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Dave Ramsey is America's trusted voice on money and business, and CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 12 million listeners each week on 575 radio stations and multiple digital platforms. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com. |
Credit cards seem to be a great idea, until you can't even pay your monthly payments. A lot of times your debt will transfer to a collection agency. In these types of situations it usually is in your best interest to accept. Paid in Full? Dear Dave, I've been late on a credit card bill several times, and it was turned over to a collection agency. They have offered a couple of different payment options. If I agree to one of these, does that mean the original creditor gets paid, too? Carter Dear Carter, A collection agency either owns the debt outright, or they’re directly representing the credit card company in these kinds of situations. It’s not unusual for things to be handled this way when someone has defaulted on a loan. Unless you have the cash to make good on the debt outright, I’d go ahead and accept whichever deal makes the most sense for you and your current financial situation. You’ve already got a mark against you on your credit report for having this turned over to collections, so an indication of settlement on a credit card you defaulted on is really no big deal. But here’s my best piece of advice—stop using credit cards! - Dave |
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