Settling for the Wrong Reasons
Nicky and her husband have eight credit cards totaling $19,000. She wants to stop paying on them for 30 days, then settle on all of them. Is that a good strategy?
QUESTION: Nicky in Nebraska and her husband have eight credit cards totaling $19,000. She wants to stop paying on them for 30 days, then settle on all of them. Her husband is worried that he won’t get a good job if they do that because of damaged credit. Is that a good strategy? Dave isn’t a fan and gets riled up with the call.
ANSWER: What your husband heard was wrong. Some industries do check credit because there are people that deal with money and credit. Others don’t check credit.
But you guys have the money to pay this bill. You’ve done away with the interest rate—it’s $19,000. You just have to do some things you don’t want to do in order to do it, like getting a job. What you are doing now is a hobby; if it were a full-time job, you’d be making a living at it. If you want to start a business, you don’t need to borrow money to do it.
You just called me about not paying your credit cards, and now you’re asking about borrowing money. How inconsistent is that? You want to pay off your credit cards for less than what you borrowed from them, and in the same dadgum conversation you want to go borrow more money. That’s an inconsistency that’s unbelievable.
You’ve got to decide you’re not borrowing money anymore or paying off the credit cards is useless. I would not recommend settling but for different reasons than your husband. The reason I would recommend that you don’t settle is because you can pay them. You should only settle with people and not pay them what you owe them if you are unable to pay them, not because it’s inconvenient and doesn’t meet your goals.
You want to speed up buying a home and speed up starting your business, and for that reason these credit cards are inconvenient. You need to pay your bills. You are able to pay your bills. That’s my recommendation to you.