Your bad credit is not a death sentence for high interest rates. In fact, it may actually help you get lower rates.

Many major credit card companies actually provide lower interest rates to cardholders that have bad credit and poor payment histories. They do this to help the cardholder prevent defaulting on the debt by filing for bankruptcy or going to collections.

If you have bad credit and are getting hammered with brutal interest rates, consider if you are ready to get out of debt. If your credit card debt is becoming a huge burden, then you might want to consider taking action.

Here are aspects that can qualify you for lower interest:


Higher debt balances
Close to or over credit limits
Late payments
Can only afford minimum payments

Credit card companies will also consider special circumstances such as job loss or medical problems. According to Daniel Johnson, Accredited Financial Counselor for Personal Financial Network, these "life-changing occurrences may be taken into account to justify lower payments as well as lower interest."

The Catch

In order to receive lower interest rates granted by card issuers, you must be willing to stop using your credit cards. This means using cash or a debit card to make purchases, and only those that you can afford to make. Indeed, this is the first step to ending your reliance on credit cards.

If you have been using your credit cards just to pay for groceries and gasoline, then you are likely already exceeding your income. You may be asking how you could possibly be able to go without those credit cards when you need them just to get by.

Using credit cards may help you get by in the short term, but they are plunging you deeper into debt. The longer you go, the harder it will be to get out of debt and the fewer options you will have. Many people wait until bankruptcy is the only choice.

The key to this special debt management program sponsored by credit card issuers is that it allows you to make lower minimum payments. Most debt management clients find that their combined credit card payments drop by so much that they are able to afford to shop without using credit cards. That way, they can still afford the things they need without using credit cards.

If you think you might be eligible for a debt management program, consider meeting with a credit counselor to discuss your situation. Getting help now can help you save money each month and get out of debt.

Kenneth Long began his public service with nonprofit organizations in 2001. He has since conducted workshops teaching other nonprofit executives how to integrate credit counseling with volunteer tax preparation programs. Long is a graduate of the University of North Carolina at Chapel Hill and received his Certificate in Nonprofit Management from Duke University.

You may find more information on obtaining lower interest with bad credit.