09-28-2009 03:13 AM - edited 09-28-2009 03:48 AM
I received a letter from Chase today that simply stated said we aren't making any money off of you so we are rasing your interest rate.
They are raising it from 6.99+ Prime (9.24) to 12.99+ Prime (16.24). I haven't been in the credit game for very long as I am only 19. I have 2 cards. Chase is my oldest at 18 mos and a 1100 CL. Wells Fargo is 15 mos and 1000 CL. I mostly PIF but I have been carrying a balance now because I hit a rough spot. I want to close the Chase account as I have never been late and am an excellent customer always paying abouve minimum and like I said in Full for the most part. Their lack of customer appreciation frustrates me. I want to close the card... Thing is it's my oldest and has my highest limit. What should I do? There is no way to pay in full at the time and the increase is set for Nov 1. If I opt out they cancel card but I get charged my original rate. Help...?
Hi, elargent! Welcome to the forums!
I'm probably going to get admonished by someone here for being insensitive, preachy, know-it-all, or something...I'll risk that, because I feel that this needs to be said. I'm not trying to offend you, so please take this as if it's straight talk from an older brother who cares about you.
Chase is not your oldest card, it is your older card. You only have two. At 19 yrs. old, you're lucky to have those, especially with limits exceeding $300 or $500, and with prime credit card issuers. You are fortunate to have these cards at any APR. Look around these boards for a bit, I think you'll discover there's lots of folks who'd love to have those two cards of yours.
Paying in full is not a ccc rule. You are not required to do that, PIF merely avoids finance charges. In your case, even if you maxed out your Chase card, the new interest rate would add only $6.42/mo to your balance. If that $6.42 puts you over the edge, into a financially untenable position...well, you may want to take a hard look at your finances in general, and your use of credit in particular.
I don't know what sort of "rough spot" you've hit. Usually, for someone your age, the "rough spot" means, "I've spent all my money on something else". It usually doesn't mean you're out of work, incapacitated, or homeless. It means you've got a brand new iphone or sound system or something else you "really need".
Take a step back, take a look at how much you make, and where it is spent. If you don't know, start keeping track, right now. To keep your Chase account in good standing, you only need under 2 bucks/day earmarked for payments to Chase. Not a major hurdle.
Don't spend money you don't have. Stop using the cards. Pay off as much as possible, as quickly as possible...to the point where you feel like a pauper. If and when you get both these balances to zero,think twice before charging anything again, and know where the money will come from to pay that bill.
You don't need help. You need self-control here, and an understanding that credit is not free money, and repayment is a major part of "the game".
Please get a handle on this today, before you mess up so early in your credit life. Concentrate on limiting your spending and paying your obligations, and not on judging the credit card companies and shuffling your debt from one to another.
I wish you the best, and I hope you really think about what I've just said to you.
Edit to add: BTW, I just noticed the math is wrong. Your current rate is 10.24 (if it's prime + 6.99), which means only $5.50/mo increase due to interest IF the card was MAXED at $1100 limit, even less at your $800 current balance ($4/mo difference).
09-28-2009 04:08 AM
As previously suggested, ”DO NOT” close the account.
You must remember beginning February 22, 2010; you will be required by law to jump through a couple additional hoops in order to obtain a Credit Card or Open End Credit Plan.
You have stated: I haven't been in the credit game for very long as I am only 19, I would suggest you obtain a complete copy of the new law to see how this might affect you personally.
Section 127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) is amended by adding at the end the following:
‘‘(8) APPLICATIONS FROM UNDERAGE CONSUMERS.—
‘‘(A) PROHIBITION ON ISSUANCE.—No credit card may be issued to, consumer credit plan or open end established by or on behalf of, a consumer who has not attained the age of 21, unless the consumer has submitted a written application to the card issuer that meets the requirements of subparagraph (B).
‘‘(B) APPLICATION REQUIREMENTS.— An application to open a credit card account by a consumer who has not attained the age of 21 as of the date of submission of the application shall require—
‘‘(i) the signature of a cosigner, including the
parent, legal guardian, spouse, or any other individual who has attained the age of 21 having a means to repay debts incurred by the consumer in connection with the account, indicating joint liability for debts incurred by the consumer in connection with the account before the consumer has attained the age of 21; or‘‘(ii) submission by the consumer of financial information, including through an application, indicating an independent means of repaying any obligation arising from the proposed extension of credit in connection with the account.
Food for thought.