DMP Problem- helpful to others and looking for some help myself or advice.

[uktaurusbulba]

Marty, I am looking to get lower rates so I can pay off my debt faster and free up money to be spent on my business and other things. And at least if I continue to pay 1600/month, at least I know it will be paid off in 3-4 years and you live and learn. So my main concern would be that they stick me with high rates. From what I have been told, Bank of America and Discover dont have set rates. Some people get favorable interest rates, others dont. If I go dmp, I dont want to be paying 17% on top of it. You are giving up alot for lower rates in a sense. The way I look at it is: You give up credit and you give up the history of the credit in exchange for lower rates. The only benefit you are really getting is lower rates.

[uktaurusbulba]

Im trying to figure out what there criteria is , thats all. I see some on here say BOA gave them a 4% rate in a similar siutation to mine. Not sure why some pay 4% and some pay 17%. Big difference. Is the guy with the better credit deserving of the lower rate bc I make my payments. I just cant chew the balances down fast enough because there is alot of service.

[marty56]

When I started the DMP, BofA set my interest rate to 0%.  I opend a Sams card and got a mortgage and they dump me from the program and the account wound up being 90+ days late.  They then put me back into the program at 10%.

My point is that if you have a BofA account in DMP, you do not want to apply for new credit until you finish the program.  BofA is serious about that.  Citibank, Discover, HSBC, AE didnt care or didnt check.

[demi]

Out of curiosity, I just checked my Discover (which was just paid off, yippee), my DMP interest has been 5.9%.  I would seriously consider checking some other DMP...it may be that Discover has changed its policies, but it would be worth checking out someone other DMP.  Mine is www.takechargeamerica.org

If I remember correctly, there were one or two that kept relatively high interest rates, but for the most part, they were drastically reduced.

In another post about DMP's, someone complained about late payments in their DMP.  I had one card that had a payment date ranging anywhere from the 5th to the 10th.  My disbursements usually went out around the 4th or 5th --- so one month did get a late notice (although it wasn't a problem, because they were being paid extra anyway, and I was able to catch it).  Simple solution,  called the card and asked for the payment date to be changed to later in the month.

[Anonymous]

I was told by BofA that going into a DMP will result in your interest rate being cut in half. That's true, but when your interest rate is at 32% (!) then it goes down to 16% - which still blows, IMO.

[Anonymous]

I might be asking a stupid question here, but have you called the creditors to try and ask for a lower rate? Probably the first thing you did but have to ask. Even a 2 pt decrease for each will make a difference and could turn the tides in their favor. Also, it sounds like you are making your payments on time and whatnot, even though it is unpleasant, so what are your scores like? If your scores are good, you may be able to either ask for CL increases in order to consol high int bal's to lower rate cards, or perhaps negotiate with creditors and say "hey, i'm a good customer and can take my good credit elsewhere". Closing accounts isn't a good way to go necessarily, but if you threaten to transfer the balances away they may work with you in order to keep your business. Just my 2 pennies.

[marty56]

I havent heard in these forums of people trying successfully lowering their interest rates other then through a DMP.  CCCs will raise your CL (so you can charge more) but lower your interest rates, I dont think they have much incentive to do so.

I would suspect that most people fall into 2 groups, those who PIF and those who just pay the minimum payment.  I was in the latter group.

Except for things like auto loans and mortgages, I think a good FICO player should not worry about interest rates since the goal is to not carry balances or at least not for very long.

If you have to make a major purchase, set a time limit (1,2,3) years and see if a store charge can offer a better rate then a credit card.  Sometimes they offer as much as 2 years no interest.  If you dont pay in 2 years, watch out of the interest rates.

I still think there are smart options for people if you just shop around.