How do I lower my interest rate on an account that was closed by the credit card company?

I received a letter in the mail stating that CHASE- credit card company decided to close my account. Although I've never missed a payment, and actually have another account with them, the reason given was something along the lines of my balance remaining too close to my credit limit. Fine! But now, how do I get them to drop the interest rate from 26% to something more reasonable so I can pay off this unusable card?

One option you have is to contact Chase and try to get them to reduce the interest rate. However, many consumers find it really difficult to get their interest rates reduced. Typically, the creditor is satisfied with a consumer making the minimum payment on a high interest rate credit card because they generate a substantial amount of revenue. There are several options available to consumers who are having struggling with their unsecured debt. Below I will provide you with an overview of the several different options.

Since there are a variety of debt resolution options, including credit counseling, debt negotiation/debt settlement, a debt consolidation loan, bankruptcy, and other debt resolution options, it is important to fully understand each option and then pick the solution that is right for you.

Credit Counseling
Credit counseling, or signing up for a debt management plan, is a very common form of debt consolidation. There are many companies offering credit counseling, which is essentially a way to make one payment directly to the credit counseling agency, which then distributes that payment to your creditors. Most times, a credit counseling agency will be able to lower your monthly payments by getting interest rate concessions from your lenders or creditors.

It is important to understand that in a credit counseling program, you are still repaying 100% of your debts -- but with lower monthly payments. On average, most credit counseling programs take around five years. While most credit counseling programs do not impact your FICO score, being enrolled in a credit counseling debt management plan does show up on your credit report, and, unfortunately, many lenders look at enrollment in credit counseling akin to filing for Chapter 13 Bankruptcy -- or using a third party to re-organize your debts.

Debt Settlement
Debt settlement, also called debt negotiation, is a form of debt consolidation that cuts your total debt, sometimes over 50%, with lower monthly payments. Debt settlement programs typically run around three years. It is important to keep in mind, however, that during the life of your debt settlement program, you are not paying your creditors. This means that a debt settlement solution of debt consolidation will negatively impact your credit rating. Your credit rating will not be good, at a minimum, for the term of your debt settlement program. However, debt settlement is usually the fastest and cheapest way to debt freedom, with a low monthly payment, while avoiding Chapter 7 Bankruptcy. The trade-off here is a negative credit rating versus saving money.

Debt Consolidation Loan
Many people think first of a debt consolidation loan when seeking debt consolidation. This option typically means a second home loan (or home equity line of credit) or refinancing your primary mortgage. In a debt consolidation loan, you exchange one loan for another. The most frequent form is taking out a mortgage loan, which carries a lower interest rate and is tax deductible, to pay off high interest rate credit card debt.

It is important to be aware that shifting unsecured debt to secured debt can create a volatile situation, if there is ever a chance that you cannot afford the new mortgage payment you are now putting yourself at risk of foreclosure! In the case of a debt consolidation loan, most mortgages are 30-year loan, which means that the total cost and the time to debt freedom could be very high, but the monthly payment will be lower than other options and there is no credit rating impact.

Bankruptcy
Bankruptcy may also solve your debt problems. A Chapter 7 bankruptcy is a traditional liquidation of assets and liabilities, and is usually considered a last resort. Since bankruptcy reform went into effect, it is much harder to file for bankruptcy. If you are considering bankruptcy, I encourage you to consult with a qualified bankruptcy attorney in your area.

Default
You may be curious what may happen if you do nothing. If you stop paying your unsecured debts, creditors have the right to collect the debt. First, you will likely receive collection calls and letters from the creditor directly. If you are still unable to pay the debt after several months, the creditor is likely to refer the account to a third-party collection agency.

Third-party collectors are known to be much more aggressive in their collection tactics than original creditors, so do not be surprised if the calls become more persistent, or even threatening. Thankfully, the Fair Debt Collections Practices Act has rules governing the behavior of collection agents. However, unscrupulous debt collection agents do not follow these rules.

In some cases, when all other collection efforts fail, a creditor will decide to file a lawsuit against the debtor. This is not a frequent occurrence, but it is within a creditor's rights and a possibility about which you should be aware. If one of your creditors sues you, the court will

Is there no way you can pay this off?
I hope you know that the best way to get top scores is to pay in full each month.
When you never carry balances - you never pay interest and get amazing credit.
Could you make every single effort to pay this off?

Remember: It is not just the Chase that thinks you are a risk.
Employers also check reports, so do landlords, and car insurance companies (you'll pay more).
Sit down and make a plan just to pay off these cards.
No more going out to eat, movies, not even cokes - just water until you can pay this off.
Get serious about it and turn your life around.

By carrying balances you are making yourself poor and the banks rich.
And it ruins your credit and in some cases your life.
.

You ask. Only Chase can lower it.

Actually you do have options with Chase directly. You need to call them and let them know you are experiencing some type of financial hardship. They do have a plan available to lower your minimum monthly payment and interest rate so that you have a fixed payment and your account will be paid off in, I think, 5 years. You have to explain that your income is reduced and the interest is too high making it hard for you to keep up with the monthly payment. Call them first and see what they have to offer. I worked for a different bank and I have spoken to many customers of Chase who said they have taken advantage of this assistance. Oh, one thing they do say is, if you are on the program and you miss one payment by the due date your interest rate will go from 0% back to the original rate you had before you started the program.

first for Judy, make that tap water.

now for the real answer: probably not. unless you are actually in default, they have no incentive to reduce your rate. last summer, chase tried to raise my rate to 28% on a zero balance. my FICO is in the 750 range. told them to.. well you can guess what i told them.

as Judy said. pay it off. as i say, live within your means. CC's should be for emergencies or very short term items that you can afford for real. carrying a balance for more than 1 billing cycle is near credit suicide.

You can call Chase and ask but don't count on getting a lower rate. It is obvious that they closed the account because you have been carrying a large balance for a long time and only making minimum or slightly higher payments. This makes you a higher credit risk. That's why your interest rate is so high. They closed the account to limit their exposure

If you still have another account with Chase and similarly carrying balances, don't be surprised if they close that account too.

You need to tighten your budget and put every penny you can squeeze out of that budget on this card, while making minimum payments on the rest. Find ways to bring in more cash -- have a garage sale, collect alum cans, get a second job. Throw it all at the debt.

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