Question about CC

iVillage Member
Registered: 04-02-2003
Question about CC
5
Thu, 05-29-2003 - 11:06am
I have heard many of you talking about calling your cc and asking for lower rates. I know that they do this quite a bit. I have a credit card through my bank. The interest is quite low for purchases. The total balance is about $9,000. $6,000 of the balance is from purchases and the interest is 8.74% (I am happy with that), but the other $3,000 is from cash advances and the interest is 19.99%. My purchase balance is going down (slowly), but my cash advance balance raises each month! It is very frustrating.

Does anyone have an experience with cc like this and getting the cash advance rate lowered?

Also, I am in the process of divorce and will be responsible for the payment to this cc which is a joint account. Can I cancel the card before the balance is paid off, so that niether of us can use it?

TIA

Kathie

iVillage Member
Registered: 04-19-2003
Thu, 05-29-2003 - 11:30am
I don't know about decreasing the interest rate, but you should be able to cancel the card before it is paid off. We did that with 2 cards in the past to prevent us from using them. The terms for payment each month stayed the same.

Good luck

Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Thu, 05-29-2003 - 12:14pm
Hi Kathie - thanks so much for posting. Unfortunately, this dual interest rate is exactly how credit card companies make their money. I doubt they will lower the advance rate. What they do is apply 100% of your payment to the LOWER interest rate balance, therefore compounding the interest on the higher rate balance each and every month until the lower rate balance is paid off. They count on consumers not understanding this practice. IMO it's predatory.

If it's at all possible for you to get a loan to pay this card off, or get a different credit card that will pay off the entire balance at a decent rate, I suggest you do this.

Sorry to hear you're going through a divorce. Divorce and debt seem to often go hand in hand. We're all here for you!

Danni

All my best,
Danni

iVillage Member
Registered: 05-08-2003
Thu, 05-29-2003 - 1:04pm
We closed all our cc accounts before they were paid off, a line of credit too. We didn't suffer any repercussons but they were old accounts with old terms. I think you need to read the cardholder's agreement and make sure you won't be penalized by fees or interest rate hikes. I've seen people worry about it affecting their credit reports somehow too, don't know how it would but it's a concern to some. (I personally cannot imagine ever taking out a loan again and don't care about my credit report anyway, but that's just me).
Avatar for mymartes
iVillage Member
Registered: 03-26-2003
Thu, 05-29-2003 - 3:58pm
hi,

yes you can cancel the card and continue paying it off. Have you looked into getting another cc w/lower interest, no annual fee nor transaction fee?

good luck

mym

iVillage Member
Registered: 04-02-2003
Thu, 05-29-2003 - 4:55pm
I would love to get another card with a low interest rate to transfer the balance. Unfortunately, I don't think it is going to be possible to get a card with a credit limit high enough, since I would be applying for it by myself and when my credit is run, I own two vehicles (one is soon to be ex's) and lots of other bills I am not currently responsible for paying. Debt has been split in half, but most of the accounts are joint accounts.

Divorce is never easy, but it is really going pretty well.

Financially, I just hate not know exactly how much my bills are going to be and when they are due. I am moving into an apartment in a couple of weeks. I know how much rent is going to be and have a pretty good idea of utilities, but it is driving me crazy not knowing due dates and being able to plan out what is going to get paid when.

Debt reduction has had to stop for the time being, but as soon as I am on my feet and have everything I need, I will be battling this credit card, a SBA loan, and student loan.

Thanks so much for the responses and support!

Kathie