Paying $176/month in interest - how do I lower that number?

[notfred]

A couple months back, I was 2 days late getting a payment to AmEx. They decided that was good enough reason to raise my interest rate from 10.99% to something much higher (forget the exact #, but roughly twice as much). I was previously paying about $60/month in interest on a rather large balance I have, and for the past couple months, I've been paying about $175 in interest every month. Does anyone know of a way to lower the amount of interest I pay every month? Those debt conolidation services or something? I really don't care to lower my minimum payment every month, or consolidate anything, I jsut want to pay a lower interest rate on this bill (about $8500).

 

[yakko]

Reduce the amount of the principle.

 

[notfred]

Thank you oh wise one, I never would have thought of that

 

[dman]

I really don't care to lower my minimum payment every month, or consolidate anything, I jsut want to pay a lower interest rate on this bill (about $8500).

Why don't you apply for a new card somewhere and xfer the balance then. Or take out a Home Improvement loan? Let me guess, your credit is lousy and you can't get a new card and you don't own a home? You might be able to launder your debt a little if you have another card that can xfer the balance too with a lower interest rate? Careful of possible xfer fees though.

Thank you oh wise one, I never would have thought of that

You really didn't leave that many options. Sounds like debt consolidation is about it. You can try calling AMEX and see if they'll lower your interest rate back down because of the issue you mention, sometimes cc companies have a forgiveness policy. If they say no, tell them you will xfer the balance elsewhere then-- you got one of those nifty offers for x.9% for 6mo's, etc. Then close the account -- but you'll still have to make payments.

Then write them a letter explaining how you are a good customer and have been making all your payments on time, etc. They may credit you back some down the road in order to win your business back.

 

[kranky]

I suppose you could call AmEx and ask for your old rate back, but don't hold your breath. Many card issuers are using this tactic as a way to raise income. They advertise low rates in big print, then in the fine print they reserve the right to jack up your rate if you pay late.

They will do this more often with people who have high balances and a credit history that might make it difficult for them to move their balance to another card.

That will be your best option - hope someone sends you a preapproved card solicitation, take it, and move your AmEx balance.

 

[StageLeft]

You could consider getting a new credit card if you can get a limit that high. Most will have a very low entry rate intended for you to move debt over from one account to the new one.

 

[notfred]

I got a "preapproved discover platinum card" thing in the mail about amonth back. 0% interest for 6 months, no balance transfer fee, etc. Like a dumbass I threw it out. Then, I tried applying for a discover card, and was rejected on the grounds that I had no home phone # (I only have a cell phone). I think I may jsut try to find another decent card, but I don't really know who to apply with. I will try contacting American Express, too.

 

[RossMAN]

If you have excellent credit (FICO score of 700+) and a good DSR I would get a home equity loan or get another credit card which features a LOW balance transfer APR. Some cc's are offering 3.9% on balance transfers.

If it's any consolation I pay considerably more than $175 a month in interest alone.

 

[dman]

If it's any consolation I pay considerably more than $175 a month in interest alone.

If it's any further consolation... We just bought our new home. -- Anyone who has a new mortgage is probably paying more than that in interest... like 90% of your payment goes to interest, at least in the beginning. Still better than an apartment though, at least some of the mortgage payment goes towards something.

 

[RossMAN]

Originally posted by: dman6666

If it's any consolation I pay considerably more than $175 a month in interest alone.

If it's any further consolation... We just bought our new home. -- Anyone who has a new mortgage is probably paying more than that in interest... like 90% of your payment goes to interest, at least in the beginning. Still better than an apartment though, at least some of the mortgage payment goes towards something.

Knowing that doesn't really make me feel any better, why?

I'd much rather owe $150k on a mortgage and own a house, this is what I call "good/responsible debt".

Instead I owe probably $40k+ on a new car plus misc loans/credit cards which all started and snowballed since I got my first cc waaaaaaaay back in 1994, ever since then it's been a downhill adventure. This is what I call "bad bad Ross is an irresponsible idiot debt".

 

[Ameesh]

$60->$175 isnt double its almost triple and your probably not gonna have a good credit score if you defaulted on a CC

if you are in a house one option is to roll your credit card debt into the house payment buy doing some refinancing, that way the interest you pay is tax deductible and the cc 's get off your back.

the second option is a debt consolidation place they can consilidate all your bills and make you pay out over a long period of time.

 

[notfred]

Originally posted by: RossMANKnowing that doesn't really make me feel any better, why?

I'd much rather owe $150k on a mortgage and own a house, this is what I call "good/responsible debt".

Instead I owe probably $40k+ on a new car plus misc loans/credit cards which all started and snowballed since I got my first cc waaaaaaaay back in 1994, ever since then it's been a downhill adventure. This is what I call "bad bad Ross is an irresponsible idiot debt".

I feel similarly, but my debt is under 1/4 of Ross'

 

[rudder]

do what dman6666 said. Apply for another card. There are tons with 6 month very low apr and then some guaruntee the low apr on transferred balances. Do that then cut up the card so you don't touch it. Since if you make a purchase on it, any money sent in will go against the transferred balance at low interest and not the higher interest new purchase.

Once you have the new card in hand, you can also call the current crd issuer to negotiate. Tell them you will transfer the balance if they do not lower your rate. $60 month is better to them than $0 so they may even do that.

 

[madthumbs]

Transferring the balance to a lower card is a good idea, but it sounds like you have a problem with credit and having the increased credit may pose a problem. What you can do is call the card issuer and request a lower interest rate, and a freeze on spending with it. Tell them you are having problems paying it, and are considering declaring bankruptcy if you can't get it manageable. I've heard of people paying off less than they owe by offering to pay in full a much smaller amount, or threaten bankruptcy (something is better than nothing). Me?... I'm living debt free and can afford to buy what I want with cash because of it.

 

[Hoeboy]

have you tried calling them and negotiating on lowering the apr yourself? if you're a student, take out a student loan and pay off the debt or part of it. i have heard that student loans are so easy to get that it's not even funny. plus they're interest free until you leave school, or at least some loans are.

 

[Hoeboy]

<<Knowing that doesn't really make me feel any better, why?

I'd much rather owe $150k on a mortgage and own a house, this is what I call "good/responsible debt".

Instead I owe probably $40k+ on a new car plus misc loans/credit cards which all started and snowballed since I got my first cc waaaaaaaay back in 1994, ever since then it's been a downhill adventure. This is what I call "bad bad Ross is an irresponsible idiot debt". >>


OMG Rossman. Whenever I needed financial advice, you were the man. You were my financial idol but wow. I didn't know you were in that kind of situation



BTW notfred, what is your annual income? Don't go all out and try to apply for all these new cards. Even though the pre-approved ones may sound great, they don't usually give you a specific credit limit. Even if you apply and get the card, they might give you sh!tty limits because of your income. I have a FICO score of 700+ and perfect credit history yet I make chump change so I've been denied for most loans. I've even been denied when I tried to reactivate one of my old credit cards

 

[RossMAN]

Originally posted by: Hoeboy
<<Knowing that doesn't really make me feel any better, why?

I'd much rather owe $150k on a mortgage and own a house, this is what I call "good/responsible debt".

Instead I owe probably $40k+ on a new car plus misc loans/credit cards which all started and snowballed since I got my first cc waaaaaaaay back in 1994, ever since then it's been a downhill adventure. This is what I call "bad bad Ross is an irresponsible idiot debt". >>

OMG Rossman. Whenever I needed financial advice, you were the man. You were my financial idol but wow. I didn't know you were in that kind of situation

I'm so terribly sorry that I let you down, not

 

[wyvrn]

Drop monthly services you don't need for a while. Cut the cable modem, cable TV, mag subscriptions, etc. Then cut back on other luxuries, like entertainment and clothing expense. If you are lucky enough to get another card, it will lower your interest rate but not your debt. You still need to have more money each month to get ahead on your payments, else all other planning means little. Sucks, but we all learn credit lessons the hard way, it seems.

 

[Shelly21]

Originally posted by: wyvrn
Drop monthly services you don't need for a while. Cut the cable modem, cable TV, mag subscriptions, etc. Then cut back on other luxuries, like entertainment and clothing expense. If you are lucky enough to get another card, it will lower your interest rate but not your debt. You still need to have more money each month to get ahead on your payments, else all other planning means little. Sucks, but we all learn credit lessons the hard way, it seems.

Yeah, And I agree with what other people had said. Get another card, use your mom's home phone number.

 

[Platinum]

If your credit score is still above 700, you can try to apply for Juniper card with 7.9% for the life of the balance and no transfer fee.

 

[notfred]

One: how do I find out my credit score?

Two:

Originally posted by: wyvrn
...Cut the cable modem....

haha, $176/month isn't THAT much

I will call Amex.

 

[Hoeboy]

I think the second to worst thing you can do now from declaring bankruptcy is to apply for even more credit. That may be the easiest and immediate solution but how would that look if you're already 8,500 in debt and are trying to get more credit? Creditors can't read your mind so when they see on your credit report that you owe 8,500 and there are numerous credit inquiries, they'll just assume you're desperate to spend some more. I think you should try to find another solution before taking into consideration what people have said here.

 

[Platinum]

Originally posted by: notfred
One: how do I find out my credit score?

You can get a fairly accurate score from this site
Link

 

[ElFenix]

your fico score is maintained by equifax

 

[StageLeft]

OMG Rossman. Whenever I needed financial advice, you were the man. You were my financial idol but wow. I didn't know you were in that kind of situation

No! You want credit advice rossman is the guy. You want financial advice and I'd point you to vi_edit.

In regards, notfred, to getting your credit score do what rossman got me to do which is go to equifax and signup for the 30 day thing. It's $70 for a year but if you cancel within the 30 days it gets cancelled. This will tell you your credit history and FICO score and all the good stuff. I did it a few days ago and a couple guys at work followed suit.