I have a relative that I am currently trying to help, but I don't even know where to start. She has had a credit card for years that she has had to use off and on...the problem is the interest rate is 29%! She has to make huge payments every month. I know she pays more than the minimum every time, but at this rate, it'll take her a while to pay it off. She says she's tried talking to the credit card company, or finding a card to transfer the balance to, but none of it will work. She tends to be a negative person, so I don't know if she's really tried, or if she just gave up. She has good credit, just not excellent. We rarely use credit cards, so I'm not sure what options there are for her. Thanks for your help!
Good morning Leslie,
I use to work in the bankruptcy field as a Paralegal for over 10 years. In working so closely with creditors and their attorneys, may I suggest that your relative call the credit card directly and request a reduced interest rate. If that person has indeed may timely payments for six months or more and in addition paid more than the minimum due, then the company should reduce the interest rate. Have them call and ask how often they can request an interest rate reduction, i.e. every 6 months of consecutive payments, etc. Also be careful to not open another credit card to pay off the existing one without reading the policy and increasing interest rate after the introductory period! Also, Credit Union's usually offer lower interest rates, so going to them for a small loan to pay off that credit card is a possiblity as well, then the high interest rate credit card can be closed immediately and that person can make timely payments on the new loan and still show good credit.
Be careful of the companies who offer to mediate between the consumer and the credit card company by reducing the debt and then payment is mailed to them and forwared onto the credit company. Many clients tried that prior to filing bankrutpcy and complained that the credit card company never did receive the money the consumer paid to the go between company!
Good luck!
Try looking for a new credit card for her that she can transfer the balance. Usually you can get something with 0% APR for a time period. If she can "chip" away at it during that time the she would save a TON on interest. She could continue to do this until the balance is paid...not a good idea if she continues to add to the balance though.
Hi Leslie.
You have some good advise here, and it sounds like you also have a good head on your shoulders about how to handle it. You mentioned that your relative has good credit but not excellent. Any way that you can do something to change that? Closing some inactive accounts can drop them off the report which may help improve the credit score. I don't know what balance is owed, but on a card with that high of interest rate, I'd say forget trying to negotiate with the credit card holder, funnel all spare funds into that balance and pay it off entirely, even if that means not paying more than the minimum due on others that may exist. Otherwise, the only other things to be done are request an interest rate reduction or balance transfer. If your relative is a long standing customer with this company, you might consider throwing that in as well.
It sounds as though she's asked you for help with this, but not quite given you the reins. If she won't do anything about it, perhaps if you'd ask, she would let you deal with it, then you'd have the full details. While it's certainly not your responsibility, I find that I'm better suited to help someone if I have all the details. Just my take. Hope things get straightened out for you and her.