Joe wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.
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“Dear Steve,
Well I have a fair amount of credit debt about 50 grand, half of that with citibank, I have always paid my bills but now Citibank has raised my interest to 24.99. the payments are now truly more than I can pay. I own a home (which i make payments on and is not in any danger).
I am not sure what to do, I wonder if that would lower my interest if I asked or is this a waste of time? So basically my question is: what should I do? some debt consolidation or bankruptcy? If bankruptcy will I endanger my house?
Joe”
The Answer:
Dear Joe,
I think Citibank is sending you a very clear sign that they don’t want or value your business. The jacked up interest rate is not designed to keep you as a customer. It is designed to make as much money off of you as they possibly can.
Additionally the heightened interest rate could reflect how risky Citibank views your account. The higher the rate, the higher the risk.
You have five basic choices here:
- Beg and grovel with Citibank. That’s not going to work as you’ve found out.
- Pay off the balance. But if you could have done that you would have.
- Look for a different card to transfer the balance to. There are still good offers out and about. Click here to find one for you. This will allow you to protect your credit.
- Enroll in a debt management program and you will get lower interest rates but it will hurt your credit.
- Say ‘F’ It and just throw in the towel and go bankrupt. Only a bankruptcy attorney can tell you how bankruptcy might impact the house. Click here for a free bankruptcy consultation.
Let us all know what you decide to do.
Steve