What to do...opt out or accept interest increase??

[Anonymous]

Good morning:

I have 3 citibank credit cards with very high balances.  Excellent history - never late, but maxed out. I just received a letter for all three accounts adjusting my interest rate effective 01/05/10. "To continue to provide our customers with access to credit, we have had to adjust our pricing" - BS!!! It states I can reduce my APR down 1% in 6 months (07/01/10) by making on-time payments and making at least one purchase each month.

- $27k...12.24%....effective 01/05/10 it will increase to 16.99%....with possible decrease to 15.99% on 07/01/10

- $20k...14.99%....effective 01/05/10 it will increase to 18.99%....with possible decrease to 17.99% on 07/01/10

- $7k...14.99%.....effective 01/05/10 it will increase to 18.99%....with possible decrease to 17.99% on 07/01/10 

I'm a single mother to a 18 mth old, who has a job but accepted a reduction in salary (over $1800/mth reduction) to keep my job and benefits.  I have no child support).  I'm seriously considering bankruptcy but I don't think I qualify for Chp 7 (make too much money).

I'm not sure what to do....opt-out or accept the rate increase?

If I opt-out and the accounts then close, how would this affect my credit (currently in the 680,698)?  I guess it would all be irrelevant if I file for bankruptcy...

Any help would be greatly appreciated!!!

Message Edited by LilPenguin1 on 11-24-2009 11:37 AM

Message Edited by LilPenguin1 on 11-24-2009 11:37 AM

[Anonymous]

Hi, LilPenguin1!

The new rates will add $197/month in additional interest to these balances.  Are you prepared (or able) to pay that, just to keep these cards open?

You didn't ask for any input about how this could affect your credit score or ability to get credit, but with that level of CC debt, I'd think that the monthly obligation would be uppermost on your mind.

From a strictly dollars-and-cents standpoint, opt out and close the cards, IMO.