How can I get out from under this credit card’s interest rate?
I have a number of credit cards that I had to live on for a few months when I moved away to school. Now, I’ve got a job and have been trying to get rid of them and just live on my paychecks. I had planned on becoming “debt free” (excluding student loans) within 3-4 years.
Or not.
One of my credit cards (Chase) was over-drawn. I did not realize this for some time, as I never used the card and my father had agreed to pay for it. The initial limit was 2,500 dollars. Last month, it was overdawn to about ~2,600 dollars. This month, it’s overdrawn to ~2,818 dollars. The jump? The credit card is now charging me %29.99 interest.
There is no way in hell I can handle that. At all. Period. I have enough income to pay off my bills — rent, utilities and phone, food, gas, car note, and just enough to keep up with my “get out of debt” plan — until this thing came along. But how can I head off this debt if Chase is tacking on exponentially hundreds of dollars EVERY month? This is more than my entire income!!!
My parents can’t help, and I’d prefer to get them out of my financial business altogether (I have a deliquency on my credit report where my mother signed up for a card under MY name and then no one paid the bills — until I discovered it six months later). I went to the bank, but they won’t help because my credit is bad because I have an overdrawn card!!! X.x And I really do not want to turn to bankruptcy; I mean, damn. I’m not even out of my first year of college yet, and I’m already taking a dump on the rest of my financial life. :/
Anyway, I need SERIOUS help here. (I have over 5k in debt, not including student loans, which tack on several more thousand)
In response to some answers: I think you’re right and I may just be panicing… I don’t have the cash to pay off the overage, though. However, I recently discovered (since posting this) that my father hasn’t paid the card in eight months even though he tells me he has. So, either Chase has not been crediting my account, or I’m being lied to, but while my parents have some spending issues, they’ve never lied to me like this before… so I have to wonder where all that money’s been going. :/
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August 10th, 2009 at 2:59 pm
OK, you have some calculations wrong. The problem with that credit card is over the limit and late charge fees and not the interest rate. The interest charge on a $3,000 balance at 29.9% is only about $75 per month so I suspect that about $140 of the charges is over the limit and/or late fees.
So you have to pay down that one credit card first to get below the limit.
After you pay down that one credit card to below the limit, all you need to pay on all your credit cards is about $180 per month to pay off your credit cards in 4 years (assuming 5K total debt at 29.9%).
So even if you have to take a cash advance from your other credit card to pay down the over the limit credit card, do it otherwise it is going to kill you. Also you may be able to call Chase and have the account closed to stop the over the limit charges. They may also rescind some or all of the over the limit charges if you talk to them nicely.
Edit: You should panic. Those over the limit and late payment fees can put a high interest rate to shame. I think you hit the nail on the head and your father hasn’t been paying the bill.
August 13th, 2009 at 10:17 am
Call the credit card company and ask them to lower the rate and continue to make your minimum payment. After 2 minimum on time payments the bank should lower your % rate. Go to your bank and ask for a personal loan to pay the entire amount of this credit card. You may have bad credit but if the bank can take a monthly payment from your account, and you can show ability to make payments you may find them more cooperative. You also need to write to the credit bureaus asking them to remove the delinquency and letting them know your mom fraudulently opened an account in your name.
Additionally: Your Mom opened a credit card in your name and if you did not know about it that is more than lying it is fraud. I’d check Dad’s check book and see if checks have been written to Chase and make sure he is putting the correct account # in the memo.
August 16th, 2009 at 6:27 am
Contact the credit card companies. Most of them will work with you. Check out this website there is a lot of helpful information on it. I have used a lot of the tools on the website to fight my debt over the last year and I am slowly but steadily getting closer to being debt free.
August 19th, 2009 at 3:00 pm
Do not close the card cause it lower you available credit line. You also can use this service to pre-estimate future scores for different scenarios of credit card payments. – freecreditreport.sinfree.net
August 21st, 2009 at 2:17 am
Wait! Credit is all GOOD. There are so many posts on this site about how to get, increase, maintain and otherwise seek credit. Seems you’
ve not learned the beauty of it.