CC rate increases
 

This shit is really starting to piss me off! Anybody else dealing with this variable rate bullshit with their card company? I had 10% interest with WellsFargo and they shoot me up to 15%. CITI went up to 23%! WTF is with these people? I owe practically nothing on them but still! So I decided to consolidate my small debts onto my Chase card which has been at 6.24 for the last...what...3 years? Now.....they are changing it to 13.24%! Fucking bullshit. Now I'm stuck with what I should do next. After talking with Chase, it appears you can close your account now and keep making payments on your debt at the current interest rate until your debt is paid off. So the question is...close that account and start another one with a promotional offer? Or just keep it closed and stop using cc's period?

I use cash.

If you have no credit cards and are not paying a mortgage or anything. Then its hard to maintain credit. Its best to just have a card and keep the balance low to none on a revolving basis. That shows companies that if they lend you money they will get it back. If you cancel all your cards then when they pull your credit history they will see that you have none, and your rate will be higher.

Well, thanks to school and what not, I owe a little on my chase but nothing that I can't manage every month. I'll probably just keep paying it off even when it does...double.

Me and the wife have 1k limits on our cards. We only have 3. Only use 2, 3rd is for emergencies only. Usually never put more than 300-600 on them. When we do we usually pay it off within a few weeks. Haven't been charged interest or any fee's yet. We also have a mortgage. All cars bought for cash. I try not to owe people money aside from mortgage. That way I don't get in trouble. Last time we checked scores both were over 760. I think that's pretty good.

just pay it off sooner. I know all about college cc debt. It blows dick. The rate on the citicard I have from college is at like 29% or some ridiculous highway robbery number. Its PIF and I just use it every month to pay for gas. I also pay it off every month. So I never pay 29% on it and I still build my credit.

I'd say thats a great score, excellent actually. CCs are a good thing to have if you can be responsible with them. As a young man, like myself, they will help me build my score so when it comes time for me to buy a house I can actually get that low rate that they advertise and not something a couple points higher.

I've paid my way out of a $12k cc debt once in this lifetime...never again. That was at 20..I learned.

One credit card between us...paid in full every two weeks. Super low interest...and we threaten to cancel every time they threaten to raise it.

rates dont matter if you dont carry a balance.

but

times are hard. people want credit card companies to not be dicks. so this is how they repay you.

stop taking their money and not repaying it. :fawk:

+1...I charge everything (points baby ;)), but pay every penny back at the end of the month. If I can't afford it, it doesn't go on the card...

I learned the hard way a long time ago with credit cards. Ran my credit through my new credit union last week and I am only 7 points away from paying ZERO closing costs when I buy a house in the near future. They are also offering me a revolving line of credit at 5% fixed interest that will likely bump my score up another 15 points or so. I have paid cash for all 4 Miatas and every part I put on them, and have no sympathy for credit card racers.

Your credit card companies are likely trying to make as much as they can before they are regulated at the beginning of the new year.

Living within your means and not having a credit card at all are not the same thing.

I have one credit card. I have always had one credit card. It's quite likely that I will continue to always have one credit card, or whatever equivalent technology supersedes it. (Employer-issued corporate cards don't count.)

For the majority of day-to-day stuff (gas, groceries, restaurants, personal lubricant, etc) I use my debit card. I do this primarily because so long as I make 12 or more transactions per month, I get a 4.5% APY from my credit union on my checking account balance. (You could actually make money by getting a HELOC and depositing it. I wonder if anybody has actually done this?)

For things like internet or phone-based transactions, I use the credit card. This is principally because credit card companies provide a relatively high level of protection from fraud in the form of limited liability. You don't get that from a debit card, even if it says "Visa" on the front. I also use it for certain applications where a credit card is required, such as car rentals. As it happens, my card issuer also provides me with complimentary car rental and travel insurance.

About once a month or so I try to remember to log on and zero my CC balance. They really do make it quite easy, just key in a transfer from the checking account and hit "OK".

I don't think I've ever looked at what my rate is until today. It's Prime + 3.9%, minimum 9.99%, maximum 19.99%. So it's 9.99% now, which is the same as it's been for a while. (The prime rate hasn't been over 6.09% since Jan, 2008).

But it doesn't matter, since I've never paid it.


Before you nay-sayers tell me "By never carrying a balance, you're not establishing credit" you need to read up on how the rating companies work.

Short version: It is the ratio of credit used to available credit that matters.

In other words, let's say that I have a credit limit of $50,000, and on average, I have a balance of $1,000. (This doesn't mean that I carry that $1,000 balance across a full month and thus pay interest on it, merely that over a 30 day period, the average balance was $1,000.) I am using 2% of my available credit. This is considered a good thing, because it means that I don't tend to overspend. Thus, a lender can happily give me a loan to buy another boat and be reasonably certain that I will be able to pay it off. (Not that I'd take out a loan for something like that. Cash is king when it comes to luxury goods.)

But what if my credit limit is only $1,500 and yet I have the same average balance of $1,000? That would be a bad thing. I'd be using 66% of my available credit, and this indicates that I do tend to overspend relative to my ability to pay. I am thus a high-risk borrower, so no boat for me. A canoe, maybe.

Credit utilization (that which we have discussed above) accounts for 30% of your credit score. Payment history (including mundane things like your phone bill) count for 35%. In other words, being a chronic late-payer of bills is worse than having ten credit cards all maxed out and making minimum payments. The rest is length of history (basically, your age), diversity of credit products previously utilized, and number of recent inquiries. (Applying for credit hurts your credit. Gotta love that one.)

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Last time I checked (which was a year or so ago) my credit score was somewhere in the high 700s. This, despite the fact that I haven't made a car payment since ~2002, or a mortgage payment since 2004.


I'm glad that we could have this little chat. Shalom.

Personally, I think the new regs suck. The CC companies not being able to rape stupid people means that they're probably going to have to cut back on some of the perks that responsible card users are afforded.

Thankfully I have Joe Perez who is much longer winded that I to fill in all the gaps that I left.

To be completely honest I never knew that using say, 60% of your total allowed credit makes you an "overspender". Guess I'll have to raise my credit card limit so that I'm at 30% or lower. Thanx JOe

Obviously I have no idea what the actual limits are. I picked some numbers out of the sky, and the percentages just ended up being whatever they were.

The idea was to illustrate the general concept, not to provide specific guidelines. But you're correct in that, all else being equal, raising your credit card's limit will improve your credit utilization ratio, assuming that you spending habits remain consistent.

Now that I think about it, I probably should do this. When I signed up for my current card, I requested a $10k limit, which was the lowest available for that class. Normally I don't go anywhere near that, but now that I'm freelancing, these NYC hotel bills are probably making me look bad...

When I was working in NYC for work, I would stay across the river on the NJ side of the Lincoln Tunnel in Secaucus. There is a Hampton Inn there that is pretty nice and only runs like $120/night. If you are staying in Manhattan you are getting raped. Even if you are being reimbursed, its hard to have those bills sitting on your card while you wait for a check.

Yeah, I know there's a bunch of stuff over there, but PATH can suck my ass. When I'm in town for a month or two at a time, I really don't want to have to deal with the commute every day, especially since I do occasionally get emergency calls in the middle of the night. Much easier if I'm in midtown near the 1/2/3 line, or in SoHo / the village, within walking distance.

I just need to be more disciplined about transferring funds to the card as soon as each big charge hits, rather than waiting until three or four of them have stacked up. I just logged in a while ago (while checking the rate for the previous post) and saw that there was $6k on the tab since Oct 1. Zeroed it.

(That's not all hotel, of course. A couple of airplane tickets, a rental car here in CA, and a couple of computers were on there too.)

I guess if you are worried about the commute then that kills it for you. For most of the day the Lincoln Tunnel is a quick minute crossing. Even at like 3pm I was able to go from my hotel in Secaucus to the Verizon Wireless across the street from Bryant Park in like 15min.

All that shit was in your contract you should realy read those things before you sign up for them.

+1.

And while we're talking about credit cards, I just wanted to add... Capital One FTW! I somehow forgot to pay my bill one month, called them up, told them what happened and they said "No problem sir, we understand that things happen from time to time, we'll go ahead and waive that fee. Thank you for your business and have a great day." Plus you can add your own picture... I've got this super cute Miata credit card :giggle:

I have a friend whose father is retired and does shit like this for fun. He got an offer a couple years ago for a 0% APR for 12 months on a new card. He got one for himself, his wife, his wife's business, my friend, and my friend's sister (his daughter). The credit limit on each was $30k because he's never carried an interest-accruing balance in his life. He then took the $30k x5 credit line he had just opened, called Charles Schwab, and purchased 5 $30k 10-month CDs, each paying something like 4%. You do the math. :makeout:

He said there is nothing more satisfying than investing with someone else's money.

He made 6k in 10 months?

Like I said, he's retired and has nothing better to do.

I love pie.

I also have this lame credit card from Wells Fargo from when I was in high school that came with the account I got back then. A few months ago they dropped the credit limit from some huge number to some wimpy number.

A few weeks ago they raised the interest rate.

I carry zero balance on it--I think it only is connected to my PS3 wallet when I buy games--about every six months I spend 9.99.

But as joe's pie shows, length of account history is key. no annual fee means this account will languish forever!!

thats why you never close a CC, ever.

Unless some hooker steals it.

Frank

close the card #, not the loan! then get a strong pimp arm.

I was just making sure my math was right:D
6K for just sitting on your ass sounds good to me:)

gotta get that obama money.

wowwwwwwwwwwwwwwwww

I'm pretty sure he just has a big money printer... right? :vash:

Capital one FTW? Riiiiight

I have a card with them, yes I carry a balance, but I make sizeable payments on it every month. Never paid late. Never pay minimum. Never been over my limit.

The rate jumped this spring from 9% up to 15% out of nowhere. I just got a letter the other day, now its going up to 25%. Wtfz gives?

they want their money back and increasing the APR gives you more motivation to give it back.

pretty simple idea, at least they don't break fingers.

What gives is that for some reason, a certain segment of the population finds it acceptable to rely upon revolving credit as a means of financing everyday expenditures.

What's interesting to me is that, almost without exception, we stand as one to decry deficit spending on the part of our government.

"Hello, Kettle? Pot here."

We then turn around and blame the third party which enabled this behavior, calling them evil simply for doing exactly what they told us they reserved the right to do when we first signed up.

You need to tone it down a little. You're saying too much truth. We don't like truth. We just like to blame everyone else:D:D:D:D

assuming that my balance is revolving = false assumption

nowhere in there does it say that i have to pay it off in a certain amount of time. sure, i could drive around in a stock escort and have it paid off by now, but then i'd be bored as hell since this is my only hobby

no the debt is not from the car

as the bankruptcy rate increases, so will your apr. It's happening to everyone, you're not the odd man out.

You just said that your balance is revolving:Carrying a balance of any kind across the boundary from one billing cycle to the next = revolving credit.


Of course, I never actually said that you were a user of revolving credit, I just said that some people are. Denial without accusation is generally held to suggest admission. :D

its just amazing to me that they are a c*nt hair away from my default rate and i haven't even technically done anything wrong. every rate increase has been "due to current market conditions"

when you said revolving i assumed you meant that i have a big balance, i pay off some, i buy more stuff, pay off some, buy more stuff, and the balance never really changes.

this is not the case. i have a balance which i am working to pay down.

My impression is that you are assuming that credit card companies adjust their interest rate only in response to the spending and/or payment habits of the borrower. Or at least, that they ought to behave in this manner.

In reality, nothing could be further from the truth.

When you signed up for the card, the lending institution disclosed to you the fact that they would charge you an amount of interest between certain upper and lower limits. They may or may not have provided any explanation of the decision-making process which would be employed to determine what rate to charge within these constraints. (I honestly don't know if they're required to disclose this, as the exact method could be considered a trade secret.)

Thus, your rate may be going up as a result of the CEO's cocaine habit, the phase of the moon, a change in the size of Equador's marmoset population, or as a last-ditch effort to grab as much cash as possible before the new regulations go into effect. Unless your interest rate is tied to an external metric (such as the prime rate) then any of these reasons are sufficient grounds for a rate adjustment.


Know also that so long as a balance of any kind exists, the credit card issuer may charge interest based upon the entire original amount of each transaction which remains partially unpaid.

So if you bought something which cost $1,000, and have by this point paid the balance down to $1,000, you may still be accruing interest based upon the original $1,000 principal.

Ever since this semester started and things around here really went down...and my hours got cut...I think my credit situation has turned into a revolving credit. But now that I have this new cooking job where I actually make decent money and have a shit load of hours, I'm going to get this thing paid back down to a resonable level. I seriously accumulated around a grand in debt or more since August because my income got cut by about 2/3 because of this fucking economy. I will NEVER wait tables again! Now I'm in the kitchen at a Holiday INN, and have been making more money that I used to make when waiting tables was good.

aren't you glad obama fixed the economy?

Even the College Station economy is down...that's bad news folks.

Still waitin' on Obama to pull more cash from his stash...

79.9% interest. That's a hell of a business model.

Credit card's newest trick: 79.9 percent interest - Yahoo! Finance

I have shitty credit because I only pay cash for any and everything. I haven't had a car payment since 2001. The only notes I carry are student loans.