Absolute panic!! Please, I need serious advice and quick!

[Math_Rocks]

Received Providian statement today and the purchase rate is being raised to 27.99%. We are almost 7 years out from BK (Ch. 7) with no lates or problems since BK. However, due to a recent job change, move and delay in selling our previous home, our credit cards got pretty much maxed out a couple months ago. We have been making a little more than minimum payments but have managed to get all cards under 90% utilization. The min payment for Providian has been a staggering $275 but with the hike in interest rate, I know this will go even higher. We feel absolutely trapped. We cannot call and threaten to transfer the balance because we have nowhere to transfer it to. (Unless someone thinks we can get a new card with limit $9000!)

My husband's scores are a little lower than mine: 655 on Equifax from MyFico and 619 on TransUnion according to Providian.

I would appreciate any sound advice that might be offered.

[Anonymous]

Sometimes there is a clause saying that if you write a letter stating that you do not accept the changes in terms then they cannot change them. Something to look in to.

[Anonymous]

If possible, it might worth looking into getting a personal loan from a credit union, HELOC, or HEL and consolidate some of those high rate cards...best of luck!

[Anonymous]

Chase ratejacked me for no reason- I eventually got a supervisor, who agreed that yes, I could get the interest rate reduced to the former rate, if I closed the card.  This isn't just for Chase, it can work on other cards as well. 

Closing a card with a balance is generally not a good thing, but the difference between 9.99% and 24.99% outweighs that, to me.  Oddly, even though it's closed, both the balance and the limit are apparently factored into my util %- it's not being treated as a maxed-out card, but as a card at 55% of its limit... 

YMMV.

-MsMS

P.S.  If you decide to do this, make absolutely sure they note the card as closed at customer's request...

Message Edited by MsMS on 01-25-2008 05:50 AM

[Creditaddict]

I agree with previous posts, you can usually refuse there rate change but to get that you will have to close account.

[Math_Rocks]

Will that hurt my Fico score? Also, the previous rate wasn't great either. Part of the 8600 balance is at 16.99% and the rest is at 19.99%. This just makes me so angry; it is as if they are trying to raise the rate to the point that you won't be able to make the payments so they can get late fees, even higher interest, destroy your creidt, etc.

[Creditaddict]

I AGREE... The banks are saying the market is aweful and more and more people are revolving balances, defaulting and paying late so in order to PREPARE for this to happen in the future, we are going to rate jack you now to try to get a little more money before you go default... but what they are really doing is pushing many more people over the border of making payments and missing payments because the min. keep going up.

Same thing with mortgages, I understand people should have understood how the rates would increase on there adjustable, but the banks are saying hey help us out Gov. becuase we have billions of forclosures now... All they had to do was refinance all those people into a fixed rate and everyone probably could of held on to there house.  Banks say they don't want the houses but most banks arn't helping people keep them.

[Anonymous]

At those rates, I would suggest getting a personal loan or HELOC- preferably from a friendly local bank or credit union.

The highest rate my bank would charge on a personal loan was 14.9%- better credit would be substantially better rates.  A HELOC, of course, would probably have tax-deductible interest- effectively lowering your interest rate even more.

Another option, depending on your scores, could be to app. for a new card or 2 that offer low or 0% BTs...

The HELOC would be my first choice, though.

[Math_Rocks]

I started looking at credit unions last night. I am just not sure. When we filed BK (Ch.7) almost 7 years ago, we unfortunately had some credit union loans and cards included. It would be a different credit union now but I have no idea how they would view our credit history. My Equifax (according to MyFico) is 660 and my husaband's is 655. His TransUnion (according to Providian, the instigator of this big mess) is 619. I have not paid for other scores since getting the mortgage on our new house in August. Which brings me to the other suggestions being made: we got a 100%mortgage loan, fixed rate but, of course, have had no time to build equity so I think that means no HELOC.

We have been working hard to get on top of our debt and start chipping away at it. And I know how important our FICOs are in that process. I had planned on waiting until the Summer to apply for any new cards and then only to transfer balances. I am scared to do so now and be rejected. If we apply for credit, with what lenders or credit unions would we have the best shot?

[Anonymous]

Are there any hometown or local (not huge nationwide) banks in your area?  At least in my experience, they're much easier to work with.  Don't just go in and start app'ing, sit down with somebody and explain your situation- ask what they can do.  They may come up with a solution we wouldn't know about.  I went in looking for a personal loan, and walked out with a HELOC refinanced to 2% lower interest and a line increase.  Saved me over $100/month in interest!

If you're in Virginia, I'd say talk to the lovely people at First Market Bank.