Fiance's credit card bomb...

Anonymous · ‎03-19-2009

My fiance told me last night that she has a credit card with over $6,000 on it and that in May her APR of 8% is going to go to 14%. How can a card company do this? I told her to call and see if they can keep her at 8% and if not that she should not agree and deactivate the card and pay the card off with 8% APR. RIGHT? BUT...

She has another card that is carrying a $0 balance and gets frequent flyer miles, and I was thinking of having her transfer the debt to the card that gets free miles, but the APR is 16%. I know that "we" can pay it all off right away but does this idea sound legitamate? Also, are there other credit cards out there where we could get some kind of reward back for transering at a lower APR?

Like most of us she was not thrilled to have to share this information with me, considering I may be paying over 2,000 of it, but I have had finacial trouble in the past and you guys are always there with great help and suggestions so thank you.

Creditaddict · ‎03-19-2009

1. if she chooses to opt out of the new apr, they will close her account and she should pay the balance off.

2. balance transfers usually would not qualify for whatever reward a particular credit card has (like miles) that is for purchases only.

3. if you don't just want to pay it off, I suggest a new card with a 0% for 12 months otherwise pay it off at the new rate and keep the old trade line but not before at least asking if there is anything the creditor can do about the new rate, what issuer?

Anonymous · ‎03-19-2009

The CC is Chase and the new APR starts in May. Any suggestions on what card to use? She has great credit and I would like to take advantage of any rewards if possible, or at least get something out of my 2,000+.

Creditaddict · ‎03-19-2009

Chase Southwest is the only card I know of that gives you rewards for doing a BT but you wouldn't be able to BT Chase to Chase.

I would suggest Citi, Bank of America for 12 month rate

CreditAble · ‎03-19-2009

@Anonymous wrote:
The CC is Chase and the new APR starts in May. Any suggestions on what card to use? She has great credit and I would like to take advantage of any rewards if possible, or at least get something out of my 2,000+.

If a person revolves balances or otherwise carries debt, seeking rewards is false economy. Why pay higher interest on rewards cards when carrying a balance? Even if one carries balances on a non rewards card and PIFs a rewards card at the same time the interest paid is far greater than the rewards received. The rewards card only serves to justify spending more "for the rewards". Spending less in order to pay down debt should be the focus.

The whole purpose of rewards cards is to motivate people to spend more so that they can get more "rewards". A plain vanilla credit card in my opinion is better for getting out of debt. The interest rates are usually lower and one doesn't justify spending more and staying in debt just to pick up a few pennies in rewards.

Generally there are never rewards given for paying off debt. You will get "something" out of your "2,000+". You will save all the interest that is being currently thrown away on the $2,000 portion of the debt. That is a far greater amount of money than a small "feel good" rewards credit. How much would you like to receive as a reward for paying $2,000 of debt that is already owed? One % of $2,000 would only be $20 dollars. Simply identify something that you will be purchasing that you don't really need that costs more than $20. You can reward yourself by not buying it.

moondog7324 · ‎03-19-2009

I thnk most care a bance transfer fee. With new card theyusually waive it during the first month. I wouldn't close the card because of the higher APR- but what I would do is get in the habit of paying in full every month and never paying intberest. Then it wouldn't matter if your APR is 8% or 29%.

fishbjc · ‎03-19-2009

Personally I wouldn't be paying off anyone elses debt unless we had an official marriage license. Of course, this is just MY opinion, so don't shoot the messenger!!!

CreditAble · ‎03-19-2009

@fishbjc wrote:
Personally I wouldn't be paying off anyone elses debt unless we had an official marriage license. Of course, this is just MY opinion,

Personally I wouldn't even get engaged to someone without first having full disclosure of all debts by both parties. A $6,000 surprise is not something I would like to have after asking someone to be my wife.

At this point showing each other their current credit reports might be a wise move just to avoid more surprises.

Of course, this is just MY opinion.

moondog7324 · ‎03-20-2009

@CreditAble wrote:

At this point showing each other their current credit reports might be a wise move just to avoid more surprises.

How romantic!

I should've followed my father's advice when he said " Marry a rich girl, Love grows cold, but money grows interest"

jaybird201 · ‎03-20-2009

Usually the fee for balance transfers are 1.9, 2.9 or even 3.9%, which for you would be something like $240 bucks.

If you decide on a card with a 0% APR for 12 months, you can sort of get around the balance transfer fee by doing the following. And be sure to read the entire suggestion before writing it off as stupid:

Open up an account on a US peer-to-peer lending website (Lending Club) or a US gambling site (Absolute Poker). Both of them let you make deposits to your account using a credit card, which you can subsequently withdraw either via check or electronic funds transfer. So, you just charge $6,000 to your new credit card with a 0% APR, request a check or transfer to your bank account, pay off the old credit card, and you're set.

I wouldn't make a habit of it though. A single transfer would go unnoticed however, multiple transfer in large amounts would be flagged as per BSA/AML (Bank Secrecy Act/Anti-Money Laundering) standards.

I've needed to make a couple balance transfers and I've done this a couple of times to avoid exorbitant balance transfer fees. Kinda sketchy, but it works.

Message Edited by jaybird201 on 03-20-2009 12:18 PM