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GUILDERLAND - How high is your credit card interest rate?
"Umm, you know, I actually don't know!" said one Albany resident.
"I don't really know, isn't that terrible? I try to pay it up every month," said another local card-holder.
Some people may not know their credit card rates. But Colonie resident Tom Kurkjian knows all too well.
"I was late one time and my interest rate is close to 30-percent, which is obnoxious," he said.
Kurkjian spent 36-years teaching at Voorheesville schools. These days, he's getting a painful lesson in credit card roulette. Big changes in terms, that even has President Obama calling for reform. As consumers see interest rates spike when they miss or pay late on their bills.
"I paid late and then I used the same bank to try to get a low interest rate. But I didn't realize that if you went over the limit, you were also penalized." Kurkjian.
Reporter Beth Wurtmann also had a credit card with an interest rate close to 28-percent. She went on a mission to see what consumers can do to cut their credit card debt.
Wurtmann showed her own four credit card statements to Karen Dettbarn, who is the Albany branch manager for Consumer Credit Counseling, a non-profit agency that helps people with financial counseling and debt repayment plans. Her advice?
"My first suggestion for anyone if they're looking to pay down debts, is they need to stop using them entirely," Dettbarn said. She also advices to:
Use a debit card while you're paying off your debt.
Call the lender and try to negotiate a better rate.
Pay off your cards one at a time, with the lowest balance first.
And make sure you pay on time - by phone or on-line, so you won't depend on the mail.
Dettbarn also said if you transfer a balance from a high interest card to one with a low introductory rate, be careful. That appealing rate will eventually jump up, and the same rules often apply.
"If you were to miss a payment, that balance is a large balance, and that could easily double or triple that minimum payment," she cautioned.
"This is the one I'm most annoyed about - the Chase account," said Kurkjian, taking out a credit card from his wallet.
Kurkjian said his priority is paying down that card with the nearly 30% rate, to get rid of it.
"It's tough because you know that the interest rate you see each month, it's like, 'I'm paying that much?' It's just a shock. It just motivates you to get out of it, as soon as you can," he said.
Wurtmann had some success when she called Citi Advantage about her credit card with the nearly 28-percent interest rate. She said she told the company she would close the account if they didn't lower it. The rate was lowered to around 13-percent, on the spot.
It can pay to negotiate, and to have a financial expert review your credit card debt.
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