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Pay off question

New Member

Pay off question

Hi all, need help, Orchard Bank (HSBC) raised my APR from 14.9% to 24.9% with no late payments or over the limits in over a year.(Had the card since 2005).  Of course I had the option of closing the account and keeping the 14.9% but that would decrease my available credit which is $2100 total.


I called customer service and it was a "business decision" to raise the rates and I had to take it or leave it.  I then filed a complaint with the Better Business Bureau and got a call from the Office of the President and that guy said the same thing. 


The limit is $750 and I am currently at $683.17.  I have 3 other small limit cards ($500, $450 and $400) that have interest rates of (15, 10 and 10%) Those are about 80 % of their limits. Would it be best to pay of the HSBC first in 2 or 3 months ( I just got a PT job to get rid of them) or equally spread out the newfound PT job wealth equally over 6 months on all cards?  (My goal is to be CC debt free by Sept 1. 2009).  Any advice would help.  I just want to get rid of those crooks at HSBC!



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Valued Contributor

Re: Pay off question

many people in your shoes are seeing rate increases to 20%+



it is a business decision of the credit card companies. people are not paying them money that the owe and it has to be made up somewhere- from the people that do pay them.



Credit card loans are unsecured, there is no car or house that they get if you decide not to pay for the vacation/meal out you charged. credit card companies either have people paying, and paying an interest rate to them that generates income for the company to pay their day to day expenses, and generate new reserves that they can then lend out again. or they do not.


1. I would pay the Orchard card off but you only have an interest rate when you have a balance. I would quit carrying a balance for the time being but keep the card


2. I would then pay all your cards off


3. When they are all paid off I would try to migrate to better accounts.


4. When you migrate to better accounts close the accounts you find lacking.

Spreading the wealth:

there are 2 popular approaches:

1- You pay the highest interest rate loan off first as that loan "costs" you more money month to month.

2- You pay the lowest balance  loan first, then work your way up  as you can see the results with a PAID OFF CARD and the emotional gratification it brings sooner.


Spreading the income equally makes it harder for people to see the value of the increased payments.

Message Edited by usmc58555 on 03-04-2009 09:14 AM
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Credit is not a right, but a business transaction, one that takes into account risk, and charges accordingly based on that risk.
Your credit score is an aspect of your credit profile. Important? yes but just an aspect. Contributing/supplemental information determines the finer point of the deal. Ask any question, respect me not to get mad if the answer is not the affirmation you are looking for,
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