Help?!

[spark01]

I've been following these boards for a few months and have found them to be a wealth of credit information.  Currently, I'm aggressively trying to pay about 21k in credit card debt that I racked up when I was in college.  I pay a total of 1,000 down on this debt monthly.

Bank of America     Limit: 19,900   Balance: 7,253 @ 8.23%  Pay $700 monthly
Chase                    Limit: 6,500    Balance 4,896 @ 3.99%    Pay 99.00 monthly
WellsFargo             Limit: 11,100  Balance 8,686 @ 7.65%    Pay 150.00 monthly

I recently received a letter from Chase informing me that my promotional rate will end next month and not in 2011 as previously suggested when I transferred the balance in Feb. My rate for Chase will be more than 20%.  I know I need to try and transfer the balance, but I'm not sure if I should attempt to apply for a new credit card or ask for a CLI from Wellsfargo.  I can't transfer the Chase balance to Bank of America because I rejected their rate hike a few months ago.  The account is not closed, but if I use the card my rate will increase to 14%.  TransUnion is 745 and Equifax is 696.  What should be my next step?

Also, my car lease ended this week and I purchased the vehicle so I my credit was pulled once this week.  Before that, it hadn't been pulled in about 3 yrs. 

Thanks for the help!

[DI]

Spark welcome to the Forum,

You have very low rates that can play in your favor.  Your option would be to pay more on the Chase card since the rate will increase..  Also, since its the card with the lowest balance, you should decrease the amount you pay to BOA and WellsFargo until you have Chase paid off. And do not use BOA card at all while paying off Chase.  You don't want the rate to increase to 14% on the BOA while paying off Chase.  You can do it.

If you can, look at your budget and see what you can temporarily cut while you pay the Chase card off.

Message Edited by DI on 08-06-2009 09:04 PM

[Anonymous]

Something else to consider. If the Chase card is going to be active at that rate, call them up and see if they would increase your credit limit, transfer the balances from the other two cards to the Chase card, that way you are paying one card at a lower rate. Otherwise, paying $700 a month to BoA is silly, you always want to pay the lowest card off first, even if it has the higher rate. Another thing to consider, if you belong to a good credit union, try to get a personal loan from them for the amount of the debt. Pay all 3 cards off then pay just back the credit union at a lower rate.

[DI]

---

@Anonymous wrote:
Something else to consider. If the Chase card is going to be active at that rate, call them up and see if they would increase your credit limit, transfer the balances from the other two cards to the Chase card, that way you are paying one card at a lower rate. Otherwise, paying $700 a month to BoA is silly, you always want to pay the lowest card off first, even if it has the higher rate. Another thing to consider, if you belong to a good credit union, try to get a personal loan from them for the amount of the debt. Pay all 3 cards off then pay just back the credit union at a lower rate.

---

Why would the OP want to transfer the balances to the Chase card that is going to be more than 20% as the OP stated?  That is not good advice.

I gave the OP the best option. I hope he or she take heed to it.

[guiness56]

Pay off the lowest balance first, when that is paid off use that money to pay the next lowest one, etc.

[spark01]

I just want to thank everyone for the great feedback.  I'm not sure if I made myself clear, I was considering asking WellsFargo for a CLI so I could transfer some of the balance from my Chase once that APR jumps to over 20% Would that be a good idea or should I just pay 700 a month until I've paid it off?

[creditwherecreditisdue]

Why are they prematurely ending your 3.99% promo rate? What's the deal there? If that was a BT and you had an offer a deal's a deal.

[Karatz]

---

@creditwherecreditisdue wrote:
Why are they prematurely ending your 3.99% promo rate? What's the deal there? If that was a BT and you had an offer a deal's a deal.

---

I agree. I'm not so sure that raising your rate before the agreed upon date would hold up in court. I would check your recent letter from Chase again. I have a 5.9% from Capital One for the life of the loan. When I agreed to it there were stipulations which would allow Capital One to raise the interest rate, their own discretion was not one of the reasons. Also, I recently got an ammendment to my Capital One card which raised the standard rate. Reading it over the second time I realized they weren't talking about the promotional rate. This may or may not apply to the letter that Chase sent you, but I would recheck it. 

Lastely, don't act in haste. Pay minimums on all your cards and hold the extra a few extra days till you decide who's advice best fits you. My advice would be to pay only the minimums and wait till you see for sure the interest rate hike on a statement. I also think, but I'm not totally sure, that you can see the current interest rate on the web site. The second you know you got hit, take the extra cash and pay Chase down while paying minimums on everything else. 20% isn't that much over a month, but over a year turns out to be horrendous. Let me also put it this way. What if I could sucker you into paying me a ton of money that I promised you at a low rate so I could then get new business from you at a much higher rate?

Just giving you my thoughts. Good luck. Fair Issac's guy is saying we are doing much better with our credit and it seems so are you.

[spark01]

Karatz,

Thank you for your very insightful advice.  It seems I misread the Chase change in terms notice.  I wasn't certain raising my promotional rate without cause was legal, but I thought Chase was attempting to squeeze every last dime out of me before the new CC laws go into effect I will have the oportunity to pay off my Bank of America Card and pay down my Wellsfargo before the promotional rate ends.  This just made my weekend!

[creditwherecreditisdue]

Time to take a deep breath and enjoy your favorite adult beverage!