Lowering Your Credit Card Debt
It Can Be as Easy as a Call to Your Credit Card Company
While the economy has been improving, let’s face it — it’s still not in great shape, and many people are still suffering financially. Many American consumers with credit cards have seen the interest rate on their cards shoot up recently. And while many may feel like they just have to suck it up and accept higher interest rates and higher debt, we’re here to say — DON’T JUST GIVE IN! Why? Because surprisingly, a call to your credit card company could help alleviate some of your debt.
It might sound crazy, but sometimes the credit card companies will actually work out a deal with cardholders who are struggling to pay their bills. The National Foundation for Credit Counseling was able to work out an agreement with the top 10 card issuers last year to provide relief to those customers who were having trouble keeping up with their credit card bills. That means that more customers have access to debt management programs.
So if you’re finding it hard to keep up with your credit card bills, call up your card company and be honest about your situation. Start by asking them to cut your interest rate — if they comply, it could be by as much as 5-10%…but don’t expect much more than that. You may also be able to get them to waive late fees, or maybe even to cut down the minimum monthly payment.
As a larger, more serious step, you may be able to have them cut off a bit from the principle amount you owe as well. BE WARNED THOUGH — if a card issuer is willing to cut the amount of principle debt you owe, or put you into a debit management program, it may have a negative impact on your credit score. For example, having a portion of the principle you owe forgiven by the issuer can result in your account being deemed a “charge-off” (even if you’ve never been late with a payment), which can hurt your credit score up to 100 points or more! So MAKE SURE you find this information out and get it in writing before you agree to any modification.
The bottom line is — don’t feel like you’ve been left out to dry if your interest rate goes up or you’re in over your head in credit card debt. In some cases, your credit card company can extend a helping hand and help you in your quest to lower your debt.
For more information, check out: http://www.credit.com/blog/2010/11/hardship-could-alleviate-high-credit-card-debt/