APRs

[kc12286]

So I have a mint.com account and it alerts me to finance charges, etc. I've noticed that my Chase account has a very high APR. I know they're notorious for this and I've had it flucuate a few times since I've had the card.  It's the Chase Amazon card and right now it's at almost 30%, this is my highest APR. Should I ask for a decrease? I've been making payments, above the mimimum but the balance is high right now.  I think my cap1 is pretty high too, but since they just gave me a CLI, I won't ask for a decrease in the APR.

[haulingthescoreup]

There are lots of opinions on this sort of thing, but I would be afraid that if I asked for an APR reduction while my balance was high, they might think that I was in financial trouble and start doing nasty things, like dropping my CL.

How fast can you pay it off? (If you're like me, Amazon served as Santa's sleigh this year. )

[kc12286]

Well it's almost at it's limit, which is 2k, so I can't really pay off 2k very quickly, as I have the Crap1, a TD bank and another Chase card (which I closed) that I'm also paying.  So I'm being split four ways. I had paid down the cap1 substantialy but when they gave me the cli  I bought a few things.

Even if I put 200 a month towards the Chase Amazon, it would still take me at least a year to pay it down. Ugh this is so frustrating.

[Anonymous]

I would suggest paying more on your Crap1 card. Take the extra money from the other cards that you are paying extra on and pay down that 2k as fast as possible before you ask for the decrease.

[score_building]

Sorry to say my guess is its unlikely will approve an APRD request even with a zero balance on their Amazon card (it isn't a store card per se but they qualify for the APR at app and have often been resistant to customer initiated requests for decreases in general and on this product in particular IME...especially when they have it where they want it-- a revolver at 30% that is likely to repay in full (although it may take a few years.))

This pattern of usage is considered a sweet spot for billion dollar profits, it's a primary mechanism by which they became filthy rich; so there is little incentive for them to cave in to requests for APRD.  I agree with HTSU that the mere mention could lead to AA from Chase and since they are unlikely to grant the request anyway, strongly consider not even bothering to ask in this instance, although typically am an advocate of APRD requests.

Still digging myself out from poor past behaviour (carrying balances...mind you- from 'non-negotiable' expenses--at least in my mind at the time, like medical bills, books for school, etc. no luxury items whatsoever... ultimately, it is all the same in the end, if one can't afford to PIF) but have been lucky to find myfico and people here like HTSU and others who taught me how absolutely crucial it is to PIF, or at least pay very large chunks, and, if I can't, simply don't make purchases.   

One way I reduced the cost of debt is through BT by finding 'easier' high limit, low APR products with no/low/capped BT fees to app once had paid down enough debt to qualify, that is (sometimes easier said than done but worth the effort in my case) and this greatly reduced the cost of debt and increased heartily the speed of repayment.  This method requires unflinching resolve to NEVER charge back up what can't PIF while paying down and once a card is zeroed out... the decisive factor is that one has to stick to the plan steadfastly with no room for excuses or things could get increasingly unmanageable.  It is one method to a quicker recovery from toxic debt.

Even though I look decent cosmetically < 20% UTI, still got too much debt for comfort but the debt is at 0-5%.  So with the restraint to permanently banish expensive debt, perhaps try to reposition yourself through low rate BT and see how much quicker can zero everything out... but absolutely, without question, cannot then charge cards back up for this method to be effective.  

In my case, took baby steps and 1st resolved to never pay over 10% if carrying any debt and then 0-5%, next stop will be 100% PIF and can hardly wait to enjoy that level of financial freedom. 

[score_building]

ps.  would definitely ask cap1 for APRD (of course the lower the balance the better) although unfortunately they too are unlikely to grant it, but at least much less likely than Chase to punish you in the form of AA for doing so IMO.

[kc12286]

Cap1 is a no rewards card, so I'm just paying that off and putting it away. That's what I was doing but with Christmas having just passed and them giving me a CLI, I made one more purchase. Haven't used it since than, it's no longer in the wallet. Chase Amazon I don't mind, since I get Amazon rewards from it.

When looking at my Chase card history, my APR wasn't alwayys 30 though and it's not live I've missed payments to warrant an increase, which is why I asked about the APD. APR was originally 16 and dropped down the 14 (I'm guessing this must have been an intro APR.) As I pay it down, any chance they might decrease the APR on their own? It's been at 30 for a long time, but like you I made some credit mistakes. I'm working to correct them. Haven't missed any payments, paid late in a long time.

I asked about a BT on the fico forums a while back but I realized it was just better for me to pay off the cards. I don't have any cards to BT to and I don't want to open a card just to do a BT. But I'll keep that in mind.

[score_building]

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@kc12286 wrote:

Cap1 is a no rewards card, so I'm just paying that off and putting it away. That's what I was doing but with Christmas having just passed and them giving me a CLI, I made one more purchase. Haven't used it since than, it's no longer in the wallet. Chase Amazon I don't mind, since I get Amazon rewards from it.

When looking at my Chase card history, my APR wasn't alwayys 30 though and it's not live I've missed payments to warrant an increase, which is why I asked about the APD. APR was originally 16 and dropped down the 14 (I'm guessing this must have been an intro APR.) As I pay it down, any chance they might decrease the APR on their own? It's been at 30 for a long time, but like you I made some credit mistakes. I'm working to correct them. Haven't missed any payments, paid late in a long time.

I asked about a BT on the fico forums a while back but I realized it was just better for me to pay off the cards. I don't have any cards to BT to and I don't want to open a card just to do a BT. But I'll keep that in mind.

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If you carry balances on a rewards card and pay 30% interest, the rewards never reach your pocket, please be mindful.  Have to PIF to benefit fully from a rewards product.

IME It is essential to move to act and find a way to reduce the cost of debt ASAP if PIF is not an option.

[kc12286]

RIght but by doing a BT, I'd only be transferring from one card to another. And with a low intro rate, usually of 12 months (sometimes a little more) I'd still eventually end up paying a finance charge somewhere along the way.

If I'm careful and allocate $150-200 towards the card, I could pay it down much quicker. There's no reason I couldn't have at least a 1k paid off by June if not earlier.

You're right that, the rewards aren't really being reaped if you're carrying a high balance.  But it's not so high that I haven't enjoyed any of the rewards. If you have any suggestions for a good card to use for BT, I'm all ears. But most cards I've seen offer six months maybe 12.  I'd need something longer than that, to really see as worthwhile to apply.

[score_building]

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@kc12286 wrote:

RIght but by doing a BT, I'd only be transferring from one card to another. And with a low intro rate, usually of 12 months (sometimes a little more) I'd still eventually end up paying a finance charge somewhere along the way.

If I'm careful and allocate $150-200 towards the card, I could pay it down much quicker. There's no reason I couldn't have at least a 1k paid off by June if not earlier.

You're right that, the rewards aren't really being reaped if you're carrying a high balance.  But it's not so high that I haven't enjoyed any of the rewards. If you have any suggestions for a good card to use for BT, I'm all ears. But most cards I've seen offer six months maybe 12.  I'd need something longer than that, to really see as worthwhile to apply.

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Not sure how you could pay down debt at 30% quicker or at less cost than at 0%-5%?  

PSECU no fee BT for eg. currently 3.99 for twelve mos and then 9.9 reg purchase rate, would be a world of difference and significantly decrease the cost of debt from 30%. CU are not mercenary like the major banks, accordingly PSECU has offered the 9.9 reg purchase rate for something like 20+ years w/o ever increasing it; definitely a better lender for revolving, especially where balances exist at a usurious rate, and won't be repaid in short order.