Dang Discover won't budge!

[jodyangel]

Problem maybe someone here can help me with. I have a balance of $10,000 on my Discover card which Unfortionately I ran up after going thru a divorce. I know better now!!!! I had 2 lates almost 3 years ago on the card. My rate now has come down to 16.75% but they won't come down further!! My payment is $221 a month and I am just paying that now. I really want to do the "right" thing and not affect my credit negatively by paying it off. But, at the rate Im going it will take 30 years!!!

 

I had someone suggest to me a "refinance" with my mortagage, which makes me nervous..and Debt Consolidation which also makes me nervous. Does anyone have opinions on this and can anyone give me any suggestions? Thanks!

[FunkSoulBr]

Yikes!! you are in a hard place.

 

Either of the options you listed would work far better than your current payment plan. But the sucess would depend on YOU and your willingness to pay it off and be more responsible about your spending.

 

If you took out a low interest home equity loan and continued to pay the say $220 per month or better you would b in good shape. Thats probably the cheapest way to go You have got to pay it off ASAP.

[Gingerly]

What do your credit scores look like?

 

Maybe we can help you find a card where you can get a low APR balance transfer to help pay that off quicker.

Edited February 20, 2005 by Gingerly

[jodyangel]

thanks! Well my score is around 670 ish. I'm not sure I can a low interest card with a balance like that..........can I?

Discover couldnt give me any reason why they wont lower..basically said they arent given that info LOL. Computers rule the world ackkkghh!! But they typically lower every 6 months if requested. I just hate taking that long and I dont know if they'll lower me! I had a few lates with them back in 2003...but once I learned about what paying late does, I dont do it!!!

 

Any "helppppppppp" is appreciated!!!

[momto2greatkids]

Even getting part of it to a lower interest will help. I started out paying the min. on my cards and when the min. started getting lower I kept paying what I was. After a few months of paying a little more than the min. I got a small CLI on on card and started getting BT offers on a couple of the others. I asked for a lower rate on one card and they gave me less than 1% less, plan on upping my payment to them for a few more months and than I call them back and ask again. My other cards are as low as I can get.

 

I would look into getting another card to do a BT, in the mean time pay more than the min., even if it's only $20, and call them back in a few months and see if they'll lower it then.

 

To see where you're at and how long it'll take to pay off check here

http://www.dinkytown.net/java/DebtRolldown.html

 

Payiny the min every month will take over 30 yrs.

Paying $221 a month(every month until paid off) it'll take 6yrs 1 month.

But if you can add $29 a month(paying $250) it'll take 4ys 11 mo.

And hopefully with paying more than the min. every month they won't see you as a higher risk and lower your rate even more.

 

Putting numbers in the caculator and seeing how much faster I can pay my cards off really motivated me to find a way to pay a little more.

[cotterpin]

thanks! Well my score is around 670 ish. I'm not sure I can a low interest card with a balance like that..........can I?

Discover couldnt give me any reason why they wont lower..basically said they arent given that info LOL. Computers rule the world ackkkghh!!  But they typically lower every  6 months if requested. I just hate taking that long and I dont know if they'll lower me! I had a few lates with them back in 2003...but once I learned about what paying late does, I dont do it!!!

 

Any "helppppppppp" is appreciated!!!

<{POST_SNAPBACK}>

 

 

Call them after March 1 and ask again for the decrease. this is when the new cardholder agreement they sent out goes into effect, which takes out the Universal default clause, and only rates you based on your last year history with Discover. Escalate it to a supervisor and really push it, call back if need be, that's what I had to do. I had to call them 3 times at least to get my rate lowered. I just paid down to 35% util and will be calling them again for another APR reduction or a CLI, otherwise I'll be PIF and sockdrawing them

[madflower]

You have a few options:

Call discover as mentioned if you can get to 5-6% with discover then do it, but honestly I dont see that happening. You might get it to 10%.

 

Are your other cards a lot lower? I mean if Disocver isn't budging and you aren't getting any great BT deals. You can use your current lower interest rate cards and do the old fashioned BT. You just put all of your bills you normally pay cash for (gas, food, utilities, etc.) on the lower credit card, then send the money to discover along with your normal payment. It is quite a bit slower, especially for 10k, but 6% is better than 15% even on small sums of money.

 

I seriously think you need to do the math. and get a 5-6% home equity loan or borrow against your 401k. It doesn't really matter. You are essentially just leveraging your money to get a lower interest rate. You can do the math, but it is a lot less risky then you think because you can pay it back a lot faster. Instead of paying 125/mo in interest, you will only be paying 42 a month which is a savings of nearly 80 dollars a month. That savings alone could be worth around 800 dollars in a year. EVEN in the case where I had to pay 500 bucks for the loan origination and 60 dollars a year, you are still ahead almost 140 dollars after the first year..

 

The second year, you will be ahead around 600-700 dollars, just in interest savings even if you have to pay a fee.

 

The loan is a heckuva lot less risky, just because you can pay it back so much faster.

You took a chance buying a house, what is the difference if you are taking, less risk to pay off your debt?

 

You might lose your house? well you might lose it anyway if you don't pay it. Depending completely upon your state laws.

[jodyangel]

Well I don't have a 401K to borrow against LOL! I went thru a divorce a few years ago and just started working fulltime 3 years ago. I'm over 40!!

So thats on my list to do...start some kind of savings for retirement.

 

I don't use the Discover at ALL and havent for about 2 years. I hope they drop me to at least 10..then I'll keep asking every 6 months. I am now paying them $250 a month instead of the $221 which is whats required...

 

If I take a home equity loan thats really low, I can afford to send extra and pay it off quicker so thats an option for sure.

Thanks for your suggestions!!

[madflower]

I think your home equity loan might be able to get all of Discover. You can only mortgage up 80% of your house value. The rest has to come from home equity loans and the rates get more expensive as you borrow more against it. IE 10% of house value will be less then 15% of your houses value, etc.

 

What you can do in the short term is do the balance transfer, where you do put "regular" purchases ie gas, food, etc. All on a lower interest rate card, and let those build up, and send the extra principal into discover. I have a feeling you are either over the limit or close to it and ideally you need to get rid of the over the limit fees if you have them. I am sure that is only a couple of hundred bucks a month and you REALLY have to be on top of your budget to be effective at it.

 

Also make a budget and relaly look if there are places you can avoid paying extra. Maybe couple car insurance with your house insurance, raise your car or house insurance deductibles, etc. Maybe you can squeeze another 50 or 100 bucks out of your budget without really losing anything.

[cotterpin]

thanks! Well my score is around 670 ish. I'm not sure I can a low interest card with a balance like that..........can I?

Discover couldnt give me any reason why they wont lower..basically said they arent given that info LOL. Computers rule the world ackkkghh!!  But they typically lower every  6 months if requested. I just hate taking that long and I dont know if they'll lower me! I had a few lates with them back in 2003...but once I learned about what paying late does, I dont do it!!!

 

Any "helppppppppp" is appreciated!!!

<{POST_SNAPBACK}>

 

 

Call them after March 1 and ask again for the decrease. this is when the new cardholder agreement they sent out goes into effect, which takes out the Universal default clause, and only rates you based on your last year history with Discover. Escalate it to a supervisor and really push it, call back if need be, that's what I had to do. I had to call them 3 times at least to get my rate lowered. I just paid down to 35% util and will be calling them again for another APR reduction or a CLI, otherwise I'll be PIF and sockdrawing them

<{POST_SNAPBACK}>

 

 

 

OK just noticed this, I'm a dweeb, the new guidelines go into effect APRIL 1st, sorry

Edited March 7, 2005 by cotterpin

[jodyangel]

...can you explain what you mean by your post? Is there a new law governing credit cards going into place?

[cotterpin]

No, no new law, but new Cardholder agreement with Discover, you should have gotten it with your January bill

 

it abolishes the "universal" default clause, meaning that your history with DISCOVER becomes the prime factor in determining your APR and future CLI's, rather than whether or not you've been late on payments to other creditors or have high utilization on those cards

[jodyangel]

ahhh Ok! Well I don't remember that...but I don't always read all the fine print LOL!! I will call them and demand!!