Is the "never close an account" thing ALWAYS true?

[bigtim]

It's a scam by Citi - notice the credit analyzer is a citi product and the accounts it wants you to close are citi accounts with high balances/available credit ratios....

The analyzer is acting in the interest of it's maker, not your credit score... LOL

[Anonymous]

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You said you're paying 2-3k a month in payments, but how much is that payment over your minimum required payment?

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I try to make it at least $1k over.  My total minimums were $1299 this month.  I paid about $2300 on everything.

This will probably change though.  I think all the companies are significantly increasing minimum payments.  I know chase is increasing to 5% of balance.  So, I'll be able to make my minimum payments, but there won't be much after that.  Although there will still probably be some.

I'm in a tight spot to be sure, and that 29.99% rate would kill me for sure.  If opting out and closing that account causes a chain reaction with all my other CC companies, I don't know what I'm going to do!!!

Is bankrupcy even an option when you make $75k, are single, and don't own a home??

Oh and Re: my utilization.  They just keep lowering my limits as I pay off!!  So even though I pay, my utilization has pretty much stayed the same!

[smallfry]

All this rate jacking makes me glad I opened two CU accounts. Not that I would revolve a balance with Penfed or NFCU but there is no way I would put myself in the position of revolving with the Big Three. Get some CU accounts and get out of the grip of Citi Chase and BofA.

[Anonymous]

An the biggest problem with the new double minimum payment rules is that I can't focus my money on higher APR cards.  **bleep** it,, the CC companies OWN ME.  What the hell am I ever going to do..........

[JoeBJay20]

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@Anonymous wrote:

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You said you're paying 2-3k a month in payments, but how much is that payment over your minimum required payment?

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I try to make it at least $1k over.  My total minimums were $1299 this month.  I paid about $2300 on everything.

This will probably change though.  I think all the companies are significantly increasing minimum payments.  I know chase is increasing to 5% of balance.  So, I'll be able to make my minimum payments, but there won't be much after that.  Although there will still probably be some.

I'm in a tight spot to be sure, and that 29.99% rate would kill me for sure.  If opting out and closing that account causes a chain reaction with all my other CC companies, I don't know what I'm going to do!!!

Is bankrupcy even an option when you make $75k, are single, and don't own a home??

Oh and Re: my utilization.  They just keep lowering my limits as I pay off!!  So even though I pay, my utilization has pretty much stayed the same!

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Ahh yes, balance chasing, which isn't that uncommon when you have high utilization on one card or across the board, as numerous threads can attest.  They will cite "high balance to credit limit" as the reason, even though the constant CLDs are causing it.  Since you're going to be balance chased, you should probably pay down your CCs in order of lowest balance to highest balance.  You'll be helped by having more cards reporting a $0 balance.  As far as BK goes, your income in and of itself won't determine your eligibility, it's a matter of your assets vs. your liabilities.  It will take some time, but I do think you can get from under this and avoid BK, which is something you want to do as a last resort, because of the drastic effect it will have on your creditworthiness.  You should also look into your budget to see what expenses you can reduce or eliminate completely, at least in the interim.  I know it seems overwhelming now, but you could realistically pay down all of your CC debt within two years.  

[Anonymous]

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@JoeBJay20 wrote:

Ahh yes, balance chasing, which isn't that uncommon when you have high utilization on one card or across the board, as numerous threads can attest.  They will cite "high balance to credit limit" as the reason, even though the constant CLDs are causing it.  Since you're going to be balance chased, you should probably pay down your CCs in order of lowest balance to highest balance.  You'll be helped by having more cards reporting a $0 balance.  As far as BK goes, your income in and of itself won't determine your eligibility, it's a matter of your assets vs. your liabilities.  It will take some time, but I do think you can get from under this and avoid BK, which is something you want to do as a last resort, because of the drastic effect it will have on your creditworthiness.  You should also look into your budget to see what expenses you can reduce or eliminate completely, at least in the interim.  I know it seems overwhelming now, but you could realistically pay down all of your CC debt within two years.  

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Yeah, I agree.  If I just try and push it to the $3k a month, it would be a bit over 2 years or so.  But that's assuming the CC companies' games don't get so confusing and aggresive that I just can't keep up with them.

I definitely don't need a good FICO score for a year or so.  So I think I'll opt-out on that Citi rate jack and hope for the best. (What I fear most is a domino effect from my other CC accounts!  If they all rate jacked me like that, I'd be screwed.) 

I'd like to buy a car in a year, so I'd like my scores to improve by then.  I don't have AC in the car I have now, and I just moved to a warmer climate, so I really want this to be the only summer I have to deal with that.

[creditwherecreditisdue]

Directed to the OP:

My original response was to the question in your first post, would closing the accounts hurt your score and it will. However, there is a lot more going on here that needs to be addressed.

What is the rest of your credit picture? Do you have lates? Baddies like serious lates, charge offs or collection accounts? Is it the Citi account that is being RJ'ed? From what rate and to what rate? What about the Chase account - any AA there? Are Chase and Citi balance chasing? Anybody else? You are really between a rock and a hard place. If you can come up with some answers I will be glad to take a stab at an answer for you.

As far as a BK for you is concerned here is the major issue: Student loan debt (of which you have a considerable amount it would appear) is not dischargable in BK. So you would enter BK, be put on a five year payment plan, pay like mad, have a BK report on your CBR's for seven or ten years and still have to pay off those student loans. I think you would be better off finding a way to pay your way out of this without a BK.

Have you called any of your CCC's and told them you just can't do it and need some relief? Try to heap guilt on them and let them know that their increased APR's are making it utterly impossible to pay down these accounts. They do have internal relief plans which can be quite helpful. Better to get something worked out with them now before you accumulate lates, charge offs and collection accounts. Based on what you are saying you are better off negotiating a payoff at the lowest APR's possible whatever the status of your accounts. Your score will be devastated for a while, but would bounce back quickly when the balances are paid down. You do need to keep something open though, and the older the account the better.

Like I said before present some more info. Also make a few calls. We can help you better then.

[pattycake]

bogfrog - concentrate on paying down as much debt as you can to bring up your scores.  It may take a couple of years to do that at your current salary, but the results will be worth it.  

Best of luck to you - even when you pay off Citi - keep the account open, and use it for a tank of gas or something and PIF before you can be assessed any interest.   

[Anonymous]

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@creditwherecreditisdue wrote:

Directed to the OP:

What is the rest of your credit picture? Do you have lates? Baddies like serious lates, charge offs or collection accounts?

 

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Over ten years of open CC's and not a single late.  I am extremely good on this.

Also, absolutely no collections, charge-offs, or the like.  Just a lot of debt.

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@creditwherecreditisdue wrote:

Directed to the OP:

Is it the Citi account that is being RJ'ed? From what rate and to what rate?

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Yes, it is one of the Citi cards.  Current APR: 18.99%.  Rate jacked to: 29.99%. 

However, half of the balance on that card is a life-of-the loan balance transfer at 3.99%.  (Which I've maintained for a long time so far without being kicked off because of a late payment!!  Again, I always pay on time.)  

So my effective rate on my Citi card is currently 11.58%.  After rate jack the effective combined APR would be 17.15%.

I'm an engineer by trade, so I'm pretty good with numbers.  I'm confident these calculations are correct.

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@creditwherecreditisdue wrote:

Directed to the OP:

You are really between a rock and a hard place. If you can come up with some answers I will be glad to take a stab at an answer for you.

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I really appreciate it.  Also, I should mention that over all CC accounts, my effective APR is 11.63%.  With the rate jack it would become 12.88%.  So it's still manageable.  I don't think bankruptcy would be a good idea.  I was sort of blurting that out of frustration.

Here is a screenshot of a spreadsheet detailing all my rates:

The 2nd CITI card on this spreadsheet is the one going from 18.99% to 29.99%.

So with this info, what do you think?  Should I suffer the rate jack or close the account to opt-out?

Again, thanks so much for the thoughtful replies!!

[Anonymous]

Oh forgot to answer about balance chasing.  Citi and Chase are both balance chasing me on my big 3 credit lines.

Both my Citi cards and Chase were "rate jacked" earlier this year.  The reason I put that in quotes is because they went from ~10% to 16%-20%, not by an obscene amount.  The one Citi card I've been ranting about is the only card that has rate jacked me to the 30% range.  That's just wrong.

My student loan debt is the least of my worries.  It's all very low fixed rate, all government backed stuff.  No sketchy student loans there.  I don't mind these taking forever.  I'm just paying the minimums (one still doesn't even kick in until September), and I'm fine with that.

Also, I haven't called the CCC's yet, because so far I've been able to manage things.  I can still manage things as long as they don't go too far.  This recent rate jack has got me very worried about what the future may hold.  I'm also worried that they might find a way to shake me out of my permanent super-low-rate balanace transfer offers.  I literally check all my accounts 3 times a week to make sure I'm a step ahead!!!

Message Edited by bogfrog on 07-19-2009 05:45 PM

Message Edited by bogfrog on 07-19-2009 05:45 PM