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Guest Post – How The “Digging Out Of Credit Card Debt Challenge” Improved My Outlook On Life.

Today’s guest post is from I’ve Paid for This Twice Already.

I’m paidtwice, and I blog at I’ve Paid for This Twice Already… about our family’s struggles and triumphs with eliminating our debt. On July 16, David started his series right here at My Two Dollars called “The Start Digging out of Credit Card Debt Challenge“. I am in a pretty significant amount of debt, about $5500 of it credit card debt. Although I am already actively working to eliminate it, more ideas and perspectives never hurt, so I decided to take part. I’ve Paid for This Twice Already… is about our family’s struggles and triumphs with eliminating our debt. On July 16, David started his series right here at My Two Dollars called “The Start Digging out of Credit Card Debt Challenge”. I am in a pretty significant amount of debt, about $5500 of it credit card debt. Although I am already actively working to eliminate it, more ideas and perspectives never hurt, so I decided to take part.

The overall goal of the challenge was “to get started on your way to living debt free”, and that is exactly what I want. The first week was all about information. We were to gather up all our credit cards, put them in a pile, and start writing them down, the balance due, and the interest on the card. At that time, I had three credit cards. I dutifully got them out, and wrote them down and their interest rates. Two of the cards I have no balance on, and the third I had at the time about $6200. Once I wrote down the information, following the instructions I put the card with the highest available balance back in my wallet, and put the other two in an envelope and stashed it under a basket on my bookshelf. That wasn’t too painful. Yet.

The second week came, and the post had the words I was dreading. Call your credit card company and request a lower interest rate. Ugh. Oh, how I hate asking people for stuff! How I hate it. I wrote a comment to the post to that effect and thought about dropping out of the challenge. But only for a minute. Then I took out my Capital One card (the one with the balance), looked at it, and put it back under the basket. That was Monday.

Tuesday, I took the card out again and sat it on my desk in front of my computer. I looked at it every once in a while, and thought about doing something. Then I put my to do list over it. Later that evening, I picked up my to do list, and there was that dang card again. I looked at it, then put it back on my desk and went to bed.

Wednesday came, and when I turned on my computer, there was my card. I looked at it for a few minutes, and then wrote a list of why Capital One should lower my interest rate. I’ve never paid late, I’ve had the card for several years, and one of my other cards, when I called to change my address a month back, had offered me a low balance transfer interest rate. Then I put the list under the card and fed my kids breakfast.

Later that morning they were both taking a nap, and the card and now the list were still there, waiting for me. So I thought… well, whatever, I can always hang up, and I called. I couldn’t figure out how to get to a real person, so I hung up. Then I called myself a wuss, and I called again. This time I finally did get a person, eventually, and I rattled off my list of why I am so awesome and need a rate reduction. The woman agreed with me that I am awesome, and transferred me to a rate specialist, whatever that is. I had to give the new woman my spiel over again, which I poured out really fast, and then the woman told me I should transfer the balance to their competitor, that was a good rate. I was sad. (Of course, I could transfer the balance and we’ll get to that later, but I wanted to win this too). Then, when I asked if there wasn’t any possibility of lowering this rate, she said indeed she could lower it, from 10.9% to 9.9%. Hardly a difference, but it was truly a moral victory for me. I hung up very jazzed about myself, and sure enough, a few days later I got a letter in the mail with my new lowered interest rate confirmed.

This set off a chain reaction in me, I started doing all sorts of things outside my usual comfort zone. I talked to people I would have been nervous to approach before, I submitted posts to the Carnival of Personal Finance, I volunteered to host the Carnival of Debt Reduction, I bought a domain name…. the list goes on, blogging and non-blogging related. It really turned some kind of switch in my head. If I could face down the credit card people, I could, well, do anything I set my mind to.

The challenge continues, and I continue to participate. Week 3 involved setting up a twice a month vs once a month payment schedule, which I am going to try in September, and weeks 4 and 5 answered questions and prepared us for the next step – consolidation to a 0% offer (which I already obtained a new card with a 12 month 0% offer to do so with). I will continue to read the new steps in the challenge each week, and I will beat this debt down little by little. Hopefully I will pay it off before my 0% offer expires. That’s my new goal.

Thanks David for starting the challenge. It truly has helped me grow as a person.

Since this post was written, Paid Twice has paid off her CC debt. Congrats!!!


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Comments (5)

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  1. Lynnae says:

    Good for you! Doesn’t it feel awesome when you convince the credit card company to lower your interest rate? It’s empowering!

    Now I need to go find out about this challenge…

  2. glblguy says:

    Good for you! I did this with Chase about 2 weeks ago. Same deal as you, only a point, but it was something!

  3. This is a good time to ask for a lower interest rate but the door is closing as the delinquency rate on Credit Cards is moving up (4.58% of payments were written off in the first six months of 2007), and Credit Card issuers will be scrambling to maintain their balance sheets for Wall Street. The main way to make up for losses is to keep interest rates as high as possible for those who do pay their bills on time.

    If you’ve made at least 12 ontime monthly payments, you are a candidate for a lower interest rate under normal conditions.

    Quick Tip: If they tell you no because you are at the lowest rate your “card program” allows, ask them to move you to another Card. Most issuers offer many different types of card accounts and they may have different ranges of interest rates they offer on the low end. Your credit score still ultimately controls what they will let you do, but by asking to be moved you may get the lower interest rate without having to apply for a new card.

    Mike about Money

  4. […] interest rate I was paying. This is something I should have done a long long time ago, and I credit David at My Two Dollars for giving me the final kick in the pants I needed to accomplish it. Calling my credit card company […]

  5. […] Tricia wrote an interesting post today onHere’s a quick excerptOn July 16, David started his series right here at My Two Dollars called “The Start Digging out of Credit Card Debt Challenge”. I am in a pretty significant amount of debt, about $5500 of it credit card debt. … […]

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