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  Dear
Steve,
I saw online your column about "Just say
no when creditors raise finance charges." I need some sound
advice. I have a large amount of credit card debt. I was paying
it off quite nicely, but my accounts were bought by another company
and they raised the rate to 30 percent.
Due to my mom passing and my 87-year-old father becoming
ill after she passed (they had been married 67 years), I did not
see the change. Too much on my plate.
So what do I do now? A lot of the debt was in taking
care of my parents. With $50,000 worth of debt at 30 percent, I
need interest rate relief or it's bankruptcy for me. I wish to pay
off the debt I made. Any suggestions? Please answer me because I
really need your help!
-- Regina
 Dear
Regina,
My sympathies on losing your mother. I lost my
father last year and understand the stress it can put on a person.
Unfortunately, you have discovered firsthand that there is a strong
correlation between your your personal and financial life. Very
often, turmoil in our personal lives spills over into our financial
lives. Knowing that, however, does not help you solve the financial
problem you are facing. So ... let's go to work.
You say that before the accounts
were bought you were paying them off. It sounds as if something
happened to your credit score that triggered a perceived increase
in risk. I suggest you get copies of your credit reports from all
three of the major credit reporting agencies to make sure they accurately
report your payment history. You may be able to obtain them free.
Each of the agencies also distills that information into a three-digit
number called a credit score, or FICO score. You can obtain them
individually from the credit agencies or get all three from www.myfico.com.
If you still are in good standing
with your creditors and have a good credit history and a good FICO
score, you may be able to get a lower annual percentage rate, either
with your current creditor or by transferring balances to another
card(s).
First, contact your creditor and
request a lower interest rate. It helps to have some leverage in
a conversation when you are asking for something from another party.
Your leverage is the money you are paying in interest payments.
Make it known to the creditor that you will take your business elsewhere
via a balance transfer if it is unwilling to lower your rate. With
your high balances, the company will be losing approximately $6,000
of income for one year at a reasonable annual percentage rate of
12 percent.
If the creditor turns you down,
then begin shopping around for the best deal to transfer your balances.
You can find information at Bankrate.com to help find the best
credit card offers. Stay away from cards that charge a large
transfer fee. Other than fees, make sure you know how long the transfer
rate will last, what things can change the rate and if there is
a different rate for new purchases. (Not that you need to be adding
to these balances!)
If your credit report is blemished,
contact a reputable credit counseling agency and make an appointment
to visit with a certified credit counselor. The counselor will help
you determine the best solution for your current financial situation.
Before entering into any agreement with a credit counseling agency,
make sure you understand all the details and that all fees associated
with the plan have been disclosed.
One more thing: Set aside some
time each month to spend with your finances and read those statements.
Good luck!
The Debt Adviser, Steve Bucci,
is the president of Consumer Credit Counseling Service of Southern
New England. Visit CCCS
for additional debt
advice or click
here to ask a debt question.
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