Posted on June 19, 2009 at 12:13 pm I've got a very clear picture now of the differences between debt management and debt settlement thanks to this (and a few other) websites.  So far, even though I'm in quite a lot of debt (about $50K in credit card debt, about $20K in Parent Loans, and about $15K in car notes) I'm not really "delinquent" on anything (yet) although I have gotten behind on a few payments in the past and doubled up the next month to catch up.  What's killing me is the monthly amount I have to pay each month to credit card companies.  I'm trying not to have to resort to debt settlement since I would love to preserve what's left of my credit (the other day it was at 625) and am wondering if I request some of the high interest rate credit cards to waive the interest rate if they will do that (I have over $20K at 27.24%).  Has anybody had much luck getting credit card companies to waive the interest and allow you to pay on just the principal?  Also is sending a letter the most effective way of getting this done or is calling them better? Thanks in advance!

Posted on June 19, 2009 at 12:22 pm Hi Jeanie, You can certainly call and give it a shot. I am aware of some people who have had success getting their interest rates lowered by calling their creditors and requesting it. From my understanding though you would need to be able to demonstrate some form of genuine hardship for them to consider doing this. I am hesitant to say that this would be very effective (even if you got a few of your rates lowered), since you owe $50 K (but that depends on how much of the principle you are paying down each month). Credit counseling agencies work on the debtor's behalf to try and get the interest rates lowered for them. Some creditors however do not work with credit counseling agencies so be sure to ask any agency you speak with first if they have had success dealing with the people that you owe. On a side note, what do you pay total each month to cover your credit cards? If you give me this info I can figure out how long it would take to pay off your debt and you can get an overall picture of what you are looking at. Be sure to include the average interest rate for the other $30 K of debt that you have.

Posted on June 19, 2009 at 12:44 pm Hi Steven and thanks for the reply :-) I'm currently paying about $1255 per month in credit card payments as follows: Chase: Balance $11,773 at 27.24%Chase: Balance $10,027 at 27.24% Discover: Balance $9,091 at 20.24%Capital One: Balance $9,864 at 6.99% (not sure for how long this rate applies)Sears Visa: Balance $3,936 at 29.99%CareCredit (GE Money Bank): Balance $4,100 at 22.98%  

Posted on June 19, 2009 at 12:47 pm I also wanted to mention that I'm currently separated (for the past 7 months) which is why I'm having such a tough time at making these payments, so I suppose this would be considered my "hardship"....

Posted on June 19, 2009 at 1:03 pm Jeanie, I apologize, but in order to get you the most accurate numbers I would need to know how much you pay towards each card, I forget to mention that before I am sorry for the inconvenience.

Posted on June 19, 2009 at 1:22 pm Oh... got it.... Chase: $392.00Chase: $338.00Discover: $180.00Capital One: $157.00Sears Visa: $150.00Care Credit: $200.00

Posted on June 19, 2009 at 1:59 pm Hi Jeanie, using a credit card debt calculator (http://www.bankrate.com/calculators/credit-cards/credit-card-payoff-calculator.aspx), it will take you the following amount of time to pay off your debts (assuming you don't miss any payments and pay the same amount each month on each card): Chase: 51 Months Chase: 50 Months Discover: 114 Months Cap1: 79 Months Sears: 43 Months Care Credit: 27 Months Ok, so the Discover and Capital One accounts are clearly the biggest problem. I suggest contacting them directly to see if they would be willing to drop the rate for you. Explain to them your situation (hardship) in depth so they know you are doing your best to satsify your obligation to them. You can also let them know you need the rate dropped so you don't risk falling behind. If that does not work I suggest paying more per month towards those two cards, especially since those balances are bigger than some of the other accounts you have. So, for example, you may want to pay less towards one of the cards that is most under control and use those funds for one of the more problematic accounts. I understand you want to avoid taking a hit to your credit, but if you start to fall behind you may have to consider settlement as an option (since the debt amount is fairly high). Of course, you can continue making payments regularly and not changing anything as long as you are comfortable with the time frame above.  

Posted on June 19, 2009 at 3:35 pm Hi again Steven -- Unfortunately I'm not able to continue to make these payments as they are so am in the process of contacting each creditor to request that they drop the interest rates.  Is snail mail the best method of contacting my creditors for a request like this or is phone better? Thanks again.

Posted on June 20, 2009 at 5:54 pm Hi Jeanie, I suggest calling them first. If you do not make any progress with the first person you speak with at each company, hang up the phone, call back and try speaking with a different person. If that doesn't get you anywhere, I would then submit something in writing to each creditor with your situation and request for lower interest rates. Enjoy the rest of the weekend and feel free to keep me posted on your progress.