Lower rate option?

[Anonymous]

Hello,

I'm new to the forum but have some questions about my options in lowering my rates. With way too much debt on my hands, I'm trying to get a handle on things. I have 4 major cards with 25%+ APRs. I am considering the DMP road but would like to avoid it if possible. I have been able to have my rate reduced with one card so far. When calling Citicard, they were unable to lower my rate but gave me another option. If I close my account with them and go on a payment plan, they will lower my rate to 10%. Not the best rate but a HUGE improvement from the current 28%. However they informed me that in doing this, it will show on my credit report that the account was closed by the creditor and that it will effect my credit. Does anyone have any experience with how much this will effect my credit? Would you say it is still a good option for me given that my rate is currently 28%?

Thanks,

[Brusilov]

Depending on your current credit history, I would definitely consider consolidating all or a portion of your debt into a personal loan through a bank.  Even if you were only to lock in a rate of 12-15%, it would be a drastic improvement and you'd also have the benefit of setting a timeline where your current debt load would eventually reach $0 (and you wouldn't have to close any of your current credit accounts).  I suppose if you could afford to close some cards with negotiated lower rates that may be worth it for you as well.

[JayBeast]

From my experience in my personal DMP, the card will either show closed by the creditor or that it's in a DMP.  I've had my Citi cards show closed by creditor on one report, only to just state DMP on another.  From my experience wtih Citi specifically I was also in the 25% club on one and 33% on the other.  I initally called trying to arrange a payment plan.  They also offered to reduce my rate in exchange for closing the card.  I cannot remember the rate offered, but I was able to get both lowered to 9.9 through a DMP. 

In reality, there's nothing a DMP can do that you can't do yourself, however from my experience most creditors will show an extra willingness to work with you through a DMP than directly through a plan. I guess they see working through a plan as a serious commitment.  YMMV.  

Since entering the plan my scores have gone nowhere but up.  I now have a solid payment history with no lates, my utilization has gone significantly as I'm paying more towards principal than interest thanks to the negotiated rates.

Most DMP plans will require you to close all cards except one or two for emergencies only, although exceptions can be made.   It is also highly advisible to avoid opening any new cards until finishing the plan as well as to discuss any major purchases inolving credit with your counselor.

I sent you a PM with a link with the company organizing my DMP as well as a foundation to assist you in locating a reputable agency near you.