What Is Debt Management Ratio
October 2nd, 2009
Question: How should I handle my credit card debt?
I have a card from US Bank with $4500 that I owe. I had transferred a balance to this card when I first got it since it had a 0% apr for 1 year. A few months ago they lowered my credit limit within $50 of my balance. I went over my credit limit since I did not know they had lowered it. I was charged a $39 fee and my interest rate jumped to 28.9%
I called and they refuse to lower my rate to a reasonable APR. I am tempted to stop paying on the card and negotiate the debt but I am worried of how bad that will look on my credit. US Bank recently closed the account so now I owe all this money on a closed account.
My credit score has really taken a toll in the past year. I have a high debt to income ratio and one really small collection ($79)from two years ago that I paid off.What are my choices? Please do not offer me debt management companies! I will not use them.
Answer: You will need to pay it back as per schedule. Credit card companies are know to reduce credit limits without any notice so this does not surprise me. If you stop paying, your credit will take a hit and other credit cards that you owe might change the interest rates on your accounts because of this default.
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Financial Ratios -- Debt Management
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