01-30-2009 10:31 AM
Hi Matt and welcome to the forums
first- definitely tackle that high utilization. It is killing you.
second- don't do anything yet with the citi cards. The 9 months at 3.9% is very good and beneficial to you for paying down your balances even quicker. If you were to try to get a permanent apr, they will increase the apr. Take advantage of this low apr and get those balances paid off quickly. Afterwards, then call to get a better rate.
third- If you are opting out due to changes in your contract, you will have your card close and can not use it anymore (depending on the company, citi states at your expiration date on the card is when the card will close) and you will continue to stay in your current payment plan.
Just to note, this will reduce your available limit thus increasing your util% and reducing your score.
If they close the account because of adverse action, that is when they will demand that you pay immediately.
Hope this helps and keep us posted
01-30-2009 01:56 PM
Thanks oracles, I appreciate the reply. I know that high util% is killing me, I'm pretty sure that's why my jump was so high, from the 6.99 to 24.99%....the myfico score simulator said that if I pay off my cards over the next two years, my score will be between 750 and 780, so I'll definitely be on the right track.
I've got one citi card (citi professional) that they did not look at with retentions (I have a total of four cards, he gave me the 3.9% on 3 of them...I haven't had the professional but for maybe six or 8 months) and that has about a 2300 balance with an APR that is currently 9.99%...since that's the highest of them at this moment, I'm going to make smaller payments (say, $100 or so) on the other three cards and large payments ($500+) to the professional card until it's paid off, and then start getting my other cards paid down heavier once the professional is done with.
01-30-2009 08:42 PM - edited 01-30-2009 08:51 PM
Heres the back story, I called and had already played the conversation in my head 100s of times. I was loaded for bear with reason I shouldn't be rj'd. As soon as Ron answered the phone he disarmed me (he's good). I went on to explain I'd been a customer since 2000 and hated to opt-out and lose this card. He did the silence on the phone for 30 seconds thing and we proceeded to come out with the following:
I just got off the phone with Ron in the Maryland call center. He told me that my “Notice of Change in Terms” letter was flagged back in December and was null and void. It begs to ask, If I hadn’t called, would the rate increase have gone thru as planned? I don’t want to sound ungrateful though, he decreased my APR by 1% from its current rate and merged a higher grandfather APR into the new lower APR. He was very accomodating and pleasant to deal with. This wasn’t a back door number, just the one printed on the back of my CC.
My wife on the other hand NEVER received a notification (I know because I go thru all of the mail and have been made hypersensitive to these notices) and lo and behold her APR jumped to 24.99% from 10.49%. She had to opt-out to get her APR down but was told to call back in a couple months and reopen the account and she’d probably get an adjustment then. She followed up with a call to the back door number and got nothing but attitude, was asked how she got the number and she would have to call the number on the back of her card to speak with a CSR.
We're batting .500, I told my wife we'll call back in a month or so before her card expires.
01-30-2009 08:59 PM
01-30-2009 09:01 PM
I would have your wife call back now.
It is sometimes just a matter of speaking to the right person.
You will probably not get the same person your wife had to deal with and would get someone nicer.
It doesn't hurt to call again
02-02-2009 09:54 AM - edited 02-02-2009 10:06 AM
and lo and behold her APR jumped to 24.99% from 10.49%.
She had to opt-out to get her APR down but was told to call back in a couple months and reopen the account and she’d probably get an adjustment then.
We're batting .500, I told my wife we'll call back in a month or so before her card expires.
It is all part of the new rate reprising structure necessitated by the so called reform laws. There is no guarantee that an adjustment will be forth coming. The new law prohibits banks from raising the interest rates on existing balances.
It is my opinion that your wife's account now has a permanent rate of 24.99%. There is no reason for the bank to lower the rate since it won't be able to raise the rate after the new law goes into effect.
I have predicted that the banks will be willing to reopen many closed (opped out) accounts at the new rate. In your wife's case that is 24.99% The bank might however be willing to reopen the account with a limited term "promo rate" of somewhere between 10.49% and 24.99%.
I am pretty sure that the interest rates that we will be charged in the future will be mostly a series of temporary promo rates. So much for not being able to change the interest rate on current balances.
The really bad news is that I don't think that your (decreased) "permanent rate" will stay the same. i am pretty sure that your rate will be raised again before the new law goes into effect.
It is my belief that the only self defense strategy available to cope with the pain that the new law is already causing, is to pay down as much debt as possible before the law goes into effect.
People who have carried credit card debt for any prolonged period of time will most likely find themselves with terms similar to store cards. There will be high permanent interest rates, low credit limits, and frequent temporary lower interest rate offers.
The stipulation in the new law that banks can't change interest rates on existing balances is meaningless. The rates are going to be raised higher than they ever were under the old pricing system. The rates could conceivably be jacked up to 50% or higher with a generous temporary rate offer of 24% for 9 months on existing balances.
There will then be an outcry to "reform" the reform law. The special interest consumer groups responsible for the law will then be demanding that the "loopholes" in the law should be plugged.
Your sig says:Credit is okay but CASH IS KING!
I fully agree. Having the cash to pay off balances and subsequently paying in full is the best way to avoid the pain of permanent high interest rates on credit cards.
Credit cards used to be a means of temporarily delaying payment for purchases. The cards would usually get PIFed in a couple of months or so. The interest rates were rather high and people couldn't justify paying the extra money for every day purchases.
Those cards were simply being used as a temporary substitute for cash. Now that interest rates for revolving balances will be higher than ever many people will return to paying in full every month.
If a person does not revolve balances, in the future, he will probably have ongoing temporary (short term) low interest rate offers available.
I personally will have no problem with that state of affairs. Credit cards will again be used for convenience and short term revolving debt.
The people who cannot pay off their credit card debt in a timely manner will be forced into BK and the credit card system will still function just fine.
Cash is still King.
02-02-2009 05:13 PM
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