I have a major problem. When I was in my late teens I moved out on my own and got approved for two credit cards. Of course not thinking ahead I maxed them both out and beyond that point. It is now several years later and my 23% interest rate credit cards still exist with a combined total of about $6,000.00.
I haven't used them in about two years now. I have a very strict budget and only can afford to pay about $10.00 over the minimum payment due. But with the interest rate being so high it doesn't seem to make a difference what I pay on them I can never get ahead.
I really want to pay this dept off! I want to buy a house so badly, but with my credit being so bad I feel like that is never going to happen. I have tried calling my credit card companies to lower the interest rate but they are not very helpful. What can I do? I need advice so badly, please help. Thank you.
Congratulations on stopping your use of the credit cards! That is the first step in getting out of debt. If I were you, I would look for a new credit card that will accept balance transfers at a reduced rate. Credit card companies offer this all the time. Just make sure that the reduced rate is for the life of the transferred balance, not just an introductory period of a few months. I just got an offer from my credit union to transfer balances for 8% for the life of the balance. If you have made regular payments on your credit cards, then your credit should still be good.
A good starting point would be your bank or credit union. You could also ask your friends and family to keep their eyes & ears open for you for any similar offers they receive and then you could call the company and apply.
Good Luck! If you stick with your budget, I know you'll have success. (02/19/2005)
Either, 1. Get one very low interest card to transfer the two accounts onto, and pay onto the one what you are currently paying the two, pay it off completely. OR, 2. Pay 15 over minimum on the lowest balance until paid off (5 over minimum on the higher balance), then put that total (paid off card payment + regular payment on higher card) towards the balance left on the remaining card. It might take a couple of years, but you will save your credit.
There are many credit card companies that give an introductory period of three to six months without interest. I suggest that you switch the entire balance often to one of these companies, and keep paying anything you can afford. (02/20/2005)
How about contacting a debt-relief program? We were in a similar situation (to the tune of $8000). I called Consumer Credit Counseling Service. They were really friendly and helpful. They contacted the credit card companies and got most of them to reduce the interest. We paid $40 a week until it was paid off. It took 5 years but it was worth it. Five months after paying off credit cards, we qualified for a Rural Development loan and now live in our own home. I don't know if this company is available in your area, but there may be similar ones. Good luck and hang in there, it will get better. (02/21/2005)
Please call Genus Credit Management at 800-955-0412. Genus Credit Management is a not-for-profit credit counseling agency, offers free debt management and educational programs that help financially distressed families and individuals effectively manage their finances. Our clients are asked to make a contribution to AFS-Genus if they can afford to do so. All contributions are voluntary.
If any company indicates a handling fee - DO NOT USE THEM. Genus Credit Management has been around for 20+ years - longer than 95% of the companies out there that say they can help you reduce your debt.
Trust me - I've been in banking for over 25 years, and I refer clients to this organization! Cindy (02/22/2005)
For sure transfer the balances to another credit card with lower interest. You've probably been bombarded with credit card offers from other companies like my teenage son was once he started using his credit cards. He also went over the limit on his, and is in the same situation. I transferred his balance to another lower interest card, cut up the cards and he paid his off in 6 months. (03/06/2005)
The key is, even if you only pay the minimum (or $10-$15 over), do not decrease that amount as the balance goes down! Credit card companies WANT you to only pay the minimum, that's why they make it so low and decrease it as the balance decreases. Keeping your payments level (even at the minimum payment when you first start on the program), you'll pay them off much faster.
Go to www.cheapskatemonthly.com or bankrate.com and use their calculators. Good luck. (05/29/2006)
Does anyone know if I can call the credit card company and ask them to apply my monthly payment to the higher interest rate on my card? I have a promotional rate and a high regular rate. I would like to pay the higher one off first but they always apply it to the lower rate first. (12/06/2006)
Andy, you should try to call your company and ask them. If they won't do it, then find a new company. I recently changed companies and went with Capital One and have been very happy with them (so far). (12/06/2006)
If it is a good card company they will work with you in order to keep your business. Last year our card company raised their yearly fee to almost double. I contacted them and told them I wanted to cancel my card, they asked why and I told them. They agreed to reduce the yearly rate to back to where it was before so I would keep the card. Doesn't mean to have to continue to use the card, cut it up! They won't know, they will think as long as the account is open that one day you will use it again, but in the mean time you will save a little money. Then when it is totally paid off, cancel the card. (12/06/2006)
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