I had an anonymous reader post a question in the comments section of another post, and I wanted to make sure that the question and answer didn’t get buried! Here’s what this reader came to me with:
Hi Stephanie–I just discovered your site through some browsing. I am currently a Senior in college and in debt. I’ve gotten to the point where ALL of my credit cards have been maxed out and is not able to keep up with the minimum payments for all of them. As a result of that, I’m on numerous hardship programs with only one working credit card while the rest are closed accounts. I’d like some advice or some input on what you think about the hardship programs. Thank you.
I don’t have a huge amount of experience with credit card hardship programs, but from what you’ve told me, it sounds like you’re actually better off than you think you are. The fact that most of your credit cards have canceled your accounts is actually good for you. This will prevent you from taking on more debt – and trust me, you’re never going to get out of this if you take on more debt!
Cut up the canceled cards, because they’re not doing you any good anymore, and cut up the one working one, as well. Ok, you might not feel you’re able to do this. I still haven’t been able to cut up my credit card, even though I know I should. But, I still don’t carry it with me. Even if you don’t cut it up, at least don’t carry it in your wallet! Find some way to not use that credit card.
In the mean time, keep making the payments that you’ve agreed to under those hardship programs. Try and pay more to each if you can, even if it’s just $1 more. Throw any extra money you have at the credit card that’s still open to try and improve your credit rating.
You’ll be graduating soon, and possibly moving and applying for apartments. This is worrisome, because your credit rating is probably shot, and rental agencies will likely do a credit check. Pull your credit report from at least one of the agencies, and also your credit score (get a free one month trial of Score Watch, just make sure you cancel it before the 30 days are up!) This will allow you to see how these credit cards have affected your score.
That’s about all I can offer you, I wish I knew more to tell you. Maybe some of the other personal finance bloggers that happen by here will have more advice to give?