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Debt Management Plan or call to get lower APR's myself?

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I really need to start getting serious about paying off my debt. I have around 38k, most of which is with B.O.A., Chase, and Discover. My APR's range from 14% - 19%. I have never missed a payment in my life and have decent credit scores (high 600's - low 700's), which I would like to avoid ruining.

I try to pay a little more than my minimum payments, but it is a struggle. I am barely squeaking by every month. I have looked into Care One and their debt management plan. They have an A+ rating with the BBB and I've heard really good things about them. They negotiate with my creditors to get a lower APR, then I make one payment to them each month and they handle everything else. They have a $35 startup fee and a $50 monthly fee (from what I understand). My question is, am I better off contacting the creditors myself to try and get a lower APR or is it worth paying Care One $50 a month to let them handle the dirty work?

If I do go with Care One's DMP, how will this affect my credit score?

If I choose to contact the creditors myself, can anything bad come from it (other than them denying my request)?

Any advice would be greatly appreciated.

It is best to contact the creditors yourself and negotiate for a reduced payment plan. It will help you save the monthly fees. Sometimes, creditors are more interested in working directly with the consumer rather than a third party. Nothing bad will happen. At the most, the creditors may refuse to lower your payments. But you should at least try to contact the creditors and reduce your debts once.

DMP will drop your score initially.

Sub: #1 posted on Tue, 05/08/2012 - 20:32


Your score will tank as you are not paying as agreed. With a DMP, your credit lines will all be closed, adding to the decline in your scores.

Sub: #2 posted on Tue, 05/08/2012 - 20:48

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