards and see who gives you the best terms. If you fully understand the contract before you enter into it, you might be less likely to default. But if you entered into a contract without reading it, and it bites you in the butt, that's no one's fault but your own.

JB
True, but how often people think they have this great paying job and THINK they will never get laid off and end up in the poor class and Wham. Most Americans don't plan for failure or hard times. They should but they don't.

NOhelp, you're right, people get into bad situations, and everyone doesn't plan for them as well as they could/should. It's easy to think you are doing great if you have a good job and are making decent money - but you have no safety net. An overwhelming percentage of Americans are two paychecks away from going bankrupt. Two paychecks! That's a result of lack of planning; buying a $900 pair of shoes instead of putting money into savings. For people in that situation, the loss of a job is a disaster, and will soon drive them into the poor house. That's why people use credit cards as a "safety net". That's a horrible idea, because, as evidenced, you spend all this money on the credit card (could be preventable expenses, but let's say it's not) and before you know it, you owe $5K and don't have the means to pay it back. That's dangerous; but many, many people do it. If more people would put a small amount of money into a savings account each week or month, a job loss, divorce, illness, whatever would not hit them as hard. It can be as little as bringing your lunch to work 3 days a week, and putting the money you save from going out into a savings account. Or cutting back on Starbucks, or buying the kid's shoes from Target instead of Macy's. Only the individual can see where they can squeeze a little money from. But if you do that, and you have $5K in a savings account after a few years, then that life circumstance hurts you less. Even if you don't have a safety net (or it's not big enough) and are forced to use credit cards to bail yourself out, you can still shop around for the best terms. With the internet now you can check out cards and their terms and fees for all the major companies - pick the ones that look the best and call the company. It takes the same amount of time to get a Mastercard with an 11% interest rate as a Discover with a 7.5% interest rate. So why not start at a small advantage? But regardless, the answer when you get in a bind isn't to stop paying. If you rent and you stop paying your landlord, what does he do? He kicks you out. If you don't pay your electricity, what happens? It gets shut off. If you don't pay your credit card bills, they fall into collections, ruin your credit and prevent you from getting one in the future. Bad credit also can keep you from renting a nice apartment, or buying a house, or buying a car, and more and more companies are starting to do credit checks on employees before hiring them? Have a score of 480? Sorry - you don't get the job. Those are all the reasons credit is so, so important, and understanding it and planning a little bit can help to keep you out of trouble.

Hey Scott,

I would love to get a balance transfer but its so hard to find someone that will finance a $9000 balance. My ex-husband and I consolidated bills about 3 years ago that he had charged up while remodeling our fixer upper house. We signed jointly on the loan so even though we are divorced and he got that bill in the divorce, it still shows up on my credit report and the loan officers cut me off in mid sentence when I try to explain that I don't have that bill. I have tried every way to get out of this without screwing up my credit. My credit score is 725 right now and I hate to loose it but I have no other options.

My credit score is only a little higher than yours and I get offers for new credit lines in 5 figures.