The best way to pay off credit card debt as a recovering drug addict starts with being honest.
Call your bank, tell your story, ask for options.
You don’t need to declare bankruptcy to fix your finances!
The sooner you start to pay off credit card debt, the better. Make fixing your finances one of your top priorities in recovery.
You can get your debt under control without a debt consolidator. Debt consolidators are best for people with debt that is doubled their income.
You might want to fix your credit card debt yourself if:
- Your addiction tarnished an otherwise good credit history.
- You want to try to keep the credit card in question.
- Your total debt is less than $50,000.
Best Way To Pay Off Credit Card Debt: Capital One
Drug addiction left me in debt with most of my credit cards. Before using drugs, I paid every bill every month, on time. I was even able to pay off a few loans due to my profits from drug dealing!
A year ago, if you told me that my drug abuse was getting out of hand, I wouldn’t have listen. Friends tried to warn me, but I felt invincible. Today, I’m staring at a closed bank account, letters from collection agencies, and debt that keeps on piling.
Today, I Had To Take Action
Your best bet is to be honest. Just start and be honest. Start right now. Start today.
When you just can’t stand your debt anymore, pick up the phone and call your creditor.
A creditor is the financial institution with whom you opened the credit card. If you opened the credit card with a store, you need to check the back of the card to see which bank sponsors the card. For example, Chase bank is the creditor for the Amazon Prime credit card.
Start with one credit card at a time. You will need to repeat this process with every credit card you own. But do not overwhelm yourself.
Call the first company on your list.
Today, I started with Capital One. I have two credit cards with Capital One that are past-due for over 5 consecutive months. As a result, I can no longer make purchases with either one.
Lower Payments vs. Long-Term Credit
Before calling Capital One, I had to decide on a few things.
First, since my credit cards with Capital One are my oldest credit cards, I want to keep at least one active. Even if I never make another purchase with that credit card, it is important to keep it active.
Your credit score is calculated by many factors. One of those factors is longest active line of credit.
Even if drug addiction lowered your credit score in the short-term, you want to consider the big picture. What’s your credit history like? If you have at least one credit card that is at least 5-years-old, try to keep it.
Second, I decided that I want to pay a low interest. I want to stop late fees. While paying off my credit card debt, I don’t want it to get worse.
With these two goals in mind, I picked up the phone and called Capital One. Here are the stats of that phone call:
|Credit Card 1 Debt||$821.10|
|Credit Card 2 Debt||$2,765.90|
|Total Time of Call||31m 28sec|
|Number of Transfers||2|
The first thing I did was explain my situation. If you have been a paying customer for a number of years prior to your drug addiction, remind the representative of this fact. I told the representative that I was a recovering addict trying to get my life together. I told her that I had to enter treatment in order to recover from addiction.
Drug Addiction Counts As A Medical Issue
Make sure you tell the customer service representative that you’ve been in treatment.
Capital One offers a service for customers with medical or legal situations. As a recovery addict, you qualify.
So, tell your story – you will be surprised how understanding and supportive the representative will be.
Option 1: Keep Your Credit Card
Credit Card 1 was eligible for reinstatement. If I pay more per month, I can keep my line of credit open. Capital One calls this first option the Specialty Assistance Reinstatement Plan.
The original balance of $821.10 became $1,173.10. As long as I can pay off the balance in 3 months, I can keep my credit card.
If you can afford an option like this, I suggest you take it. Having a credit card with a long history shows that your drug addiction was a short-term problem. The three credit bureaus prefer a long credit history. Closing a bad credit card and starting fresh with a new one will not necessarily improve your credit score.
However, with option one, the payments will be steep. I must pay $392.00 per month for this option to work.
You cannot be late on these payments otherwise the deal is off. If that happens, you still have to pay the past-due balance. There are no get-out-of-jail-for-free cards. Plus, you lose the option of keeping it active after it is paid off.
If that happens, try pursuing option two.
Option 2: Make Lower Payments
If you miss a payment after Capital One sets you up for the first option, you may still qualify for option two.
Or, if you cannot afford large monthly payments, then option two is for you. The second representative I spoke with explained the Long-Term Payment Plan.
Capital One’s Long-Term Payment Plan reduced my APR from 24.9% to 7.4%. A lower APR means lower interest charged to your balance. With low interest, your debt won’t grow.
When you miss credit card payments, your account becomes delinquent. Delinquency goes against your credit score. With this option, after you make three payments on time, your account is no longer delinquent.
Capital One gave me one low monthly payment of $60.00, which pays off the credit card in 5 years. Of course, I can always make more payments to pay it off sooner.
The drawback to option two is that Credit Card 2 is permanently restricted and closed.
You Can Fix Your Credit
No matter how dismal your financial situation may seem, keep your head up. Stop ignoring the issue.
Call your creditor and ask for help. Remember, they want their money. Take ownership for the bills you accumulated while high. You will feel better about yourself.
For me, paying off my drug debt feels good. I think of it as a way to make amends to society. During active addiction, I took advantage of a lot of institutions.
I took an easy way out.
Pay off my credit card debt forces me to face my financial problems head-on. After calling Capital One, I feel more confident in myself. I feel like my life is becoming more manageable.
Finally, I am erasing the damage caused by active addiction.
And if a procrastinator like me can do it, then you can, too. Just start! You have everything to gain and only debt to lose.