Goal Update: Our Journey Toward Credit Card Debt Relief and Financial Freedom

Following a debt management plan (DMP) to get out of credit card debt takes diligence. Communicate with your financial adviser regularly.

As of today, we’ve been involved with our debt management program (DMP) through AAA Fair Credit Foundation for three full months. For the first two months, everything went beautifully … or so we thought.

About three weeks ago, I received a letter from one of my credit card companies, Chase, saying I was late on a payment. The notice said that if I was late again on another payment, my account would be removed from the debt management program (DMP), and my interest rate would return to whatever ungodly amount it was at before we started the program.

Obviously there’s been a miscommunication, I thought. So I notified Karen Hills, our AAA Fair Credit Foundation certified personal finance counselor, and she looked into the matter for us.

It turns out that we were late on the account in question.

What Went Wrong

When we set up our debt management program (DMP), we said that we wanted our payment to be withdrawn from our bank account via direct deposit on the 20th of every month.

Now, when the amount is withdrawn from our bank account, AAA Fair Credit Foundation holds the payment for a few days to make sure it clears. Then it uses the lump sum to pay each of the credit cards enrolled in the program. So all of our credit cards’ payments are paid about 10 to 20 days after the money is withdrawn from our bank account.

The problem was that my Chase credit card (and we discovered Mr. Man’s Care Credit credit card) had a payment due date too close to the date when the money is withdrawn. So basically what happened is that Chase showed we paid twice in January but not at all in February. The way the payments were set up, if we continued this way, we would be consistently late unless we moved up our credit card payment due dates.

Obviously, I moved up my credit card’s payment due date to earlier in the month, but the change doesn’t go into effect until May. So, I have to pay an extra $140 toward my Chase credit card until May.

Unfortunately, Mr. Man’s Care Credit card wasn’t so easy. (Care Credit cards are credit cards for dental services and healthcare services.) They wouldn’t let him change his due date as part of the terms for their agreement to the debt management program (DMP), so Mr. Man is carefully monitoring that one on a month-to-month basis.

So, slowly but surely, we’re getting closer to financial freedom.

Soapbox Alert

If at all possible, don’t ever get a Care Credit credit card.

I made the mistake of opening one to finance an $800 deep cleaning. (I needed all four quadrants of my mouth done.) I always paid my payments on time and I paid slightly over the minimum payment every time, so I was stunned to find suddenly one month that my interest rate was 24.99 percent!

I, of course, called immediately and was told that the interest rate hike was part of the agreement (in some fine print somewhere) if I failed to pay my balance in full by such-and-such a date.

Clearly, I was ticked, but it motivated me to hurry up and get my Care Credit credit card paid off as fast as possible.

The other disconcerting red flag about Care Credit is that no AAA Fair Credit Foundation representative ever gets a hold of them easily. In fact, Karen said in an email, “I’m concerned about this account.  I can’t ever speak to anyone when I call, we have to leave a message and sometimes it takes several weeks before they return the call.”

So yeah, Care Credit credit cards suck. Don’t open one. If you need dental work or health care, you’re better off using a regular credit card.

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2 Responses to Goal Update: Our Journey Toward Credit Card Debt Relief and Financial Freedom

  1. Ohio Reader says:

    I think that this information is great. I am majorly struggling with some credit card balances I racked up in college and the few years post college. It seems that your rep. at AAA Fair Credit Foundation is very helpful. I’m definintely considering contacting this organization to see if they can help me out of this hole. Thank you!

  2. Laura Lee Bloor says:

    Thanks, Ohio Reader! I highly, highly recommend AAA Fair Credit Foundation. Our representatives are Jenna Innis and Karen Hills. Jenna helped us get enrolled and answered all our initial questions, and Karen is who we stay in touch with whenever we have any questions or want to check in on our progress.

    I was exactly in your position — and even more so once my husband brought his own debt to the table. This is by far the best decision we’ve made to take back control of our finances. Don’t let the credit card companies get away with charging you 20 to 30 percent APRs! It’s just awful!

    We’ve been in our debt management program nine months now and we’ve paid off almost $5,000 of credit card debt already! Only roughly $20,000 more to go! Here’s the AAA Fair Credit Foundation’s website: http://www.faircredit.org/ for more information. Or feel free to contact me if you have any more questions I could answer for you, I’d be glad to help, Ohio Reader!

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