Delinquent Credit Card Payments May Lead to Inadvertent Opportunity

Delinquent Credit Card Payments May Lead to Inadvertent Opportunity


My financial prowess has been anything but impressive. I decided to attend a private school in Florida, rather than NJ, which effectively set me back close to $200,000 in student loans. That decision has turned my finances upside down and has forced me to make other stupid decisions, simply to offset the monster debt I currently have. However, I’ve been able to get a handle on my current debt and one of the ways I am now able to manage this mountain, was to negotiate with my current debtors.

One of the credit cards I was able to get approved before while I had a good FICO score was the Citi Diamond Preferred Rewards Card. I had originally applied for this card because I wanted to transfer my $2,000 balance on my Capital One card to this card as it offered a 0% APR intro offer on balance transfers. I was successful at the time and simply made minimum payments for a few months because that was all I could afford. Then, as I continued to fall farther and farther behind on my monthly payments for other debts, I made yet another stupid decision.

I took a $900 cash advance on the credit card and that still wasn’t enough. As if the cash advance was stupid enough, prepare yourself. I then made a “fake” payment of $1,000 on the card by submitting an electronic check that I knew wouldn’t be good (because I had no money in my bank account) and because the payment reduces the amount of my credit card balance immediately, I was able to take another $900 cash advance before Citi became the wiser. So once they realized the transaction had non-sufficient funds, the balance on my $2,800 limit card was just over $4,000 (with fees).

By no means am I justifying my decision but for me the rent was more important than the $200 or so in fees I accumulated as a result of my stunt. This also meant that my new Citi minimum payment would be over $1,000 as I was forced to pay back the entire overdue amount immediately. There was no chance of this happening, so after 2 months of non-payment, the account was closed, and I had a balance of $4,400. How in the world was I going to get out of this one?

Luckily for me, my financial situation improved over those months where I did not make a Citi payment and with a little extra saved up, I decided to see what Citibank and I could do to resolve this terrible situation. I called them up and found out about an excellent opportunity I took advantage of right away called a “match payment”. Citibank offered to match any payment I made, up to $599. The rep took a check by phone payment, and two weeks after it cleared, the additional $599 would be credited to my account. This brought my balance down to $3,200. Not bad.

When the next bill came in, I called Citi once again and asked if I could take advantage of another match pay, which they justifiably laughed off. They did however; offer a 12-month payment plan, where I would only have to make minimum payments of $100. The added bonus of this plan was that 0% interest would be accruing on the card AND I would not receive any over limit fees. I signed up as fast as I could, and as you can see from the credit card statement I have scanned, I’ve been able to reduce my credit card balance from $4,400 to $2,200 in one year, without having to pay a cent of interest.

Unfortunately, the only reason I was able to receive two amazing offers was because my account was severely delinquent. There is absolutely NO guarantee that if you are having the same problems I was, the same offers would be made available but when a bank sees you as a potential loss, they will offer partial forgiveness to receive at least some of the debt you owe. The next time you ignore the creditor calls or the late payment calls, think about the opportunity to negotiate with your creditors to save some money.

This guest post comes from Michael, a contributing editor of the Dough Roller, a personal finance and investing blog.  

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