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Dave Ramsey says: Better late than never in paying off credit-card debt

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Dear Dave,

I have a credit card that I haven’t made a payment on in almost two years. The debt has been sold a couple of times, and now a collector is saying I owe $1,200.

The original amount was $500. I’d like to work something out, but I can’t afford $1,200. What should I do?

— Luanne

Dear Luanne,

They’re asking for $1,200 because they’ve added things like interest and late fees. They want to make as much money as possible on an old debt they bought for pennies on the dollar.

If you can afford $500 right now, ask if they’ll accept a one-time payment to settle the account.

Get it in writing if they accept the offer, and don’t give them a penny until after you get a copy of the written agreement.

Once you have the agreement in hand, send them a money order or cashier’s check for $500.

Do not, under any circumstances, give them electronic access to your bank accounts.

You waited too long to take of your obligation, Luanne. That made things more difficult and more stressful than necessary.

I’m glad you decided to do the right thing, and clean up your mess, though. Better late than never!

— Dave

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