About credit card usage? : From 52,930 members

shannonser · Guest 100 DebtCC points

Can I still use my credit cards while doing debt consolidation? Will the creditors close my accounts?

Shirley · Posted: Sun Feb 19, 2006 5:52 pm Post subject:

Hi Shannon---from my experience in the past---no, you can not and aren't suppose to. Credit card companies do not like for you to continue to use your cards if you are in consolidation and can take you off of the program if you continue to do so. Some actually will stop your priviledges once you go into a debt consolidation program and it is listed on your credit report that you are paying through a debt consolidation. At least this is how it was for me. If I am wrong, someone please correct me, but this is how it was for me when I was in debt consolidation. They see it that they are doing you a favor by accepting you on the program and that you are trying to get a grip on your finances---continuing to use your card isn't helping you on your way of having a 'free' debt lifestyle. hope I have helped. Very Happy

Shirley

TMD · Posted: Sun Feb 19, 2006 6:32 pm Post subject:

Most debt consolidation companies actually require that you close your credit card accounts first....at least that is my experience. So, you need to check into that before you consolidate with them if you do not want to close your accounts. And in some cases, it is the credit card companies that make you close the account, or they close it for you. That can be answered by the consolidation company for sure though.

john · Posted: Mon Feb 20, 2006 8:42 am Post subject:

shannonser, Shirley as well as TMD is right. You won't be able to use your credit card accounts that have been included in the program. The reason is that if you are allowed to use your account, you will be increasing the overall debt and hence the consolidation program won't function as fixed in the beginning.

It is also good closing the account in the program because this way, you will be able to catch up your payments. Otherwise, it will always seem like chasing a moving target. Some companies freeze the accounts if you don't close it. Once the debt is paid off, you can regain the access to that account.

You can also talk with the consultant who will inform your creditors after enrolling in the program. Arrangements will be made for you if your accounts need to be closed or they can be frozen for the period.

Guest · Guest's Home Page 100 DebtCC points

yeah they usually close them out. Just work to pay off your debt on your own. debt consildation should be a last chace choice. you can do it!

stanley · Posted: Sat Mar 04, 2006 9:34 am Post subject:

IMO, closing the accounts while the consolidation process is going on is beneficial for the customer. Say for example, when one places his accounts under consolidation program, the counselor sets the payment plan according to the debt amount. If this amount goes on increasing, the repayment period will be elongated and your debt free days will be delayed. That is because a temporary stop is important – once the program is over, you can use it again.

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