My wife has a high balance ($16k) on one CC, which has been fixed at 0% promotional, but will bump up to 5.9% next month. This card is at 50% utilization, but overall her CC utilization is less than 10%. Cap One just sent her a letter stating that due to "extraordinary changes in the economic environment" her purchase rate is going to jump to prime plus 10.65%, which is almost 3 times what we expected when the promotional rate ends. Her options are close the account and lock in the 5.9% until PIF or eat the extra interest charges. CapOne is "graciously" giving her a month to decide.
The question is: should we opt out of the card and lock in the 5.9% until paid off (thereby losing CL) or bite the bullet and pay the card off at the higher interest rate. She thinks she can pay off the principal in about 6 months. She wants to keep the card. I say dump it and replace it with a better CC company. Any thoughts would be greatly appreciated.
edit: Hi, Amoray, I hope you don't mind, but I bumped your font size up one. My poor 54-year-old eyes couldn't read your post.
I didn't change anything else.
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I say keep the card. Either BT the balance to another card, or eat the interest and get it paid off.
In these days, no one should be worrying about APR's once their balance is $0. Hang onto that CL --does she really have a $32,000 Cap One card??? --and treat the card as if it were a sluggish debit card. Use it for gas or something that she would have to buy anyway, and pay it off completely every month, or even every week.
And really, she needs to get in the habit of paying off CC's every month anyway, with the possible exception being very low or 0% APR BT's or initial purchases. Even with these, you should have the money in the bank to cover them, as you have found. I divided the balance of my BT by the number of months that the 0% promo lasted and religiously paid it down by that figure. Some companies will even impose the full period's interest if you don't PIF by the time the promo is up!
The interest rate is irrelevant if you don't carry balances. But no way would I walk away from a $30K+ CL.
Holy cats, if nothing else, we need her to keep it just to know that there really are high-limit Cap One cards!
In these days, no one should be worrying about APR's once their balance is $0. Hang onto that CL --does she really have a $32,000 Cap One card??? --and treat the card as if it were a sluggish debit card. Use it for gas or something that she would have to buy anyway, and pay it off completely every month, or even every week.
And really, she needs to get in the habit of paying off CC's every month anyway, with the possible exception being very low or 0% APR BT's or initial purchases. Even with these, you should have the money in the bank to cover them, as you have found. I divided the balance of my BT by the number of months that the 0% promo lasted and religiously paid it down by that figure. Some companies will even impose the full period's interest if you don't PIF by the time the promo is up!
The interest rate is irrelevant if you don't carry balances. But no way would I walk away from a $30K+ CL.
Holy cats, if nothing else, we need her to keep it just to know that there really are high-limit Cap One cards!
I say keep the card. Either BT the balance to another card, or eat the interest and get it paid off.
In these days, no one should be worrying about APR's once their balance is $0. Hang onto that CL --does she really have a $32,000 Cap One card??? --and treat the card as if it were a sluggish debit card. Use it for gas or something that she would have to buy anyway, and pay it off completely every month, or even every week.
And really, she needs to get in the habit of paying off CC's every month anyway, with the possible exception being very low or 0% APR BT's or initial purchases. Even with these, you should have the money in the bank to cover them, as you have found. I divided the balance of my BT by the number of months that the 0% promo lasted and religiously paid it down by that figure. Some companies will even impose the full period's interest if you don't PIF by the time the promo is up!
The interest rate is irrelevant if you don't carry balances. But no way would I walk away from a $30K+ CL.
Holy cats, if nothing else, we need her to keep it just to know that there really are high-limit Cap One cards!
In these days, no one should be worrying about APR's once their balance is $0. Hang onto that CL --does she really have a $32,000 Cap One card??? --and treat the card as if it were a sluggish debit card. Use it for gas or something that she would have to buy anyway, and pay it off completely every month, or even every week.
And really, she needs to get in the habit of paying off CC's every month anyway, with the possible exception being very low or 0% APR BT's or initial purchases. Even with these, you should have the money in the bank to cover them, as you have found. I divided the balance of my BT by the number of months that the 0% promo lasted and religiously paid it down by that figure. Some companies will even impose the full period's interest if you don't PIF by the time the promo is up!
The interest rate is irrelevant if you don't carry balances. But no way would I walk away from a $30K+ CL.
Holy cats, if nothing else, we need her to keep it just to know that there really are high-limit Cap One cards!
