Good credit rating but too much debt for low rates
by
Scott Bilker |
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Scott,
I just found your website in a
book I am reading from the Rich Dad Series. I am in business for
myself for 8 years now. I have high CC debt all for the most part
business debt. We always pay our bills on time. Recently though, the
CC companies started raising their interest rates on us and lowering
our limits dramatically. Some to the tune of 35%! I am at a loss of
what to do.
My business is doing well to the
point that, if I were able to pay off these cards, I would be able
to do my business on a month-to-month basis without accruing any cc
debt. Herein lies the problem of being able to pay off the credit
card debt especially at these rates. Even at these rates, we still
are not making any late payments. Our credit rating is excellent, but
we are carrying too much debt to acquire lower rate cc to lower our
monthly payments. What can we do?
I am going to try and call all of
my credit card holders and see about lowering my monthly interest as
you talked about in one of your articles. I am also ordering your
books as soon as I finish with his email. Your help is appreciated.
Bob
Bob,
I, too, am a fan of the Rich Dad series
and was very happy they included my book and DebtSmart.com in their
latest book.
Banks are eager to raise someone's
rate for any reason they can find. The main reason includes making late
payments to them or any other creditor. This, in turn, would lower
one's credit score. And, if the score has gone down,
for whatever reason, they want to
raise the rate to match that of the people that they currently lend
to with that score.
You
mentioned that you're not late and that your credit is good, but
you're having trouble keeping your interest rates low. This could
happen if you are nearly maxed-out on your cards.
Part of your credit score has to do with how much debt you have
compared to your total available credit. This
debt-to-available-credit ratio is a factor that banks consider when
lending money. Banks always want it both ways. They want you not to
have too much available credit but at the same time, only use a small
portion of the available credit that you have. Then, of course, they
want you to use their line of credit so they make money.
Call your credit card banks and let
them know that if they don't reduce your rates, you're going to take
your business elsewhere. Ask to speak to a supervisor if
the first person cannot help you. If they don't reduce your rate,
then you must punish them by transferring your balance! To do this,
you will need a low rate transfer deal from one of your existing
credit cards, or you will have to get new credit lines. If the latter
is the case, then try to apply for a few credit
cards that have low rates that I recommend.
Read my books when you get them and
find a few phone calls that are similar to your situation. Study
those calls and then call your banks again. Just because they don't
do what you ask the first time, doesn't mean that you cannot succeed
the second, or third, etc.
Other options may include a second
mortgage to pay off that debt. There is the danger that you're going
to now secure the unsecured debt with your home. However, you did
mention that your business is going well; therefore, this option may
be able to save you a bundle! Mortgage rates are relatively
low, plus you will get the tax deduction.
Try everything I mentioned and let me
know what happens!
Regards,
Scott
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