Thinking of Asking Credit Card Company to stop charging interest

[EllenFrasier]

Rather than passing judgement on someone who is looking (on the DISboarrds budget board of all places) for help, I decided to honor the request to look over the letter. Did you read my revision? The way I re-worded it is not extreme. Credit card companies can grant reductions, and there is nothing wrong with asking. If rates can be raised, they can also be lowered. It goes both ways. Maybe, it will be more effective to call, but the OP may be more comfortable writing the letter first.

If the letter is ineffective, it only cost her the price of a stamp. She can then call. People are advising her not to try anything (since she agreed to the terms) or to do something that could hurt her credit. Everyone has a different method for dealing with credit troubles. Those methods may work for them, but it seems like she wants to pay the balance down without hurting her credit. While I would never ask a company to waive my interest completely, I do not see any harm in asking for a reduction.





To the OP:

I repeat what I said in my first post. Exhaust all efforts to lower your rate yourself before you look into other methods. Good luck. Take all of the negative comments on here with a grain of salt. No one here knows your full situation, and you are trying to pay off the cards rather than walk away from them (without paying some interest, people consider that walking away too).

The company cannot waive all interest without affecting your credit (most likely). Anything you pay back today (due to inflation) is worth less than it was when you borrowed it (the whole reason for some interest, although huge interest rates are more for huge profits). The opportunity cost (what could have been done with the money had the company not loaned it to you) of giving you that loan makes interest necessary to run a successful business. It is capitalism at its finest (as others have metioned).

Thank you, I did read your revised edition of the letter and will revise mine accordingly. I just didn't respond because I just about gave up on finding any helpful replies as the majority, not all, have been more about criticizing our family for having credit cards and using them and then finding ourselves in a bind.
You all have no idea what we spent the money on with those credit cards. It was not a trip to WDW that's for sure. Nor was it extravagances of any kind - just everyday purchases like clothes, gas, etc. I will not list everything we bought, but they were necessary.
And for the person who accused another poster of being me and creating a new account so they could post things that were supporting me - if that was support, then no thanks!
For those that PM'd me with helpful advice, thank you.
I'm done visiting this thread and have unsubscribed from it.

 

[Janepod]

You mistyped. You said capitalism when you meant communism.

She didn't mistype. She wrote capitalism to correct the OP's spelling, "capitolism." Thus the ellipses before "marx ..." Not saying that Capitalism has been discredited.

That was my interpretation, anyway.

 

[punkin]

You mistyped. You said capitalism when you meant communism.

No. I was correcting spelling for the poster I quoted. Capitalism, not capitolism. The rest of my comment was almost exactly what you said. Sorry for the confusion.

 

[dizzydrop]

So many opinions....honestly I think the cc companies would rather reduce your interest rate than have you file bankruptcy (not that you would but many people do when they can't get out of debt), so just calling and asking them to reduce it may help. Going through a non-profit consolidation service would do the same thing, they just negotiate interest rates just like you can do yourself, and then they charge you a fee for their service even if they are non-profit. They also expect you to make them a big payment each month that they distribute to all your cc's and if you are even a day late they will void your contract and you'll be at step one again. Just call yourself...they will work with you.

 

[DisMN]

Probably should have thought about the interest before you ran up your cards, they are not free money but high interests loans. You could not afford to pay the interest but you could afford to run them up??? Your debt and you need to pay it, unless there are extenuating circumstances that you have not mentioned, no sympathy from me!!

Oh boy you sure told me!

You have no idea what our debt is and as a matter of fact NONE of it is credit cards but it is treated the same as credit debt.

As far as extenuating circumstances there are many but excuse me for keeping that part private as it's really none of your beeswax.

We indeedy doody are paying our debt with interest and will continue to do so. I believe that was the intention of the OP as well so I don't think sympathy was even asked for here.

Boy oh boy the high and mighty...........

 

[DisMN]

Yeah, my husband and I made a conscious decision ONCE to carry a balance on our credit card for a 2-3 month period. We did this because our car died. We knew it was coming, and we'd saved for it; however, when the moment arrived, we realized that we'd saved so much that IF we used that money AND essentially bottomed-out our checking account, we could avoid financing altogether. We had a healthy emergency fund, which we never touched. It also happened to be three weeks before a long-planned vacation and a month before Christmas. We decided that it'd be worthwhile to carry a balance on our credit card for that short period.

That was some years ago, but given the same circumstances, I'd do the very same thing again -- but I hated seeing how much interest we paid in just that small amount of time. I felt very relieved when the 2-3 months were over and we reverted back to paying in full every month. Good advice. Bears repeating.
The wording's a bit harsh, but I'd suggest that when you're thinking, "I have to use my credit card -- I have no choice", ask yourself this: "What would I do if I didn't have this card?" I bet you'll come up with an answer that isn't the end of the world. It might involve altering your plans or doing without something that you want, or it might involve working out payments to the hospital, or it might involve buying something used instead of new -- but it probably isn't something that will be important years later. On the other hand, obviously, paying off the credit card bill IS important years later.

And as I say that, keep in mind that I'm sitting here wearing a pair of pants that I bought at a consignment store for $2 a good 5-6 years ago and a pair of shoes that're literally falling apart (I did order a replacement pair yesterday from Lands' End). This morning my kids packed bag lunches for school, carrying bookbags that're on their 3rd year of use. What's the point? I'm able to pay my credit cards off each month NOT because I have so much money; rather, I'm able to pay my cards off each month because I'm frugal.

And I, with my huge huge debt, sit here in my own tattered tennis shoes (just can't find another pair like these from Kmart. LOVE this pair!)..we shop at goodwill and Kmart, finding Target a bit higher than we like to pay on many items. Our vehicles are hitting the 10-11 year mark and I coupon at the grocery store. When we eat out *yes, we do eat out* we almost always have a two-fer coupon or some kind of discount.
We pick up PENNIES and other spare change and we save that towards fun stuff.
We've always been frugal but even frugal people can have a business that fails, they can weather severe long term layoffs and pay cuts and other glitches in their finances....it would be nice not to be judged for having debt because there are a lot of people like me who have made good decisions and still been hammered by financial hardships.

At one point in our life our house was paid off and we had many thousands in the bank AND we had 401s to boot. That's all gone and let me tell you it wasn't frittered away.

 

[crisi]

No. I was correcting spelling for the poster I quoted. Capitalism, not capitolism. The rest of my comment was almost exactly what you said. Sorry for the confusion.

Silly me

 

[thomas998]

And I, with my huge huge debt, sit here in my own tattered tennis shoes (just can't find another pair like these from Kmart. LOVE this pair!)..we shop at goodwill and Kmart, finding Target a bit higher than we like to pay on many items. Our vehicles are hitting the 10-11 year mark and I coupon at the grocery store. When we eat out *yes, we do eat out* we almost always have a two-fer coupon or some kind of discount.
We pick up PENNIES and other spare change and we save that towards fun stuff.
We've always been frugal but even frugal people can have a business that fails, they can weather severe long term layoffs and pay cuts and other glitches in their finances....it would be nice not to be judged for having debt because there are a lot of people like me who have made good decisions and still been hammered by financial hardships.

At one point in our life our house was paid off and we had many thousands in the bank AND we had 401s to boot. That's all gone and let me tell you it wasn't frittered away.

And people wonder why a lot of use that play by the rules get so annoyed by someone trying to shirk their moral obligations... The sad fact is that everyone is going to get socked with higher taxes to pay for all the bail outs that the government made for people and businesses that weren't responsible.... its a bit like the ant and the grasshopper, only in this story the evil government yanks the food from the ant and gives it to the grasshopper.

 

[kmedina]

And people wonder why a lot of use that play by the rules get so annoyed by someone trying to shirk their moral obligations... The sad fact is that everyone is going to get socked with higher taxes to pay for all the bail outs that the government made for people and businesses that weren't responsible.... its a bit like the ant and the grasshopper, only in this story the evil government yanks the food from the ant and gives it to the grasshopper.

You do not know that. It is awfully presumptuous for such speculation. My DH has a very good job, but that can be a bad thing at times. The higher your position, the harder it is to replace. And, the bigger you are, the harder you fall. His position was elimated after nearly 10 years with the company due to the economy. We live in Vegas and the economy is horrible here. It took him seven months to find a new job, and we were very lucky. Thankfully, I was still working at the job I held for over 11 straight years at that time as well.

With savings and severance, we made it through without any difficulty. Not everyone is that lucky. The unemployment rate was just under 15% here recently, and many hard-working people are going under through no fault of their own. That does not mean they shirked responsibility. As with every situation, there are people who are the way you described. You do not know if that is the situation with the OP or the person you are currently debating with. There are two sides to every story, and I do not like judging people (especially when one does not have all of the available information).

My DH is a very hard working man, and I never thought of him that way you think of people who fall on hard times. Some people just run into bad luck. To those who have, I wish you the best of luck in turning it around. And to you (thomas998), I hope you never fall on hard times. If you do, I hope people are more understanding to you then you've been to them. To those who are the way thomas is describing, I hope you eventually get it together and learn to take care of business.

 

[C.Ann]

Rather than passing judgement on someone who is looking (on the DISboarrds budget board of all places) for help, I decided to honor the request to look over the letter. Did you read my revision? The way I re-worded it is not extreme. Credit card companies can grant reductions, and there is nothing wrong with asking. If rates can be raised, they can also be lowered. It goes both ways. Maybe, it will be more effective to call, but the OP may be more comfortable writing the letter first.

If the letter is ineffective, it only cost her the price of a stamp. She can then call. People are advising her not to try anything (since she agreed to the terms) or to do something that could hurt her credit. Everyone has a different method for dealing with credit troubles. Those methods may work for them, but it seems like she wants to pay the balance down without hurting her credit. While I would never ask a company to waive my interest completely, I do not see any harm in asking for a reduction.





To the OP:

I repeat what I said in my first post. Exhaust all efforts to lower your rate yourself before you look into other methods. Good luck. Take all of the negative comments on here with a grain of salt. No one here knows your full situation, and you are trying to pay off the cards rather than walk away from them (without paying some interest, people consider that walking away too).

The company cannot waive all interest without affecting your credit (most likely). Anything you pay back today (due to inflation) is worth less than it was when you borrowed it (the whole reason for some interest, although huge interest rates are more for huge profits). The opportunity cost (what could have been done with the money had the company not loaned it to you) of giving you that loan makes interest necessary to run a successful business. It is capitalism at its finest (as others have metioned).

It was very nice of you to take the time to make a revision - and offer the OP the support that she's looking for..

So many assumptions - jumping down peoples throats based on so little info.. Seems to be a trend - almost a "sport".. I'm sure there's much more to this story than what the OP has divulged, but being attacked right from the get-go, I don't blame her for walking away from this thread..

OP: If you happen to pop back in here, I wish you the best of luck.. It will take time and effort, but eventually you will get your debts paid off and then start with a clean slate.. You've already learned your lesson about CC companies - they can - and will do whatever they want - with or without prior notification - whenever they want..

Once you reach your goal of getting the debts paid off, don't ever look back.. Live your life with cash and/or a debit card and always, always live below your means.. Good luck!

 

[Disneyhayes]

How is paying off the debt "walking away from it"? I am asking them to stop the interest for a while so we can get the balance paid down. If they want to cancel the cards, so be it. That way we can't use them and add more to the balance. And the terms are not the same as when we first opened the accounts. I think the interest rate on some of these was like 10 or 11% and now it's almost 30% on some of them! The credit card companies are greedy.

I didn't read the responses but you said here that if they cancel the cards then that way you can't use it. CUT THEM UP and stop using them. I work for a major credit card company and you can ask for help. Most companies increased APRs right before the new CARD act went into effect (mine didn't cause they rock!). Have you called to see about lowering the interest rates yet? Canceling your card and cause your score to go down but so can have a maxed out card. On your statement it should show you how long it will take you to pay off the balance if you pay the minimum and how much you would have to pay each month to pay the balance off in 3 years. If it doesn't then the company is violating the CARD Act. The terms are technically the same since you signed onto a card with a variable rate and this is how they could raise it. I would
1 - request a lower interest rate
2 - figure out if you can pay more than the minimum payment. You can even pay a little out of each check on top of the minimum payment each month. McDonalds would be $20 for my family. Once a week for a month is $80 that we put towards bills now that we don't eat fast food.
3 - if neither of the other 2 are options then close the cards and start over.

 

[DisMN]

And I, with my huge huge debt, sit here in my own tattered tennis shoes (just can't find another pair like these from Kmart. LOVE this pair!)..we shop at goodwill and Kmart, finding Target a bit higher than we like to pay on many items. Our vehicles are hitting the 10-11 year mark and I coupon at the grocery store. When we eat out *yes, we do eat out* we almost always have a two-fer coupon or some kind of discount.
We pick up PENNIES and other spare change and we save that towards fun stuff.
We've always been frugal but even frugal people can have a business that fails, they can weather severe long term layoffs and pay cuts and other glitches in their finances....it would be nice not to be judged for having debt because there are a lot of people like me who have made good decisions and still been hammered by financial hardships.

At one point in our life our house was paid off and we had many thousands in the bank AND we had 401s to boot. That's all gone and let me tell you it wasn't frittered away.

And people wonder why a lot of use that play by the rules get so annoyed by someone trying to shirk their moral obligations... The sad fact is that everyone is going to get socked with higher taxes to pay for all the bail outs that the government made for people and businesses that weren't responsible.... its a bit like the ant and the grasshopper, only in this story the evil government yanks the food from the ant and gives it to the grasshopper.

Your comment was directed at my post and all I can say is there are no words to address your crass indifference.

Count your lucky stars your world has been so blessed.


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[Planogirl]

At one point in our life our house was paid off and we had many thousands in the bank AND we had 401s to boot. That's all gone and let me tell you it wasn't frittered away.

I've never had a paid off house but I can relate to the rest. Ugh, it's awful to deal with and those who never have usually don't get it.

 

[Mad4Mickey]

I think you can get them to lower but not get them to drop to 0 %

Good luck I think just showing you are trying to find a solution will help some.

When I was a single Mom I had to call and ask to have my credit card rate lowered. I had to call Wells Fargo and ask to skip 2 payments on my home . They all worked with me . I had never been late before and I had to explain to them that I wouldnt ask if I didnt think I was in danger of my home going back .I now have 2 houses that Wells Fargo hold the mortgage on and I have never forgotten thier help and I dont miss payments and I am always early by at least a week

Needless to say I pulled out of it and when I got remarried I married someone who works as hard as I do . I am a long way from missing a payment now . YOU CAN BE TOO !

 

[Marionnette]

For what it's worth.. OP you need to call. What you are asking for is not a simple reduction/elimination of interest but a "hardship program".

The CC company will need to assess your financial situation to see if it's a long/short term issue etc... They will ask you about your income, expenses, will most likely review your credit report. All in order to to determine what type of 'program' you are eligible for. A letter accomplishes nothing. The phone call will be difficult but they get them every day.

While a 0% rate until 'whenever' is highly unlikely, most CC companies offer a multitude of programs from a reduced interest/payment program to a settlement. All of which will require that your account will be closed, and all will 'ding' your credit report. A settlement will also affect your Federal taxes as you will be liable for the 'difference'.

Either way good luck.

This was probably the most helpful post in this entire thread. I hope that the OP saw it before she decided to abandon the thread.

Personally, I would rather see someone who is struggling to pay their cards negotiate lower interest rates rather than default on their cards completely. In a perfect world, there would be no need to do this. But this world is far from perfect, especially as of late.

 

[sunnyday123]

You did just fine!

I should add though at some point many of those companies will welcome you back, but of course with once again a high interest rate. But if you're very very careful and need a card for emergency purposes, and don't use it willy nilly....then at some point you'll have credit again.

Doing this credit thing will temporarily trash your credit rating but what good is a credit rating when you can't pay your bills anyway? After a bit of time paying back the credit card companies your rating will improve, so I wouldn't even worry about it at this time.

The one I work for won't. They'll also laugh, and then delete your letter. And if they do, they won't welcome you back for a long, long time. Try a credit counseling service first. Maybe a part-time job? Good luck!

 

[drgnfly30]

This was probably the most helpful post in this entire thread. I hope that the OP saw it before she decided to abandon the thread.

Thanks.. me too.

 

[Mambo Junkie]

Are you the OP? You created this ID yesterda and seem to just be defending her.

When the new Federal law about CCs was passed, right before many companies rasied their rates. Most people saw a raise in their rates but the ones who were a good risk did not go up to 30%. This law also increased the minium payment to 2% (IIRC) of the balance to enable it to be paid off in a certain period of time.

No, not the OP, just finally had something to say. Also, if you read my comments carefully, no where do I say it's ok not to pay the credit cards back or the interest. I am merely posting my own experiences in dealing with credit card companies. I did not ask my cc company to do away with the interest, I asked them to lower it. After enjoying a 7.9% interest for 11 years, they went up to 14% because I closed my account and started paying it off.

 

[Mambo Junkie]

Ok.

We don't carry a balance, so I thought they only raised your rates if you were late or missed a statement.

Thanks for correcting me.

Thank you for your response. I was like you and had never carried a balance before my business started getting into trouble, so my thought was the same as yours. The cc companies socked it to the people who were fiscally irresponsible. I now know they sock it to people who try to be fiscally responsible as well.
I am paying my debts. They are mine and mine alone, and I made an unwise business decision, but I kept thinking the economy would recover, and my business would pick back up to what it was 3 years ago. I will pay it, but I would like to continue to pay the 7.9% interest that was agreed upon when I took out the card. That's all.

 

[DisMN]

The one I work for won't. They'll also laugh, and then delete your letter. And if they do, they won't welcome you back for a long, long time. Try a credit counseling service first. Maybe a part-time job? Good luck!

And there will be 20 more right behind your company more than willing to take on a new customer who *appears* to be dealing constructively with a debt problem.

My comment was really only meant to reassure the OP because she seemed concerned whether they'd ever be able to get credit again. By my experience and the experience of many others I've known, she'll have no problem.

This was probably the most helpful post in this entire thread. I hope that the OP saw it before she decided to abandon the thread.

Personally, I would rather see someone who is struggling to pay their cards negotiate lower interest rates rather than default on their cards completely. In a perfect world, there would be no need to do this. But this world is far from perfect, especially as of late.

You said a mouthful sister.......er....brother? LOL

Thank you for your response. I was like you and had never carried a balance before my business started getting into trouble, so my thought was the same as yours. The cc companies socked it to the people who were fiscally irresponsible. I now know they sock it to people who try to be fiscally responsible as well.I am paying my debts. They are mine and mine alone, and I made an unwise business decision, but I kept thinking the economy would recover, and my business would pick back up to what it was 3 years ago. I will pay it, but I would like to continue to pay the 7.9% interest that was agreed upon when I took out the card. That's all.

I'm sorry you're going through the crummy business climate. We weren't able to survive it. Additionally we stayed in our business MUCH MUCH MUCH too long. I hope you've got a good accountant to guide you through some of the tougher decisions.

If you have your paperwork from when you ageed to the card you may luck out and find that in some tiny tiny printing they will have written something on the lines of *for the life of* or *until this portion paid off* or some such thing. We were lucky I'm a paper hound and I keep everything. Everything. I still had my Promotional Offer from one of the companies we were dealing with and it clearly stated that the interest rate would not be raised.
Due to that and the fact that other people had also saved the promo paperwork the company pushed back all those interest rates to the promo rate.

The other companies we dealt with were somewhat difficult at times and it was so stressfull that we just gave up and let a debt management company take care of all the contacting. Best decision we have ever made to go with debt management and I highly recommend it if anyone out there is over their head but wants to still pay those debts.

Once again to the OP, there's some fantastic advice on this thread so I hope you're still reading it! Wishing you all the best in conquering your debt beast!!


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