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Registered: ‎11-11-2010
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Re: High credit card interst rate

[ Edited ]

rootpooty wrote:

what new credit card law did obama put into place?  this is news to me


CARD Act of 2009. Although OP is incorrect that CARD Act directly raises his/her APR. What CARD Act did do is changed how our payment is applied to the balance (any amount after minimum payment goes to balance with the highest APR, less profit for lenders). Which is why lenders increased APR on high risk borrowers to make up the profit loss.

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Re: High credit card interst rate


Chopped wrote:

I have had a credit card for ten years now and the balance is about ten thousand. It was at 14% and now it's at 26% because of the new credit card laws Obama put in place. Because of that my credit card raise my interst rate. About six months ago they closed my account due to high balance.I have not been late in the ten years. Recently we had to shortsale our home, but I have kept current with everything else. My credit is now in the 500s due to the shortsale. 

     I have called and talked to the credit card company at least 30 times to go back to the 14% interest rate or take one of the interst payments away. They have told me over and over I have the best rate of 26% that they can't offer me anything and can't help me because I'm current with the account. it will take me 20 years, because we are only making the min.

     I don't want to stop paying, but with my credit being low. It might not matter any more. I would love some input or experiences you have had. I don't if I should stop paying and save my money to settle the debt later? Advise if this is a nightmare? Input  on good or bad things to do. Any other ideas on working with credit card people. Or stay current for 20 years. Thank you


 

I'm not clear on why they raised your interest if you've never paid late. My guess is that they softed you and reacted to your short sale and low FICO.

 

However, here's the math: $10,000 at 26% = $2600/year interest alone = $216.67/month interest ONLY. If you pay this loan off in 10 years, you will have paid over $18,000 in interest alone ($28,150 interest and payments, over 10 years).  You can use this mortgage calculator to play with different amounts:

http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx

 

Even though it's a mortage calculator, it will work for any loan.

 

Which bank is your cc with? You might want to post on the rebuilder's section with info about which bank it is. Maybe someone would have some advice in dealing with them. It seems that if you get to the right person/dept. and let them know that they need to work with you (e.g. lower your interest and set up a payment plan that is workable for you) or else your only alternative is going to be BK. That may or may not be a bluff -- that's your call. You need to deal with someone higher up, though. Just the regular CSRs aren't going to be able or willing to do this in all likelihood.

 

 

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Edits, funky spacing and spelling due to my iPad not getting along with the forum editor!

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Registered: ‎10-28-2011
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Re: High credit card interst rate


trumpet-205 wrote:

rootpooty wrote:

what new credit card law did obama put into place?  this is news to me


CARD Act of 2009. Although OP is incorrect that CARD Act directly raises his/her APR. What CARD Act did do is changed how our payment is applied to the balance (any amount after minimum payment goes to balance with the highest APR, less profit for lenders). Which is why lenders increased APR on high risk borrowers to make up the profit loss.


thanks for the info

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