Credit cards seem to be necessities to survive in today’s world. You can’t get a car loan or mortgage without a credit history and you can’t really get a credit history without a credit card. You could use your student loan or car loan as a history of credit, but if your student loan is like mine, you wish it would just go away.

I currently have one credit card. I have a Capital One Visa Platinum card which I have had for a few years. I opened this card a few months after my Citibank Visa was charged off and was given a nice limit of $1000.00. Apparently I didn’t learn the first time. Within the first week I charged the maximum on the card out and paid the second month’s bill late. There went my 0% introductory offer. I was the proud owner of a 19.99% APR albatross. I continued to make the minimum payments for a year praying the balance would go down. It didn’t. Since I was such a good customer by paying loads in finance charges, after one year, Capital One raised my limit to $3000.00. I went out again and charged the maximum. For about a year, I carried about $2700.00 balance paying the bill roughly on time +/- 1 week.

By the way, if you didn’t know, creditors look at the ratio of how much credit you have to how much you’re using. For example, if you have a $1000.00 limit and you’re carrying a $500 balance, you’re using 50%. There is a magic range that creditors like to see when you’re applying for certain loans; 90% is not very desirable. I’ve heard it’s less than 10%. Also if you didn’t know, it seems that creditors like to talk to one another. It seems that while I was in collections for defaulting on my student loan, Capital One didn’t trust me anymore and raised my APR to 27.75%. I started paying attention to my finances around August of 2007 and just about had a heart attack when I saw my Capital One bill. And you though 19.99% was bad. This is one very small step away from loan sharking. I continued to look at the credit card statement and noticed the minimum credit card payment was less than my finance changes. I was never going to get out of debt.

Step 2: Pay Down High Interest Debt and Lower Credit Card Interest Rates

Since September, I’ve been paying about $500.00 a month to pay the bill down. My finance charges were absolutely ridiculous and I’m an idiot for not catching this sooner. I finally have my balance down to $686.00. There were some recent expenses I had to pay using the credit card and I hadn’t used my credit card in over a year. I figured some usage is better than no usage. I am working to pay it down to $0.00. My plan is to be at $0.00 balance by mid January. I then plan to use the card for only up to 10% of the limit and carry a very small balance.

I have had “on time” payments (not reportable to credit agencies) for over one year and I am no longer in default on my student loan. I finished rehabilitation in September of 2007. Most of the negative reporting has already been removed. I’m still working with TransUnion to finalize the removal of any negative statements. EdFund is cooperating. I think it’s TransUnion in that they seem to status every few months. Since my credit card APR was so high and I am going to carry a balance for a few more months, I wondered if there was anything that could be done. I read somewhere on the Internet that you can call and actually ask to have your APR lowered. I figured why not. The worst they can say is, “no.” I called Capital One and they noticed I’d been good for a year and lowered my APR to 14.9%. Now I just have to continue making on time payments forever. Hey, when you’re in my boat, 14.9% is better than 27%.

The Internet posts are true. You can call your creditors and ask to lower your APR. You just need to be a relatively good customer and have a legitimate reason to lower the APR. Since Equifax and Experian don’t show collections anymore from my student loan, I look like a normal customer with an exorbitant APR. Still, it never hurts to ask. Try it and see. Also, if you’ve had damaging remarks made to your credit you may want to have your Free Credit Report provided to you so you know what is in there. I never used to care and now wish I did. I have some remarks that will be there until 2012. I will be 35 and paying for mistakes I made in my late twenties.