Your Credit Card Debt

Your Credit Card Debt

On November 14, 2008, 6 News and WATE.com held a live online discussion to answer questions about credit card debt. The following is a transcription of that discussion.


Focus on the Economy: Fighting Back (11/14/2008) Powered by:CoveritLive
5:00
WATE: 6 News wants to help you get through the current economic crisis. Each day this week, 6 News has assembled a group of experts in our studio from 5:00 to 6:30 p.m. Today is the last day of this special effort, "Focus on the Economy: Fighting Back," when we tackle a different subject each day. Our experts are available to answer your questions by phone and here in this live online discussion at WATE.com. Today's subject is the credit card debt.
5:00
WATE: With us today is Jeanie Hoskins, who is with the Better Business Bureau.
5:00
WATE: We will attempt to answer as many questions we can and cover as many topics as possible. For that reason, it will be helpful if you can keep your questions brief and to the point. To ask a question, use the form below.
5:04
WATE: Let's start off tonight with a question that was submitted earlier via email. It comes from Charlene. She asks: I have let my credit cards go to pay other debts that at the time were more important, now I am graduating college with a degree in nursing and want to get my credit back. How can I get my credit back when so the debts are already in collection and for so long, about 4 years? The amount is about $8000.00 and several different cards. I also have one medical bill in collection for $3,700.00.
5:10
Jeanie Hoskins: Charlene you might check into consolidating everything under one loan
5:11
Jeanie Hoskins: Making payments on time is a way to rebuild your credit, it will not be a quick process but its a start
5:11
[karen] how do i go about consolidateing my credit cards so i can cut the interest down and have one payment and it not be so high i can;t pay it. thank you karen
5:13
Jeanie Hoskins: Karen you would need to shop around and get the lowest interest rate and make sure you check the fees and see if tthere are hidden charges
5:14
Jeanie Hoskins: Watch out for introductory rates, see what the rate is after the introductory rate
5:15
[Ann] Does working with a consumer credit counseling sevice hurt your credit?
5:17
Jeanie Hoskins: Ann anytime you are working to get your credit in order you are going in the right direction. They will help you get things started and will not hurt your credit.
5:19
Jeanie Hoskins: Have you got a copy of your credit report lately?
5:20
[Ann] No, but I know that our debt to income ratio is going to get worse as I just lost my job today
5:22
Jeanie Hoskins: To get a free copy go to www.annualcreditreport.com or you can call 877-322-8228. It's a good idea to contact your creditors and see if they will work with you
5:22
[Guest] My husband and I have about 5000 in credit card debt. One of these credit cards is in the hands of a law office at this point. We have about 30,000 in student loan debt which is seriously ruining our credit. Our credit score combined is a 520 or so. We can't get any kind of consolidation loan because of our credit plus we don't own a home and own both of our cars. We make less than 50,000 a year and struggle. What could we do to start to recover?
5:25
Jeanie Hoskins: Have you tried getting the credit cards to lower your interest rate or lower your payments?
5:27
[Guest] Credit cards we had in the past we have settled with. The one that is in the lawyers hands wants to much of a min. payment. With our student loans we have used all the forbearance time alloted because one of the loans was a private signature loan.
5:28
Jeanie Hoskins: Call Consumer Credit Counseling maybe they can work with your creditors
5:28
[Alyssa] Does it cost anything to talk with with a credit counselor at CCCS?
5:29
Jeanie Hoskins: No the consultation is free, tthere are small fees for handling accounts, they would be able to discuss this with you
5:29
[Jack] I am on disability (SSDI) and I owe almost 2000.00 to Merrick Bank with a 30% APR I have called to try and get them to lower the rate and they won't. I also have over 8000.00 in collection with Capital One. They have tried to sue me with no luck. any suggestions?
5:32
Jeanie Hoskins: Jack unfortunately not all creditors will work with you. If there is anyway you can move the Merrick account to another card with a lower interest I would definitely try. Has Capital One made any offer
5:33
[Janet] How do you approach your creditors to ask if they will work with you if you have lost your job? Are you risking having your credit cancelled?
5:34
Jeanie Hoskins: Janet anytime you let them know the situation twhen it first happens they will usually work with you, its when they don't receive several payments that you run into problems
5:34
[Jack] not lately. I offered to pay 50-100.00 a month to Cop One and they turned it down.
5:36
Jeanie Hoskins: Jack If they take you to court, they will set up a payment through the court so they may have to settle for what you can afford
5:37
[sally] I red somewhere that if you half of your payment two weeks before due and the remainer on the due date you cut your intrest rate down. Is this true
5:37
[Janet] Great, thank you
5:38
Jeanie Hoskins: You are applying to the principal faster
5:38
[Jack] Is it true that SSDI money cannot be levied or garnished?
5:40
Jeanie Hoskins: I am not an attorney and could not answer that question for you,you might check with Legal Aid to see what they tell you
5:41
[Jack] thank you so very much for all of this information
5:43
WATE: Thank you, Jeanie. We're now joined Daru Burdge, who is with Consumer Credit Counseling Service.
5:43
[sally] Is it true that ccs sometimes cannot even get the credit card company to work with the people who use thier services.
5:46
Daru Burdge: Hi Sally,Great question. CCCS works with all credit card companies through our debt managment program. However some credit companies will lower interest rates more than others. It really varies by company.
5:47
[JW] I own my house and have about 2 years left on my fixed rate before it will change to adjustable. I have about $9000 in credit card debt. I would like to work with a consumer credit agency but I've heard it hurts your credit even more. I'm afraid I wouldn't be able to refi my house if I work with CCCS. What do you suggest?
5:48
Daru Burdge: JW- Credit Counseling through CCCS is free and a counseling session won't show up on your credit score at all. A one hour session with a certified counselor will help you look at the overall expenses, income, credit report--your specific situation.
5:51
Daru Burdge: Sometimes if you sign up for what we call a debt managment program where we work with credit companies to lower your interest rates and come up with a repayment plan, it may show up on your credit report. CCCS doesn't report it, but your card company might. While it could temporarily lower your credit score, after payments are made to each creditor on time over a relatively short period of time your score can increase as long as there aren't add'l cards opened up and used.
5:51
[JW] Thank you for your advice!
5:52
Daru Burdge: Also, to make an appt with CCCS for credit/budget or housing counseling call 800-251-2227 or visit www.cccsinc.org
5:52
[sally] Is there any thing being done by the goverment to make it easier for people to get to the right person at a credit card company to see about lower interest or help form them while you are in a bind? the service person you get on the phone is only limited to aid you so far. Who do you have to talk to to get the help you need?
5:55
Daru Burdge: I am not aware of anyone in particular at the company you should speak with. Credit card companies vary greatly with how they are handling clients who are having trouble paying. It also varies greatly depending on your history of payment, balance, etc. It would probably be helpful for you to speak to a credit counselor who might suggest a debt managment program or ways for you to pay more than your minimum payment.
5:57
WATE: Here's a question from Susan that came to us earlier via email...I am on disability and alimony. I have had to use my credit cards a lot lately and now the minimum payment has gone up and they seem to have been doubled by the company. What is the best thing I can do to get this paid down. I have one card that they are charging me 29.9% interest. Can I get that lowered? They call me over and over if I don't pay on the date it is due. Is that something that is legal? I need help getting this paid because as of now, I usually have only about $20.00 to get gas and groceries for 2 weeks. I pay all I can with each check.
6:01
Daru Burdge: Unfortunately, that is happening to many people. Creditors legally have the right to increase your interest rates if payments aren't made on time. Sometimes they will lower those rates if you call them directly. In order to answer your question better, I would need more info re: income and expenses and total credit card debt. Please call 800-251-2227 or visit www.cccsinc.org to set up an appointment or for more information online. Counseling can be done in person at our office, by phone or online.
6:04
WATE: If you're just joining us, tonight we're answering questions about credit card debt. If you have a question, submit it in the form at the bottom of this discussion block. Daru Burdge, of Consumer Credit Counseling Service, is here to answer your questions until 6:30.
6:06
[Paul] you can reverse late charges 2 times per year simply by calling them and asking them to reverse it
6:07
Daru Burdge: Late charges may be reversed by your creditor if you have a history of making on-time payments to them. If payments are regularly made late, they are less likely to reverse any late fees or penalties.
6:19
WATE: We're almost done for our time tonight. If you've already asked a question, we'll try to answer it shortly. But if you haven't asked one yet, we won't have time to get to it.
6:24
WATE: We've been slammed with phone calls and Daru stepped over to the phone bank to help out when we had a momentary lull a few minutes ago and she's been stuck there ever since. I apologize to everyone waiting for the question to be posted and answered.
6:29
[marlena] I have a lot of credit card debt. I have been able to pay and have only been late once 2 months ago after being late they increased my interest rate to 28.99 % I have called banks and tried to refinnance but my income to debt ratio is too high. I have good credit credit score 760 what would you suggest?
6:32
Daru Burdge: Have you called your cc company? I would think that if you are making payments on time, they would be willing to talk with you about reversing that higher interest rate. I wouldn't refinance my home for credit card debt. Find out if your bank or credit union will offer a card for a better interest rate as you have a great score!
6:32
[Tim] I have a large credit card company loan, and the interest rate jumped because I was late with a payment once, what can I do?
6:35
Daru Burdge: Call CCCS at 899-251-2227. We may be able to work with this creditor to see if they will lower your interest rate based on a debt management repayment plan. While this could lower your credit score (minimally) temporarily, that score will improve over time.
6:37
[lwinton] I have a balance of 8,700.00 with the apr going to 19% and only paying the minim payment of 156.00 monthly. Should I get a loan from my 401K and pay the balance off and cancel the card. The rate from my 401K is 6% for 60 months and a payment of 129.00 per pay period. I this a better option than getting a loan from my credit union?
6:40
Daru Burdge: I never recommend that people tap into retirement plans for credit card debt if they are not yet retirement age. There will be penalties and taxes for taking an early disbursement. Also, that $$ is set aside for your needs in the future. I would explore other options...you really need to pay more than that min. payment.
6:41
WATE: I know there are a couple questions that came in late that we couldn't get to and I apologize for that. If you didn't get your question answered, scroll up to the other answers here and chances are someone has asked a similar question. Or better yet, give Consumer Credit Counseling Service a call next week at 800-251-2227.
6:42
WATE: Thanks to everyone who asked a question. And special thanks go to Jeanie Hoskins, of the Better Business Bureau, and Daru Burdge, with Consumer Credit Counseling Service. We appreciate their time and expertise.
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