A reader calling herself Florida Girl dropped a line recently to share her story of financial woe. Though she’s beginning to get a handle on her finances, she’s struggling to cope with the cost of her past choices. She needs help.

I’m struggling to keep up with the minimum payments on my credit cards. Unfortunately, I’m paying for past mistakes. I no longer shop and spend recklessly, but the aftermath of my past life left several cards with balances and very high interest rates. Due to increases in the cost of living (rent, insurance, groceries, etc.) I’ll soon be unable to make even the minimum payments on some of these cards.

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I’m prepared to call each card company individually and try to negotiate some payback plan, but am unsure exactly how to go about that. What should I say? How demanding should I be? What shouldn’t I say? What should I do if the banks won’t work with me? Should I pay only what $30 when the minimum is $120 — or not pay anything at all?

I’m well aware of my mistakes and I’ve learned from them. I’m trying to find part-time work, but in the area where I live there’s a lot of unemployment, so I’m lucky to have even one job. I won’t give up trying, but it might be some time before I can increase my income. I’ve cut my living expenses as much as I can. And as I get some of these smaller balances paid, I can apply more to the bigger ones.

I’m not asking to have my debt erased or forgiven. I plan to pay every dime spent on credit (and never use credit cards agaiwn), but 24% and 29% interest is making it almost impossible!

The burden of credit-card debt can be soul-crushing. If you’ve never had to struggle with thousands of dollars of self-inflicted wounds, I’m not sure you can really appreciate how awful the experience can be. (All the more so since you’re usually aware that your own actions are the source of the problem.)

When I was drowning in debt, there were times I felt like giving up. In the end, though, my solution was use a home-equity loan to pay off my credit cards (not necessarily the smartest choice), and then boost my income to pay it all off. It never occurred to me to call the card issuers themselves to ask for help. Today I realize that many people have done this, often with success.

First actions
My first thought was that Florida Girl should call the credit card companies and ask for lower interest rates. Bob at ChristianPF has put together a short guide that explains what he did get lower card rates. Jean Chatzky’s Pay It Down! (which may be available at your local library or used bookstore) also describes how to negotiate lower rates. (Ramit at I Will Teach You to Be Rich also has some info on negotiating bank fees that might be usable in this situation.)

But while asking for lower rates may help in the long term, it doesn’t change the fact that Florida Girl has trouble making the minimum payments now. I’m not certain that’s something credit cards are able or willing to budge on, which means she may have to look for other solutions.

What sorts of solutions? If she has good credit, Florida Girl might consider transferring her balances to a card (or cards) with lower interest. Believe it or not, if you have good credit, there are still 0% balance transfer credit cards to be had. Though these rates are temporary, they could buy time for Florida Girl to pay down her balances so that when higher interest rates do kick in, the debt is more manageable.

Desperate measures
Since Florida Girl isn’t struggling only with credit-card debt, but also having trouble just making ends meet, it may be that she doesn’t have good credit. What should she do then? For advice on last-ditch scenarios, I turned to credit expert Liz Weston, who writes a popular personal-finance column and is the author of the excellent Your Credit Score. Liz wrote:

Anyone who is struggling to pay the minimums on credit cards needs to make two appointments:

  • One with a legitimate credit counselor (one affiliated with the National Foundation of Credit Counseling)
  • And another with an experienced bankruptcy attorney (who often offer free or discounted initial sessions)

The credit counselor can let you know if you qualify for a debt management program, which would allow you to pay back your debt over time at a reduced interest rate, but he or she probably won’t talk to you much about whether bankruptcy might be a better course. The attorney can do that. By talking to both of them, you get a much better picture of your options.

Some people are able to negotiate workout programs directly with their credit card companies. My concern is that by the time you realize you’re struggling to make your minimum payments, you’re already in pretty darn deep. It’s not just the interest rates that are killing you — it’s the amount of debt you racked up. People in that situation often aren’t realistic about what they can really afford to pay. They may start out with good intentions but then fall behind on their new payment plan at the first bump in the road. (I’m talking here about the workout plan with the creditor, but the same thing is often true of debt management programs with credit counselors.) Then the borrowers may be worse off than if they had filed for bankruptcy, because the creditor may revoke the program and they’re still stuck with the debt — plus the payment plan means they’ve thrown more money at a debt that may have been erased in bankruptcy.

But all of this advice is just theory. I don’t have real-world experience with this stuff, and I don’t think Liz does either. What Florida Girl needs is feedback from folks who have been there.

Have you negotiated with your credit-card company? Have you convinced them to lower your interest rates? To drop you monthly payment? To set up a payment plan? How did you do it? What did you say? What did you do wrong, and what did you do right? What can Florida Girl to in the short term so that she can buy time to let her new financial habits do their thing?

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