Reply
New Visitor
Chopped
Posts: 1
Registered: ‎09-05-2012
0

High credit card interst rate

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

New Contributor
mrcrush20
Posts: 113
Registered: ‎05-06-2012
0

Re: High credit card interst rate

wow i am sorry to hear about what happned to you.. but i am confused as to what law (laws) would do this... allow a crediter to raise your rate ? did they rase the rate bc you became a higher risk consumer ? score droping to 500s ? or just rase it bc they can ? 

 

 

confused


 






Moderator
Revelate
Posts: 8,891
Registered: ‎12-30-2011
0

Re: High credit card interst rate

Welcome to the forums, though I'm not sure this is the right board or even forum for this question.  If you're not able to make more than the minimum I'd try talking to a financial advisor.  Personally I think you'd be compounding the issue by letting the card go late and eventually charge off, and lengthening your recovery from the short sale.

 

If you have assets you can take a loan out against (car, etc) that weren't enough to keep you in the house, consider doing that.  If you can pickup a second income in your family, that's worthwhile too, even if it's simply part-time, an extra $100 or whatever a week can make a big difference.  Since you're out of your mortgage, can you find a cheaper place to live?  Personally I'd also start looking at what expenses I could strip out, even an extra $5 per day eating out for lunch adds up if you can put that towards the credit card balance.  I'd even see about taking a loan from a family member, even a few thousand would put you way ahead on the amortization curve even if you could only make the mimimum.  You probably have options.

 

If you're down to the difference between putting food on the table or not and nothing you can leverage, then that's one thing, but if you're not at that point, I don't think you're at the maybe second to last resort of just letting it default.  May be able to get help from one of the debt management programs as well which I think is a lesser of two evils on a credit report compared to a charge off.

 

Anyway I hope you can find a resolution to the issue somehow.

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 679, EQ 8 708, TU 711, EX 702* (07/14/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


Take the myFICO Fitness Challenge
Established Contributor
compassion101
Posts: 576
Registered: ‎06-06-2012
0

Re: High credit card interst rate

Good advice from Revelate. Attempt all tries at a new family budget before considering things that will hurt your score long term. A c/o, BK, late payments, debt management program, all will affect you long term.

 

Also it seems typical that you cannot get a reduction in interest rate, most CCCs won't consider it unless you are already in delinquincy. They know that people will find a way most of the time, and if they don't only then might they reduce the interest rate.

 

 

Senior Contributor
Wolf3
Posts: 3,198
Registered: ‎01-24-2010
0

Re: High credit card interst rate

[ Edited ]

I am guessing the shortsale of your home looks like a chargeoff on the credit report.    Adding a 2nd chargeoff will not make the score any worse.  If you can't find a way to pay this off in a few years.   Then I suggest you settle it out.   Learn how to do it yourself.   There is a lot more in our forums on this site for this.  In 20 years, you will have paid in $200K or more.   It is unreasonable to continue that burden.

Valued Contributor
bribro
Posts: 1,367
Registered: ‎04-20-2012
0

Re: High credit card interst rate

Good advice from Relevate. Ideally you'd roll that debt over into something lower-interest (whether it be a HELOC [not an option for you I'm guessing], car loan, family loan, etc.) but this only works if you have the wherewithal to make those payments. What you don't want to do is roll that debt into a collateralized loan and then lose the collateral too.

 

Do you have any other credit cards you can BT into?

TU FICO: 800 (2/1/14) | CK Score: 802 (2/1/14) | CS Score: 805 (2/1/14)

J.P. Morgan Palladium ($250k) | AmEx Platinum (NPSL) | AmEx SPG Personal/Business ($50k/$50k) | Citi Executive AAdvantage WEMC ($50k) | Citi Dividend WEMC ($50k) | Chase Sapphire Preferred VS ($50k) | Chase Ink Bold WEMC ($50k Flex) | Chase Ink Plus WEMC ($25k) | Chase Freedom VS ($25k) | Chase Freedom WMC ($25k) | Chase MileagePlus Explorer ($25k) | Chase Southwest RR Plus Business/Personal ($15k/$15k) | Barclays US Airways ($25k) | Barclays Hawaiian Airlines ($25k) | BofA Alaska Airlines ($10k) | Lexus Financial Services ($30k) | Mercedes-Benz Financial Services ($50k)
Established Contributor
cashnocredit
Posts: 1,012
Registered: ‎07-18-2009
0

Re: High credit card interst rate


Wolf3 wrote:

I am guessing the shortsale of your home looks like a chargeoff on the credit report.    Adding a 2nd chargeoff will not make the score any worse.  If you can't find a way to pay this off in a few years.   Then I suggest you settle it out.   Learn how to do it yourself.   There is a lot more in our forums on this site for this.  In 20 years, you will have paid in $200K or more.   It is unreasonable to continue that burden.


It's true that a short sale is extremely damaging. There is a discussion over on fico.com about whether FICO scores accurately reflect risk since short sales are negotiated and not the same as a foreclosure. Sadly, the stats suggest it is accurate. One in two people that have a short sale go on to default within the next two years supporting the idea that short sales indicate very high risk.

http://bankinganalyticsblog.fico.com/2012/08/are-short-sales-really-that-bad.html

 

I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

WM Discover $1800, WF Plat 12k, Chase Freedom Siggy15k, Amex Plat (60k H/B), Citi AA EWMC 25k
Moderator
Revelate
Posts: 8,891
Registered: ‎12-30-2011
0

Re: High credit card interst rate

[ Edited ]

Wolf3 wrote:

I am guessing the shortsale of your home looks like a chargeoff on the credit report.    Adding a 2nd chargeoff will not make the score any worse.  If you can't find a way to pay this off in a few years.   Then I suggest you settle it out.   Learn how to do it yourself.   There is a lot more in our forums on this site for this.  In 20 years, you will have paid in $200K or more.   It is unreasonable to continue that burden.


I think it's more like 20K :smileyhappy:  Still a lot admittedly.

 

Anyway, while it might not be a problem for FICO purposes, I think it's a world of difference come underwriting.  A lot of people for whatever reason got into mortgages they couldn't afford.  It happens, to a non-trivial number of people, and that explantion will be accepted at face value to any loan officer in the next 10 years..  That's on the assumption it's the one and only blemish on the report; however, walking away from a 10K debt (and it'll probably rack up penalties and fees to around 13k+) and is going to be a much more difficult discussion.

 

There's a lot more towards any approval than just FICO score, and at some point the OP is likely going to need another car, or a shot at another house, and I just don't think that having an additional CO will make it anywhere near as rosy as it would be without the CO.

 

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 679, EQ 8 708, TU 711, EX 702* (07/14/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


Take the myFICO Fitness Challenge
Valued Contributor
trumpet-205
Posts: 2,299
Registered: ‎11-11-2010
0

Re: High credit card interst rate

If you want us to help you, list all of your debts right now (CC debt, car loan, etc).

In My Wallet:
Citi Forward (12/2010) | Citi Dividend (05/2011) | Chase Freedom (11/2011) | GECRB/PayPal (05/2012)
Discover it (07/2012) | AMEX BCP (09/2012) | TD/Target REDCard (10/2012) | Chase Ink Classic (11/2012)
BofA BBR (04/2013) | FNBO/Overstock.com (02/2014) | Barclaycard Arrival (04/2014) | FIA/Fidelity AMEX (04/2014)
Valued Contributor
rootpooty
Posts: 1,739
Registered: ‎10-28-2011
0

Re: High credit card interst rate

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

NFCU plat 5k | NAVCHECK 5k | NFCU cashrewards 3k | BOFA 123 3k |
Chase Freedom 1.5k | Amazon 1800 | Walmart 1450 | Buckle 300

On the prowl for Chase Sapphire Preferred!
scores 7/14 647 622 630 (85%util)
scores 8/14 767 760 758 Boom! finally in the 700 club

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
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+