Help with high APR's

[renov8r]

Is there a thread that summarizes strategies for lowering interest rates?  We have good income, but a lot of debt, some of which are credit cards that jacked the rates as soon as we missed a payment by a couple of days.   Our FICOs have suffered as the utilization increased and late payments mounted.  (Two 30 day lates for me, Three for my wife). Our scores are around 600.

[GregB]

What payment would show late "as soon as we missed a payment by a couple of days"? In order for a CC to show a 30 day late you would need to be 30 days late. House payments normally due on first and late on 15th so the following first would have to come along without the previous months payment being received. Online payments are a good way to make sure payments get credited on time.

If you have multiple 30 day lates and they are very recent, the score hit will be nasty. This will get you RateJacked by CC and limits decreased. Any CLD will lower your FICO and leave you open to more CLD, etc. A nasty downward spiral.

You have to break that cycle. Stop spending money on something else and get current and stay current. Lower deductions to IRS, stop IRA/401K deduction, sell something, etc. You need to spend less than you earn going forward to permanently fix the problem

This is the danger of having a lot of debt, particularly in this credit environment. It only takes one slip to start a problem that is tough to fix. The lenders are going to see you as a problem and won't loan you money or lower your rates.

[Anonymous]

If i read OP correctly, the rates were jacked after a cpl days late. Not necessarily reported late. Though there are some 30 day lates.

[Anonymous]

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GregB wrote: Any CLD will lower your FICO and leave you open to more CLD

Is this only if utilization ratio increases as a result or do issuers lower CLs only because another issuer may have?

[GregB]

In my experience one CLD results in a lower FICO due to higher utilization - same amount owed, but lower limit.

The lower FICO then leaves you more likely for a CLD on another account.

I had an experience where Amex did a CLD on one account. This dropped my FICO. I then got another CLD, ALSO FROM AMEX on a different type of account. Result: lower FICO. Then another CLD on the first Amex account. Then another CLD on the second. A nasty circle of CLD, FICO drop, CLD. Amex was stating the reason for the CLD as utilization. I have since decided that Amex wasn't always accurate in their quoted reasons but it seemed to work that way. I started with FICO in high 700s and ended up at 696, still at 709 due to high utilization. They actually did CLDs four times on each account but by the third cycle I had other things changing so am less sure of the cause/result relationship. Account #1 from 82K to 42k to 28K to 12K, #2 from 29K to 14K to 7K to $3K.

I'm currently running the $3100 CL Optima to $2500+ each month and then PIFing it to see if Amex does a CLI. I don't want to actually ask for one until I get FICO up from 709.

Message Edited by GregB on 07-14-2009 04:19 PM

[creditwherecreditisdue]

Chase and AMEX are two outfits that seen totally oblivious to collateral damage. And you have to be aware of it before you can even begin to care. Very sad but true.

As for high APR's and RJ'ed accounts:

1) You must get your utilization down any way you can. That means either pay down the trade lines you have now or add new trade lines. This has to be done. Your card issuers are always looking!

2) Call those who have RJ'ed you and find out what you can do to get returned to your original terms or get an APRD and then do it. Sometimes the answer is it cannot be done. Communication here is key. You cannot get what you don't ask for!