How affected will my credit cards be after car repo?
by Author on Saturday, July 31st, 2010 | 5 Comments
I still have three credit cards in good standing. I try to make twice the minimu
payments on them but my car payment and insurance is choking me. I can no longer afford it and do not want to have that bill while I am un-employed and have two children to feed. When they repo my car will the credit cards companies cancel my accounts cause I'm still current with them and never been late or over limit.
Related Credit Card Sites
- I am interested in leasing a car. Any good tips so that i can get a good price? | Pre Owned Cars
- Credit Card Companies Making Repaying Debt Impossible - Fight Back and Eliminate Debt | garyissorry.com
- A Simple Guide to Small Business Insurance | Small Business News, Tips, Advice - Small Business Trends
If you enjoyed this post, make sure you subscribe to my RSS feed!
After car repo, your credit score would be affected and go down. With a lower credit score, the credit card companies would increase your interest rate so you have to pay more interest if you retain a balance. Credit card companies would not cancel your account simply because of repo, keeping your credit card account and increasing your interest rate is the only way they can make more money out of you.
If you’re in good standing with your credit cards, they won’t close/cancel your accounts. Defaulting on a loan from another company has no bearing on your other accounts.
Just don’t get into the trap of depending on the credit cards to keep you out of the hole.
I have to disagree with the first few responders. I have seen friends who paid their credit cards on time as stated in the contract but still had their accounts closed. What happened is they were struggling with other credit agreements, like their car payments, and the credit card companies sent them a letter stating that because of other delinquent accounts, low credit score, etc., their credit accounts were closed. So, my friends no longer had access to the credit lines, but they still had to pay the debts as originally agreed.
So will a car repo affect your good-standing credit cards? Yes, a very good possibility exists that it can.
The moment any of your credit card exceeds the limit or you are late in payment, you will be brought in list of bad credit people. If you are making payment of car loan/insurance through credit card and you fail to repay the amount, the credit card issuing company would place you in the check list and you will be treated as defaulter. Since you are unemployed, I would advice you to use the credit card carefully and use it in emergent circumstances only. We have seen the credit cds holders using it lavishly and when the credit card payment is held up for want of money, the interest on the entire outstanding amount goes high and make the holder of ccards defaulters as they are unable to remit the monthly payment of ccards.
You can use this credit monitoring service to pre-estimate future scores for different scenarios of such payments – credit-report-score.10001mb.com