Crawling out of the self-inflicted financial hole...

To make a rather long story - a story which includes bounced paychecks, unemployment, an evil paper which didn't think freelancers should be paid - yes, an epic disaster more than four years in the making, I am finally regularly employed. It's an usual situation in the journalistic world, the job is actually stable and safe.

During those four rotten years, I had to do a lot of living off credit cards. If you want to yell at me about how stupid that is, shut it. When you have a family and need to feed them, keep the vehicle running, you do what you have to do.

In a way, this is like waking up from a really bad dream. It's getting myself back into paying close attention to my finances, getting my checkbook balanced to the penny again, knowing I actually have money to pay bills instead of playing the who gets paid this month roulette. As in, I was sorting and filing paperwork today and the ridiculously high interest rates on these accursed cards just set me off. So here's my question: How open are credit card companies to cutting the interest rates on cards? What really burns my ass is the monthly statements with the stupidly high rates come with the "Because you're such a valued customer, here's these checks you may use at 2.99 percent."

Screw that, just drop my rate on what I owe you.

I do have a plan in place, am working a second job, and I will get the cards paid off. I'm just looking for success stories or reasonable ideas to approach these card companies about dropping the damned rate, especially in light of the financial disaster the country is in right now.

 

I've heard that if you call and beg and plead enough, they'll drop them -- at least temporarily sometimes. I have yet to try it myself though.

Good luck, mudduck, and congrats on being able to think about getting back on your feet.

 

You can go old school and just suffer through seven years of bad credit from the time they charge you off.

 

That's the whole stupid thing about this. I have excellent credit. Just have large balances on the credit cards which need to be paid off.

 

contact a nonprofit consumer credit counselor and see about consolidating the debts and for a lower interest rate.

 

Call them and tell them to reduce the interest rate, or you'll transfer the balance to the 0% offer you got in the mail yesterday.

In the meantime, http://www.daveramsey.com .

 

If you have a good credit rating, stay away from consumer credit counseling. No need to pay a monthly fee for something you can do. Call each card and negotiate.

 

Since you have good credit, rotate debt to a "teaser rate" card every chance you get and kill all the cards until you have just two. A high-balance option for catastrophic needs (don't keep a balance on it, obviously) and a month-to-month low limit card with a rewards program you pay off every month. And buy all your electronics on the low-limit one to skip the useless extended warranties, since Mastercard and Visa will offer essentially the same warranty gratis.
My thinking on said card limits? $20k for the high limit, $2k for the low. Anything that will cost me more than $20k up front will mean a life-altering world of hurt anyway.

 

Congratulations.

Yes, by all means try to negotiate your rates down. Also, as suggested, consider transferring balances to new cards with lower rates.

That said, however, this is a terrible time to be trying this. The Wall Street banking implosion means that the credit card companies are in dire straits themselves, and the days of getting them to lower your rate as a matter of course are long gone. Also, be advised that the slightest screw-up - late payment, nsf payment check, over credit limit, that kind of thing - now automatically defaults you to the most punitive interest rates allowed by law. Across every card you hold.

The best way out of a jam like this is to be absolutely scrupulous about paying the cards down. Pay the bills the day they come in. Pay as much as you can possibly afford beyond the minimum. Don't use the cards while you're paying them down. You're done with credit cards for a while. Don't use a debt consolidation service if you can avoid it, either - it'll hurt your credit rating.

Good luck.

 

Similar long story:

Company I worked for in computer operations relocated across the country, and invited me to go, with a promotion and raise.

So I went. Bought a house. Took our newborn.

Three years later, they laid me off for no other reason than I automated my job away (They promised me before the move that I would move into another department once I was finished automating my job away).

The company was non-profit, and had no unemployment insurance.

Couldn't find a job anywhere (mainframe computers were a dying breed and I had a high school education, though I worked my way up in this company for 10 years. In fact, was laid off the day after I received my 10-year plaque).

Maxed out the Visa driving my wife and now 3-year-old 5,000 miles across the country to live with mother-in-law and evil step-father.

Went through hell physically, mentally and emotionally while working as a graveyard dishwasher at Denny's.

Went back to school, earned my AA and four years after the layoff, finally landed a job as a sportswriter.

That was 10 years ago. The Visa was written off long ago, though they still send us notices whenever we apply for credit anywhere.

During all that time, though, went through another childbirth, a hysterectomy (wife), gall-bladder surgery (wife), botched root canal and subsequent tooth extraction, broken hand, esophegal surgery, major back surgery and move moving expenses than I can shake a stick at, all trying to find the "right job in the right place".

Sacrificed four years to put wife through AA and BS degrees. She is now just starting her new career.

We're trying so damned hard to turn the corner. But the collection agencies, the attorneys, the overdrafts - they're slowly but surely killing me.

Both my parents and grandparents are gone and were poor anyway. Mother-in-law helps as much as she can, but it doesn't go far.

We keep thinking we're so close to turning that corner - the one where we are caught up with debt and have money in the bank after rent is paid. I was so stoked yesterday because I put my paycheck in the bank and there was still $300 in there. Then today my mood was shot to hell when I got a notice that the rent check bounced.

I actually was in a good mood. I'll never make that mistake again.

 

This is right up my alley.

First of all, let me echo the big fuck you to anyone smug enough to criticize you for going into debt this way...or arrogant enough to think it might never happen to them.

I would call the credit card companies and tell them, nicely but firmly, that the only way they're getting your money is to kill the interest rate. Tell them you just emerged from a few years of hell and that you've got a job and you want to knock off your debts, but you'll get nowhere fast with the interest rates.

They'll ask you about your current income and try to come up with reasons why you don't qualify for zero percent interest. That's right: You finally got a job and they expect you to spend every spare cent paying them off. Don't do it. Tell them, again, you can't pay $500 a month (or whatever it is they're asking) and that you're not going to pay any interest. Ask to speak to a supervisor. Eventually, you'll get to someone whose job it is to just make sure the company gets its money and you'll work out some payment plan, contingent on you never missing a payment. If you miss a payment, they can jack the rates back up to whatever the max is. Just make it a direct withdrawal for the same time every month (mine is the 14th) and always make sure you have at least that much in the acc't on that day.

Take careful note of how long a period your plan will last. In 2005, I was told that I could pay $350 or so per month for 40 months and be done with my debt. Then, a year later, they decided that I needed to notify them of my decision to continue with the plan.

Me: "You never told me that. And why would I want to STOP something that's been working?"
Them: "Well you had to tell us and you didn't so now your interest rates are back to 29% (or whatever it was)."

It took a lot of yelling and cursing and demanding a supervisor to get me back to where I was supposed to be. But I'll be done with the cocksucking bastards--and done with credit cards FOREVER--no later than January (hope to finish them off in December, but may not be able to pay the extra $200 I'd need to make it happen). It's been a great feeling seeing the debt dwindle to triple digits.

It'll be a great feeling for you too. Good luck. You'll get there.

Feel free to PM me if you have any other questions.

 

Sound advice, Sir. Sound advice.