topic Re: Credit Card Rate Hike Solutions? in Credit Cards

Credit Card Rate Hike Solutions?

Anonymous — Sat, 05 Mar 2011 02:20:48 GMT

So my credit card with AT&T just jumped from 10.99% APR to 30.01% APR! It has a $20,250 limit and it currently has a $19,200 balance... The minimum payment went from ~$350 up to ~$650. Ya, $300 in interest alone. I'm lost and don't know how to go about this. I really can't afford this new payment, let alone want to pay them that much in interest. What are my options? Do I offer to have them close my account if they lower the interest rate to settle the debt? I've NEVER been late on ANY of my debt and don't want to start those nasty habits! If they close the account but I still owe a balance, how is that going to effect my credit report/scores? Wouldn't that essentially be considered a charge off? I've called them three times and I keep getting no where. They just state there's nothing they can do for me. I always ask to speak with a manager but they apologize and say they can't do anything for me... They refered me to credit councelling but I've always made my payments but fear that I can't afford this huge interest rate. I know I shouldn't have maxed out the card but I've learned from that mistake and haven't used the card in a year but have only been able to afford the minimum payment... I certainly don't want a charge off on my report! What do I do?

Re: Credit Card Rate Hike Solutions?

MarineVietVet — Sat, 05 Mar 2011 02:57:50 GMT

@Anonymous wrote:
So my credit card with AT&T just jumped from 10.99% APR to 30.01% APR! It has a $20,250 limit and it currently has a $19,200 balance... The minimum payment went from ~$350 up to ~$650. Ya, $300 in interest alone. I'm lost and don't know how to go about this. I really can't afford this new payment, let alone want to pay them that much in interest. What are my options? Do I offer to have them close my account if they lower the interest rate to settle the debt? I've NEVER been late on ANY of my debt and don't want to start those nasty habits! If they close the account but I still owe a balance, how is that going to effect my credit report/scores? Wouldn't that essentially be considered a charge off? I've called them three times and I keep getting no where. They just state there's nothing they can do for me. I always ask to speak with a manager but they apologize and say they can't do anything for me... They refered me to credit councelling but I've always made my payments but fear that I can't afford this huge interest rate. I know I shouldn't have maxed out the card but I've learned from that mistake and haven't used the card in a year but have only been able to afford the minimum payment... I certainly don't want a charge off on my report! What do I do?

I'm sorry this has happened to you. I assume this was a variable rate account? And did they give you 45 days notice that this change was going to happen? One of the provisions of the Credit Card Act 2009 says:

Significant changes to the terms of your credit card must be given 45 days prior to the change taking affect. Under current rules, credit card companies only needed to give 15 days notice prior to making certain term changes.

Also:

You can “opt-out” if you don’t like the terms your credit card companies send you. Your card may be closed, but you will have multiple options for paying off your balance, including having up to 5 years to pay the card off – under the terms you had before opting out.

Re: Credit Card Rate Hike Solutions?

stefanc — Sat, 05 Mar 2011 04:25:35 GMT

Is the At&T card a "business" card? If so, I don't think the Card Act applies.

I've been keeping a close watch on my biz cards for this very reason!

Re: Credit Card Rate Hike Solutions?

MarineVietVet — Sat, 05 Mar 2011 04:37:55 GMT

@stefanc wrote:
Is the At&T card a "business" card? If so, I don't think the Card Act applies.

I've been keeping a close watch on my biz cards for this very reason!

Very good point.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Re: Credit Card Rate Hike Solutions?

AndySoCal — Sat, 05 Mar 2011 04:44:52 GMT

Usually when the change the terms of the account they give an effiective for those terms? Are you beyond the effective date?

Re: Credit Card Rate Hike Solutions?

Anonymous — Sat, 05 Mar 2011 06:03:32 GMT

Not a business card. I was given the choice to opt out last year but chose the option to keep the then current rate of 10.9% for 12 months and they suspended the card so that I couldn't charge to it during that time. There was no agreement for after the 12 months was up, which is now... The first payment under these terms is due on the 8th. When I checked my account last month (after the 12 month period under the locked in 10.9% rate) I saw the rate hike so I immediately called to see what options were available and was given just an apology. Is it at all possible to close this account under a payment arrangement without it adversely effecting my credit reports/scores?

Re: Credit Card Rate Hike Solutions?

andre181 — Sat, 05 Mar 2011 11:46:05 GMT

If they allow you to close the account and keep your current APR, the worst thing that will happen to your reports is you will have a $20,000 balance on an account that shows a 0 credit limit. That's not a good thing at all, but its not as bad as a charge off. You score will definitely go down though.

Do you maybe have another card that you could balance transfer to? You may want to look into that, or applying for another card that would give you a good balance transfer offer. Or maybe even a personal loan from a bank or credit union. Even if you could transfer half of that balance to another account it would really help, and you could keep the AT&T account open.

Re: Credit Card Rate Hike Solutions?

JayRizzo — Sat, 05 Mar 2011 11:58:59 GMT

Although it sounds like a good solution, but I'm concerned about that balance transfer option because if I'm reading this right... not much was paid on it so far but I'm reading how it was never late (maybe just the minimum was paid).

Also, if 12 months went by and I only see around 1k difference between the CL and the current balance... what's been happening during that freeze time? I was under the impression that rate hikes only applied to NEW purchases after the notice.

I'm lost again.

Re: Credit Card Rate Hike Solutions?

MarineVietVet — Sat, 05 Mar 2011 16:25:07 GMT

@Anonymous wrote:
Not a business card. I was given the choice to opt out last year but chose the option to keep the then current rate of 10.9% for 12 months and they suspended the card so that I couldn't charge to it during that time. There was no agreement for after the 12 months was up, which is now... The first payment under these terms is due on the 8th. When I checked my account last month (after the 12 month period under the locked in 10.9% rate) I saw the rate hike so I immediately called to see what options were available and was given just an apology. Is it at all possible to close this account under a payment arrangement without it adversely effecting my credit reports/scores?

I don't know if you get only one chance to opt out or not.

Re: Credit Card Rate Hike Solutions?

Anonymous — Sat, 05 Mar 2011 16:53:15 GMT

@Anonymous wrote:
So my credit card with AT&T just jumped from 10.99% APR to 30.01% APR! It has a $20,250 limit and it currently has a $19,200 balance... The minimum payment went from ~$350 up to ~$650. Ya, $300 in interest alone. I'm lost and don't know how to go about this. I really can't afford this new payment, let alone want to pay them that much in interest. What are my options? Do I offer to have them close my account if they lower the interest rate to settle the debt? I've NEVER been late on ANY of my debt and don't want to start those nasty habits! If they close the account but I still owe a balance, how is that going to effect my credit report/scores? Wouldn't that essentially be considered a charge off? I've called them three times and I keep getting no where. They just state there's nothing they can do for me. I always ask to speak with a manager but they apologize and say they can't do anything for me... They refered me to credit councelling but I've always made my payments but fear that I can't afford this huge interest rate. I know I shouldn't have maxed out the card but I've learned from that mistake and haven't used the card in a year but have only been able to afford the minimum payment... I certainly don't want a charge off on my report! What do I do?

Have you followed through on this? You definitely want to look at all your options - this one included.

Re: Credit Card Rate Hike Solutions?

DI — Sat, 05 Mar 2011 17:12:14 GMT

30.01% @ $19,200 is within reason to file BK no doubt. If they're not willing to work with you, I'd save that $650 monthly payments for a good BK attorney.

Re: Credit Card Rate Hike Solutions?

DI — Sat, 05 Mar 2011 17:15:35 GMT

But if you're young and in good health maybe a second job could be an option.