- Understand that different creditors behave differently.
- Review how Chase generally reacts to debt consolidation programs.
- Try the free Debt Coach tool to compare all your debt relief options.
I am drowning in credit card debt. My biggest debt is with Chase. Is there a good Chase Debt Consolidation Program?
I have a lot of credit card debt. The largest debt I have is $12,000 that I owe to Chase. My total debt is over $30,000. I am not able to meet my minimum payments each month. I was late by a day or two on some of my payments and now the interest rates on those cards have been hiked to above 29%! I feel like I will never catch up. Is there a Chase debt consolidation program that would help me get out of debt? I appreciate any advice you can give me. Thanks.
Thank you for your question about your credit card debt, specifically your Chase credit card debt, and whether there is a Chase debt consolidation option or other solution that will help you.
Chase is a full service bank, offering a variety of services including checking and savings accounts, credit cards, auto loans. There is also Chase mortgage department that offers home purchase and refinance loans, as well as home equity lines of credit. As of November, 2018, Chase is not currently offering unsecured debt consolidation loans.
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Communicate with Your Creditors
If you are struggling to pay your creditors, a good first step is to communicate directly with them. Reach out before you miss any payments. In your case, you should call Chase and your other creditors, to see if they offer a financial hardship program. That may give you some temporary relief. Ask for an interest rate reduction or permission to make a smaller than normal minimum payment, so you can avoid suffering late fees or a hike in interest rates.
Chase Debt Consolidation Options
If your credit is in good standing, look into a balance transfer offer as a debt consolidation solution. Use a balance transfer to move as much high interest debt as you can into a lower interest rate account. Be aware that balance transfer offers come with a low, introductory 'teaser rate' that adjusts to a higher rate, after the introductory period ends. It is up to you to know how long the low-rate period lasts and what your interest rate will be after the low-rate period ends. Shop around. There are balance transfer offers that come with no fees, but many charge 3% of the amount you transfer ($30 for every $1,000 you transfer). Chase offers one of the more attractive balance transfer offers, currently offering a 21-month 0% interest period, however, you can't transfer balances from one Chase card to another.
Debt Consolidation Loans
Chase does not currently offer unsecured personal loans, so a Chase debt consolidation loan is not an option. You can shop around for a debt consolidation loan from other providers.
The best rates on debt consolidation loans require excellent credit. Your question mentions interest rate hikes due to late payments, but that doesn't mean your credit took a hit. Creditors don't report a late payment to the credit bureaus until you are 30-days late. The likeliest hit to your credit score is from carrying a lot of debt. If you are using a high percentage of your credit lines, the high credit utilization will ding your score.
If you own a home and have equity, check if a cash-out refinance or home equity line of credit offers a good debt consolidation loan solution. You don't want to treat your home as a piggy bank, but using equity in your home could lower your interest rate or improve your monthly cash-flow while paying off your credit card debt. If pay off debt using home equity you must avoid running up new debt on your credit cards or you will have dug yourself a bigger hole.
Do You Know Your Credit Score?
Your credit score is a key factor in choosing the right debt solution. The higher your score, the more options you will have. Get a free credit score today, with no obligation required.
If you default on your Chase account, or any account with other creditors, and you are unable to work out a solution with them, you will end up in collections. Different creditors handle delinquent accounts by their own policies and guidelines. Even a single creditor may treat different customers differently. However, there are some basic strategies and practices that Chase and other creditors employ with their delinquent customers:
- Most creditors first attempt to collect a debt internally. If not successful, they refer the account to a law office for collections.
- Some creditors use in-house legal departments to collect on the debt, though that is becoming less common.
- In general, accounts are referred for legal collections after they are somewhere between six and nine months delinquent, depending on the creditor.
- Creditors have thresholds for identifying the accounts they decide are worth pursuing by legal collections. The amount owed and the state specific collection laws being primary considerations. Creditors are less likely to engage in legal collections, for example, in states that don't allow them to garnish your wages, such as Texas, Pennsylvania, North and South Carolina.
- Your recent activity on your account can affect the collection process. Some creditors pay close attention to your specific account activity, when deciding whether to pursue legal collections. For instance, Chase, Bank of America, and Citibank pay less attention to recent balance transfer activity or cash advances than do American Express or Discover.
- Eventually, your account may be sold to a debt collector. Creditors that are unable to collect anything after your debt has been contracted to a law office usually sell the debt to a debt purchasing collection agency. This frequently happens approximately 18 to 24 months into the collection process.
Chase & Legal Action
Chase is not known as the most aggressive creditor, when it comes to taking legal action against delinquent debtors, but it is not the most lenient either. Chase usually waits 6 months after the first delinquency before referring its accounts to outside legal collections. Not every account that is 6 months late will be sent to collections. Chase reviews the size of the debt owed, the state collection laws where the customer resides, and whether the customer's employment history and assets make collection likely. Chase currently uses an internal legal department to collect some debts in California, New York, New Jersey, Florida, and Illinois, although it also contracts with outside collection law offices.
Receive a Collection Call or Letter?
If Chase or your other creditors are not willing to work with you, your best debt relief solution may be to work with a professional debt relief organization, such as a credit counseling firm or a debt settlement firm. Before you choose how to solve your debt problem, review each of the available debt relief options and weigh their pros and cons.
Chase Debt Consolidation & Credit Counseling
If you enroll your nearly 30% interest rate Chase account in a credit counseling's debt management program, you can expect to reduce your interest rate significantly. A reputable credit counseling firm will present you a black and white proposal that clearly shows the interest rates for each account you enroll.
Chase & Debt Settlement
Debt settlement could be the best solution for you, given that you are struggling to make your minimum monthly payments. Debt settlement is an aggressive form of debt relief designed to get you out of debt in 24-48 months. The monthly program payment is usually significantly less than your required monthly minimums and also lower than the program payment in a credit counseling program. Read about the pros and cons of debt settlement here.
Bills.com recommends that you look into all your debt relief options before making any decision, in order to weigh each solution's pluses and minuses.
We strongly recommend Bills.com's no-cost Debt Navigator tool. Debt Navigator allows helps easily review all your available debt options, based on the goals and priorities that you specify, giving you a realistic estimate of how long it takes to get out of debt and what your total costs will be.
Dealing with debt
If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q2 2023 was $17.06 trillion. Student loan debt was $1.569 trillion and credit card debt was $1.031 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 8% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
The amount of debt and debt in collections vary by state. For example, in Florida, 29% have any kind of debt in collections and the median debt in collections is $2137. Medical debt is common and 14% have that in collections. The median medical debt in collections is $915.
Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.