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I'm hoping a fellow MT can help me with something...

Posted: Jun 22, 2010

I haven't had to deal with credit cards since my divorce. So, I finally got one of my own with 10,000 credit limit. Why they gave me that much I'll never know. Never had to use it, that is, until a couple of months ago when I had an unexpected medical bill of $9000, so I had to practically max the card out. I don't know WHAT I would have done if I didn't have that card to put it on. So, I looked at my statement today....says my last payment was posted of $200. Fine. But then I looked at the balance and it only went down by about 50 dollars! Then I realized that about $150 of it was ONLY INTEREST!!!! I know I have a high APR (26%!!) but are you kidding me???? Is this for real? How the heck did they come up with 150 interest for ONE month???? If this is correct please someone tell me before I call them tomorrow and make a fool of myself. If so, this is going to kill me, I'll never get it paid off.

;

here is some info for you. - Carol

[ In Reply To ..]
Too bad you did not make a deal with the hospital to make installment payments instead of using your credit card with high interest rates. If you were a reader of financial news, you would have known that many credit card companies have increased their interest rates recently, especially if you have a low FICO score.

You may try to obtain another credit card with a lower interest rate and then transfer your balance to this new card, but make sure there is not a transfer fee involved with this transaction.

And you may try to pay extra payments, make as high a payment as possible to avoid the interest being so high.

And you may try calling them to get them to lower the interest rate. It is worth a try.

I am sorry that you had the misfortune to have a high medical bill. If you do not have health insurance, do you have a county hospital where they charge based on income?

Be happy you are well, and you will find a way to pay off your debt.

Good luck.

That sounds about right, actually. - credit cards

[ In Reply To ..]
Yearly credit card interest rate is divided by 12 and then is compounded monthly. So, if you have a 26% yearly interest rate, divide that by 12 (I got 2.167), multiply that number by your balance and there's your interest amount. $150 on $9k actually sounds about right.

The trick is to never just pay the minimum payment. When I had credit cards before I paid them all off, my strategy was to pay the interest plus at least $100. That way I saw movement on the overall balance and it did go down. It went down slowly, but it did eventually go down.

Good luck. It sounds terrible now, but consider yourself lucky that you had it available when you needed it most. That's what they're for, imho.

How about trying for a personal loan - to transfer balance

[ In Reply To ..]
or find some other way to transfer the balance.

That is totally outrageous. I really feel for you and will be hoping you can find another alternative than to pay that.

Our credit card company lowered our interest rate... - Kendra

[ In Reply To ..]
every time we asked them to (about every 6 months) until we got the rate down to 6.0% and now they will not go lower, but its a pretty good rate for a credit card, so I won't complain. You should ask. The worst that can happen is that they say no.

Kiki - credit cards

[ In Reply To ..]
First off, sorry to hear about your medical ailment. I hope you are well now. As the previous poster said, your best option was to set up a payment plan with the hospital. That's for future reference.

As one of the other posters mentioned, transferring your balance to a lower rate card is also a good option. She mentioned to avoid the balance transfer fee, which is great if you can, but most times it is unavoidable. I would add that if you're going to pay a balance transfer fee, crunch the numbers first. They're usually 1 of 2 fees, a percentage (usually around 3%) based on the balance and/or a cap ($75). Read the fine print carefully.

Also, if you find another card to transfer it to, make sure you read the terms and condition of the transfer. Sometimes the balance transfer is a low introductory rate, which means after 6 or 9 months or a year, it jumps back up to the full interest rate. There used to be some that let you keep the low interest rate until you paid off the loan, but they may be gone with the new credit card laws in place.

These types of interest rates were designed with the idea that you would transfer the balance and then keep charging. The new purchases would accumulate at the higher interest rate while your payments would be going towards the old transfer.

If/when applying for a new card, keep in mind that having a card that is almost maxed lowers your credit score somewhat. Definitely pay more than the minimum payment if you can. Credit card statements are not required by law to provide you with how long it will take to pay off your card by just making the minimum. In addition, interest is compounded daily, so making your payment as early as possible also helps. If you get paid twice a month, make 2 payments a month. It will bring the balance down quicker.

A home equity loan would give you a better interest rate if you own a home. Secured loans offer better rates than unsecured (personal) loans.

I would check out Dave Ramsey's website. I think he has a Q&A section where he might be able to provide options we're not thinking of.

Credit Card Interest - Sally

[ In Reply To ..]
That was the purpose for sending you such a high limit card, because they knew only a BIG emergency charge would cause you to use it, and you would be trapped. They will kill you with the interest, and don't be 5-minutes late with a payment, and you will always only see about $50 applied to principal. The rest is theirs!!!! Good Luck. It is sad and should be a crime. But, that is credit in the USA.

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