Lower the Interest Rate

Hi Scott,
I saw you on CN8's Family Talk show today and tried to get through but with no success. My question concerns my personal involvement with Providian Bancorp. In 1994 I filed Chapter 7 bankruptcy as a result of a job layoff; the next job I obtained two months later I had to take at a $12,000/year pay cut hence the bankruptcy. Since the bankruptcy I have had no blemishes whatsoever on my credit report and am currently carrying a home mortgage (never late or delinquent) plus a new car loan, my second. Following the bankruptcy I obtained a secured credit card from Capital One in hopes of re-establishing my credit which I paid off with no problems. I also paid off a 4-year new car loan with a high interest rate again with no problems. Providian then sent me an offer of a credit card with no security deposit but at a high interest rate. 

I currently owe close to $5,000 on the card, thanks to having needed home repairs and a child in college, and have had an interest rate reduction from 21.9% to 18.9% (only on purchases made after the new rate went into effect which was several months ago). My minimum payment is $117.00 but I pay $150.00 each month. I tried to get them to lower the rate even more but they refused, saying that they couldn't. I've applied for even lower-rated cards but because the bankruptcy is still on my credit report I've had no luck. 

Any suggestions in helping me to get rid of this balance and have more of my money applied towards the principal and not the interest? By the way, this is the only credit card I have. (I am also interested in receiving your book and computer software). 

Thanks!
--Yvonne

Answer
Yvonne,
Considering what happened with losing your job it sounds like you're doing a good job of handling your debts!

At 18.9% it's going to take 4 years to pay off $5,000 with $150. That's not too long however that rate is certainly too high! I would doubt that they're going to be willing to lower the rate since they have no reason to do it. No bank is going to lower your rate to be nice, the only reason is going to be because you force them to do it by taking your business elsewhere.

To get that rate lower you will need to get other credit lines and make them compete for your business. Just keep applying for new cards. I would apply to at least one new card each week until they start getting approved. It will happen, it's just a matter of time.

Another way to start reducing that debt is to raise some cash. I know many people who have been very successful at selling all kinds of items at eBay.com. I'm going to be writing about this topic soon but until then go to ebay and check into it.

Scott 

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