topic Re: chase encouaging me to lower my balance,------ why? in Credit Cards

chase encouaging me to lower my balance,------ why?

Anonymous — Sun, 28 Feb 2010 14:33:04 GMT

chase has ofered me $200 if i pay $600 month for next sixmonths wothout using card in this time period.

why?

they would be giving up 20% interest

do they benefit if my fico score goes up?//

[it would if i go forward with thid deal]

or why else??

must besome motivation on their part!

Re: chase encouaging me to lower my balance,------ why?

DI — Sun, 28 Feb 2010 15:00:06 GMT

@Anonymous wrote:
chase has ofered me $200 if i pay $600 month for next sixmonths wothout using card in this time period.

why?
they would be giving up 20% interest

or

do they benefit if my fico score goes up?//
[it would if i go forward with thid deal]

or why else??

must besome motivation on their part!

They may have taken a look at your credit reports and determined you're a high risk. Rather than take a chance not getting their money at all when things may become much tighter for you, they figure they can try to collect the full balance and close your account.

Re: chase encouaging me to lower my balance,------ why?

Jazzzy — Sun, 28 Feb 2010 15:00:21 GMT

Hi ficorun...welcome to the forums.

This is tough to answer without more details about the card and what's on the rest of your reports. Is this card close to being maxed out? Have your FICO scores dropped recently? Are you maxed out on other cards?

I can't say for sure, but their motivation may be that they don't want you to default on this card. They are offering to let you pay it off but do not want you to run up more debt with them. They would give up interest if they are worried that they might eventually lose the principle.

What's your debt situation?

Re: chase encouaging me to lower my balance,------ why?

Anonymous — Sun, 28 Feb 2010 15:28:57 GMT

fico = 717 no lates

total credit cards at about 75% of max, $15000 of $20000 available

this card $9400 of $9900 available

[total line for this card was dropped last year fromm 15000 to current 9900]

I am concerned that once my balance goes down they will lower my credit line again

and then my fico will not improve,so why should i strain to paydown this one and not another?

Re: chase encouaging me to lower my balance,------ why?

DI — Sun, 28 Feb 2010 15:34:16 GMT

@Anonymous wrote:
fico = 717 no lates

total credit cards at about 75% of max, $15000 of $20000 available

this card $9400 of $9900 available

[total line for this card was dropped last year fromm 15000 to current 9900]

I am concerned that once my balance goes down they will lower my credit line again

and then my fico will not improve,so why should i strain to paydown this one and not another?

Chase is chasing your credit line down so you won't charge more to the card. They may eventually close the account.

Re: chase encouaging me to lower my balance,------ why?

Jazzzy — Sun, 28 Feb 2010 16:48:22 GMT

@Anonymous wrote:
fico = 717 no lates

total credit cards at about 75% of max, $15000 of $20000 available This is very high utilization.

this card $9400 of $9900 available This may not be maxed, but it is close to 95% utilization.

[total line for this card was dropped last year fromm 15000 to current 9900] This has happened to many customers who have never missed a payment.

I am concerned that once my balance goes down they will lower my credit line again Very likely

and then my fico will not improve,so why should i strain to paydown this one and not another? Apparently you don't have to pay this one down. It's your choice. If, however, you can save a lot of $ by doing so, why not? The handwriting already appears to be on the wall.

I'm sorry this is happening to you, but if you read here in the forums, you will see that you are not alone. We are in a very tough credit climate. Anyone with high utilization is going to be looked at twice...and then looked at again. They may very well balance chase you down. They are giving you an opportunity to save some $$ so that they don't eventually lose $$ on you. They deem you to be a risk because of your cc debt load. Me? If I had the opportunity to pay it down with lower interest, I would take them up on that. It will be better for you in the long run. Our credit climate will loosen up again, it's just a matter of when.

Re: chase encouaging me to lower my balance,------ why?

credithappy — Sun, 28 Feb 2010 17:27:01 GMT

I am reading this and I am a bit confused. They are asking you to pay more or they can reduced your interest rate. I would like to know did you get any of this in writing from Chase. I know the CARD act is force into these banks so they have to give you something in writing regarding interest and payments.

Re: chase encouaging me to lower my balance,------ why?

st3v3n — Sun, 28 Feb 2010 17:42:48 GMT

No, Chase doesn't benefit from your FICO. They just want you to lower you balance.... But, if I was you I would continue on paying the amount you would usually pay. Don't get temped by the $200 offer, they just trying to butter you up.

Re: chase encouaging me to lower my balance,------ why?

Anonymous — Sun, 28 Feb 2010 17:54:20 GMT

Are they offering a 1 time credit of $200?

Is the interest rate staying at 20%

If so, you are paying over $150 a month in interest.

If you can afford, I would do it, it will pay about 1/3 of your balance. It gets you on a better financial footing, which I believe is there motivation as well.

If you don't agree, they can close the card, and let you continue to pay it off.

Re: chase encouaging me to lower my balance,------ why?

Anonymous — Sun, 28 Feb 2010 18:09:44 GMT

Citi has done a similar type of thing, offering a partial credit if targeted customers paid down balances more aggressively. Citi's offer also included a CLD.

Both banks have no doubt run a risk algorithm, which generated the list of customers to get their pay-down offers. It's a simple case of not wanting to be the last bank extending credit (or the bank with the most credit extended) if a customer gets too far into debt and defaults on most or all of the CC accounts. In Chase's case, it's about a 5% sweetener to get OP to pay more than the usual for the next six months.

If getting the balance reduced by $200 is worth it, go for it. If it's too much of a hardship (or not possible) to pay $600 a month, then ignore the offer. Everyone's situation is different ...

Re: chase encouaging me to lower my balance,------ why?

Jazzzy — Sun, 28 Feb 2010 18:39:40 GMT

@Anonymous wrote:
chase has ofered me $200 if i pay $600 month for next sixmonths wothout using card in this time period.

why?
they would be giving up 20% interest

or

do they benefit if my fico score goes up?//
[it would if i go forward with thid deal]

or why else??

must besome motivation on their part!

I took it from the above statement from the OP that this offer would be interest free. Perhaps I was wrong. Maybe OP just means that Chase would be giving up long-term interest because of the fast pay off.

Either way, OP will likely be balance-chased down. I would pay off those cards in the order of highest interest rate first. If this is an interest-free offer, I would take it. If it's one of OP's highest interest rates, I would take the offer.

FICO is important, but I also think it's important to not let your FICO score cost you money.

Re: chase encouaging me to lower my balance,------ why?

Anonymous — Sun, 28 Feb 2010 19:28:14 GMT

Your FICO score is amazingly high considering potential +800's, with a CR so strong it could also be a warning, nothing lese. They are trying to reduce their risk.

The fact that they are asking you to stop using the card concerns me. I've been there more than once with other banks including Chase. First I'd do what financially benefits you the most = Pay off highest interest rate cards first. In my opinion they have already took an interest on this account. I'd guess if you take the $200 cr or not it probably won't change the outcome. I'd expect a possible CLD as debt goes lower. I'd focus on paying all your debt down, sice it's your over all debt that probably caught their attention. (Specifically numbers of accounts with debt even more so) I'd hold a small balance on this card ($50) when close to PIF to hopefully prevent them from closing it when you finally get around to PIF and then make sure all other cards report a ZERO BAL FIRST on your CR. Then PIF the Chase card after your cr updates with as many zero balances as possible. So this way when they make the decision whether to close or keep open your card they can see as much zero debt accounts as possible. In many cases this helped me keep my credit lines and cards open.

This is not abnormal for Chase to proactively contact customers about debt and doesn't mean they will take action either. The moment you see them chasing down debt with CLDs, then take things very seriously. Once you reduce debt and numbers of debt they will probably loose interest with good clean credit.

Re: chase encouaging me to lower my balance,------ why?

Anonymous — Mon, 01 Mar 2010 19:02:34 GMT

@Anonymous wrote:
[total line for this card was dropped last year fromm 15000 to current 9900]
I am concerned that once my balance goes down they will lower my credit line again
and then my fico will not improve,so why should i strain to paydown this one and not another?

Didn't see this one.

Cld may happen again ' while ' your overall debt is high.

They may recude cl as you reduce debt.

This is not to help you, it's to reduce Chase's risk.

Do what benefits you most. If your debt is paid on Chase and you have high debt with other cards they have more motivation to close the card. Decisions are generally based on a current picture.

I posted earlier:

Once you reduce debt and numbers of debt they will probably loose interest with good clean credit.

Message Edited by ilovepizza on 03-01-2010 02:02 PM