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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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