In a recent Fortune Small Business article, a reader asks: I am a small business owner (S-Corp) with over $100,000 in credit-card debt. Due to sharp drop in home sales and lack of cash flow, we are having a difficult time paying these credit cards. Being a business owner, I am looking for a program to combine and pay these cards off without having an adverse effect on my credit score. Your advice in this matter is greatly appreciated.
"The first thing you should do is STOP using the credit cards," says Michelle Dunn, collection expert and author of The Ultimate Credit and Collection Handbook. Then "call each credit card company, cancel the cards and set up a payment plan."
It’s imperative that you are the one who cancels the card, before you become past due on a payment and the credit card company beats you to it. Closing accounts at your request will result in a higher credit score, says Dunn.
Also, communicate. Don’t be afraid to call the credit card company to set up payments, and let them know you are in trouble.
"Most times when you cancel a card, they will give you credit on some fees, interest charges or other things that contribute to your high balance," says Dunn. "Most companies will not do this unless you cancel the card."
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