As I have mentioned many times, our interest rates (19.24, 14.24, 11.99, 9.74) on our CCs are part of the problem with our snowballing. We pay soooo much in interest, it is hard to have extra to pay on the principal.
Last year, I tried to get the 19.24 reduced. End result....not only did they not lower the rate, they cut my credit line by about 6,000 (at that point, my card was $189 from the limit). I was told this was for my own good.
Fast forward to today. Our CC4 has a balance transfer offer of 2.99% for 6 months (of course, it also has a 5% fee!!). But even after the transfer rate expires, it would revert to 9.74, which is WAY lower than 19.24!! We are leaning toward transferring about $6800 (which would bring us to $7140 with the fee....the limit is $7300).
This would leave CC1 with a balance about $9000. Should I call them again and try and get the rate reduced?? The debockle was last July. No late payments, and most months I paid over the minimum (which isn't easy when the minimum was at almost $500!!!). Even if they lower it to 17.99...that is something. I would love to see it in the 15.99 range, and then maybe try again in 6 months.
I am just afraid that they will screw me again. Since July, I have paid about $2600 to this card in principal, which again, isn't easy when you get slapped with $300 in interest every month. So I would hope that they would see I have been really trying.
Additionally...I also had the thought to transfer that $9000 to CC2, which will put it at about 85% capacity. But the interest rate on that card is 11.99, so I am still saving some (minus the fee). My concern there...this is G-man's card (from pre-marriage) and as the primary income provider, will "maxxing" out his card be bad?
Another thought...call CC4 and see if they are willing to increase the limit so I can transfer more to them.
OK bloggy friends.....thoughts????
In my opinion, don't do any of it. If you are really concerned about interest rates being the challenge to getting your debt paid off, call your local consumer credit counseling service. We did it and it made a HUGE difference! We had CCCs negotiate our interest rates and the highest we pay now is 9%. I'm thankful we did it because one of our cards has upped their default rate to 50%!
ReplyDeleteI say this because if you really want to get out of debt, this is the fatest way to do it. Credit Card companies are now looking for reasons to drop your credit limits so you will default and go over limit - thus allowing them to raise your interest rates.
Your comment about hoping the credit card companies " would see that you have been really trying" concerns me. You've got to look at those guys as the snakes they are. They don't give a rat's behind about you, your situation, how much you've been trying. All they want is to make money off of you and the more you divulge to them about your "trying" gives them ammunition to raise your rates - knowing you're struggling and wanting to pay it off! Don't play the shell game... just cut up the cards, call CCCS, its one payment (not a debt consolidation loan) and they do the haggling..... for me, it was huge to have the burden of haggling, keeping track and trying to stay on top of it, removed from me. I didn't realize how much time I spent analyzing, managing balances, etc. Now, I'm cash/debit card only and send a check every month, knowing I'm paying pennies on the dollar for interest!
Hang in there! Keep plugging away!
If you go to CCC, go to Greenpath Debt Solutions. http://www.greenpath.com/
ReplyDeleteIts non-profit and if they think you are better off not consolidating they will tell you. CCC is tricky, it can actually hurt your credit almost as much as a bankruptcy. Do research into alternatives first before doing the CCC, its a short term remedy, not a long term solution.
This guy has a good pro/con take on it.
http://www.debt-tips.com/blog/item/debt-settlement-pros-and-cons---the-real-truth-from-somone-who-s-been-through-it-2
or
http://tinyurl.com/2fahmdp
Thanks for the suggestions. I am not really sure CCC is right for us. I am very afraid of backlash from all of it, and would kick myself if there was something I could do on my own that would have prevented it.
ReplyDeleteI would search some 0% balance transfer offers, we get those in the mail all the time. But you can look them up online. It's well worth paying the transfer fee than the interest rate for us. Good luck! You can check out my blog as well eating debt one bill @ a time. It's on blogger. Just started it! I am new at blogging.
ReplyDelete@Eating Debt...welcome to the PF bloggie World!
ReplyDeleteI am trying to not open another credit card. With our balances, it is likely to be a lower limit, and not worth the credit hit. And I am glad you are still getting 0% offers....we haven't seen those in forever.
Can't you just settle with them? You know tell them that you can pay them an amount and then close out the card? my friend did that just a few months ago. It is so hard being in debt. We are plugging away at a student loan. YUCK. Have you called into Dave Ramsey's show?
ReplyDeleteJust wanted to follow up about the "threats" that CCCS will ruin your credit. We've been in CCCS for about 18 months and will be debt free this Fall. I have pulled both our credit reports and there is only one account that mentions the account is in a Debt Management program. There was nothing negative to our credit scores because we are paying down our debt faster (lower interest rates) and its paid on time. I'm so over worshipping the FICO score. It isn't a measure of anything other than if you are a good customer for lenders - which basically tells them how much money they can make off of you! Like Dave Ramsey says, "when you are paying cash, no one cares what your FICO score is!" Dave doesn't even have a credit score!
ReplyDeleteKeep on keeping on! Best Wishes
I totally agree about not worrying about the credit score, or doing anything with that in mind at all. I would go with whatever method gets rid of the debt the fastest. I would only say that cc companies will not negotiate with you unless you are already late and not paying at all -- and I almost have to wonder, how much interest have you paid over the years compared to the original amount you borrowed?
ReplyDeleteI would almost never advocate not paying a debt you owe, but if you really don't plan on living on credit anymore... You might consider doing what you need to do to get these guys to negotiate with you. Keeping in mind that you'll need the amount in cash to ultimately settle.
I can't believe I'm even suggesting this, but what if you stopped paying on one of the cards, put that payment aside, then negotiated with them for a lower balance to get rid of the debt altogether and -- wa-la! -- you pay it with the money you've put aside. It would take discipline not to spend that money, and of course you can't count on what the cc company would do, and it would be a PAIN... But what if it worked? It just seems like you guys have already paid so much in exorbitant interest fees. Just a thought...