05-24-2012 11:56 AM
Just looking for some advice on how to handle this CC I have w/ HSBC (now CapOne). 5 years ago my DH had the bright idea to purchase a brand new Kawasaki motorcycle. Instead of getting a motorcycle loan through our credit union or bank he put this motorcycle on a HSBC CC. We have been paying this CC faithfully for the last 5 years and I am just done with it. With the economy and all the CC changes, our CL was reduced from 12K about three times to its current CL of 5k. That has done terrible things to my utilization because it looks like the card is maxed out. I am honestly frustrated with this CC. My solution is to just not pay this card and let it go. But I know that's a terrible choice. Its difficult for me because I save the $200 monthly payment or use it to pay other debt. I have thought about just closing the CC in the hopes that it will keep them from continuing to lower my CL. Any suggestions?
05-24-2012 12:44 PM - edited 05-24-2012 12:44 PM
If you let the payment go utilization would be the least of your problems.. not sure why this would ever be an option-
Close the account if you want the CL to stop dropping, once closed the CL is effectively 0 but will continue to report the limit before closure...
Anytime you carry a large balance for a huge amount of time you can expect to be limit chased by many issuers sadly
perhaps consider refinancing through a CU or bank on the bike?
05-24-2012 12:48 PM
The interest rate is not terrible. Its 9.99% for the motorcycle balance. The rate for other purchases is 19.99% which is only on a balance of $79. Honestly it is getting difficult to make the minimum payments. My DH got a new job so we moved from CA to IL. In the process I have become unemployed. With our reduced income it is often tough to send the payment to them. Especially when they keep lowering my CL!!
05-24-2012 12:53 PM
not sure how old the bike is or if its valued higher but as I said it might be worth going to the bank and refinancing that puppy into an installment loan
05-24-2012 01:32 PM - edited 05-24-2012 01:33 PM
My advice would be to try to refinance it. Just not paying anymore is going to screw you over long term. Probably immediately go to a punitive rate of 29.99% and it's definitely enough of a balance for them to try to get a judgment. In reaction to the change, your other credit cards can increase your interest with a 45 day (I think) warning even if you've never missed a payment with them. The derogatory of the lates you'll accrue will stay on your credit for 7 years. Utilization is a temporary issue, as soon as it's paid off, the problem is gone. The lates your talking about accruing will tank your score for a long time and make a lot of other things just plain unaffordable. We've been shopping for home owners insurance and my credit is making it downright expensive because where I live my credit affects how much I pay for insurance.
If the bike is just a recreational vehicle and you can't refinance it, then sell it. Sell jewelry, sell whatever it takes to pay it off. If you want to buy a toy, you buy it with cash. If you can't afford to pay cash, you cant afford to have said toy. Please note, this is coming from a person who has financed a sewing machine and a grand piano. I was a moron. I wasn't making enough to justify a $10,000 piano. Just because I wanted it didn't mean I should own it. Long story short, piano got sold and I got a second job to pay off that loan I couldn't afford. I haven't been able to afford to buy another piano and have now gone without one for 5 years despite taking lessons for 15 years. Playing the piano was what I did every morning when I woke up and as soon as I got home from work. Not having a piano has left a huge void in my life and I kick myself on a regular basis for ever trading in that old piano that was paid off for a measly $100 bucks to buy the one I couldn't afford and ended up having to sell anyways. Lesson learned, never put a toy on credit, unless you have the cash to pay off immediately and are just running it through for the points/rewards.
Current Cards: Cap 1 Journey $3000, Cap 1 Playstation $2250, WFNNB Store Cards $2450 combined, Target $700, CareCredit $1700, Barclay Rewards Plat. Mastercard $1800, Old Navy $300, DCU Platinum Rewards Visa $2000, Swagbucks Rewards Visa $1000
Starting Score: 615 EQ (03-15-2012) 600 TU (03-21-2012 Barclays app) ) Ch.7 discharged 5/2009
Current Score: 671 EQ (09-27-2014 DCU) 660 TU (9/26/14 Barclays) Ex (Swagbucks)
Gardening since 9/22/2014
05-24-2012 02:05 PM
05-24-2012 02:11 PM
You should have gotten a secured loan through a CU years ago... My bank was financed at 3.9% for a couple years, but it was only $5k.. Never buy a new motorcycle. The depreciation is far worse than a car, and the fees always seem more excessive, too.
I would never finance through a dealer. They are pretty crooked sometimes. I went looking for a bike 7 years ago, and I could not get out of the dealership. After about 3 hours, I finally said, "look quit trying to sell me other bikes. I wanted this bike, and if I'm not approved for it, I'm walking." So I finally walked. Turns out, at some point in the conversation, they opened me up a $6k line of credit that I found on my credit report. The bike I was looking at was $9k BEFORE fees. So, I bought the same bike, but 2 years older, with 1800 miles, for $5k.
I'm sure you've learned that lesson already, just thought I'd share. If there is no lein against your bike, I'd get it refinanced immediately at a much lower rate.
05-24-2012 04:23 PM
My husband talked to my CU and they said that we can't refinance a CC into a motorcycle loan. So that option is out the door. I really don't want to not pay the bike because as most of you said it will hurt us in the long run. It was really never my idea to purchase this bike (I was completely against it as I was pregnant with twins at the time. Where are you going to put two car seats on a bike was my question) nor is this CC in my name. It is one of the biggest financial mistakes my DH has made. The worst part of all of this is that my husband wrecked his bike, while riding w/out full coverage insurance of course, and so he no longer rides it. It needs a lot of work and even if we got it fixed (which we can't afford anyway) we could not sell it because we do not yet own it. emptypockets you are completely correct on how this CC is set up. The current 9.99% rate is the increase from the original 6.9% interest rate he was told. It has been 6 years that this CC is getting paid and I have nothing to show for it.
The only other option I can think of at this point is to attempt to get a debt consolidation loan to try and just pay this card off.
05-24-2012 04:40 PM
im really sorry to hear what has happened. we all make mistakes and we all learn from them. well most of us do. please just sit down with your husband and come up with a plan that you both agree on to get this loan paid for. how much do you owe till you pay it off? if you stop paying on it now it will haunt you down the road
myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.>> About myFICO