Need advise on 30% CC interest rate hike
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Need advise on 30% CC interest rate hike
| Fri, 03-17-2006 - 10:33pm |
Hi - I didn't realize things were so bad until I went to pay our Chase Visa bill for this month, we stopped using the card about 6 months ago and before then we had a terrible load of bad luck with car repairs, drs. appointments, etc. so it was pretty close to being maxed out at over 16,000. I really hate this CC company, they started us with an 11% Amico Visa which was what had originally been our Amico Gas card a few years back, then they sold us and the rate went up to 17%, then I had the stupid idea to buy a van using one of those 2.9% checks, thinking I would have the money to pay it off when my car sold (we needed the van for more space and for a part-time job that never worked out) then it took my car more than 6 months to sell and so we lost $3000 on that deal, but then they sold us again (negating the 2.9%) and now we're up to 24% which we had been paying for the last 5 months. Only ONCE were we late (3 months ago) and that is becuase dh made the check for 300.56 not 356.00 - truely an honest mistake, but I go and open our bill this month and now we are at 30% interest! I am truely floored!!! We call to ask why and they state it is a company decision and everyone's interest rates were increased to that much. Unbelievable! But now the min. payment is almost $500 a month which we can't afford. From what I understand Consumer Credit Counseling won't even begin to help us until we have been late on our payments, correct??? We had "perfect" credit until this happened, tried to apply for a personal loan and of course the band says no, and I don't know where to get a line of credit to transfer this over to that won't just do this to us again even if they do approve us in the first place. And no we don't have equity in our house yet. I am really getting desperate in that I don't understand what to do, and I don't even understand what we did wrong to have been treated this way. I really need a company to help us deal with this CC company. Should we just let this payment be late so we can apply for CCC??? It's not that we have ever done anything extravagent - I buy only garage sale cloths and then only in moderation, I keep us on a very tight food budget, I just can't cut anything else and we're all working extra already! We were paying it down very slowly when it was at 24% but at 30% it's impossible! I am so at a loss here, please give me some ideas on what to do. I would go with a private company if I could find one that would help, if I could truely know they weren't going to rip me off also. I feel so lost right now and I don't know where to turn. Thanks in advance. Barbara

I am sorry for your troubles. We have a Chase card and bank at Chase(have for years) and we are happy with them.
That being said...30% sucks!! If you have good credit(and you still should if you were only late that one time) what about getting a different card and transferring the balance or as much of the balance as possible? I recently got a Citibank card with a great intro rate on it.
I can't imagine keeping my head above water with that much interest on a credit card. That has to be hundreds of dollars a month. You could try and negotiate down with them. Call them and tell them you don't accept the rate change. If your old rate was a fixed rate they have to notify you in writing of a rate change and you have the option to accept it or deny it. We have done that numerous times on another card that was given to us at 6.9 fixed rate for anything and it continues to stay that way.
That is about all I have. I haven't had this problem but I know other people on the board have so they can probably give you better advice.
Good Luck! Let us know what you work out.
Hi Barbara -
lvhunnie2005
You do not have to be late with your payments to go to CCCS. I would at least explore the possibility; go in there, with all your balances, and see what they can work out. Be prepared for them to pressure you to make a decision right then and there. You don't have to say yes and they will keep your record on file for six months; so you can go back. You will have to close those accounts; CCCS is a definite ding on your credit report because there is a high percentage of those folks that eventually file bankruptcy.
Whatever you do, don't go the debt settlement route; where these "companies" "negotiate" a balance; "pennies" to the dollar. For example, if your balance is $5000; they "negotiate" a balance of $2,500. This is a terrible way to go; because actually credit card companies usually aren't in agreement (although the debt company will tell you they are) and often times the debt company will hold your monthly payments to the creditor until they have accumulated the entire $2,500. Meanwhile all these lates charges pile up because the credit card company is expecting a monthly payment.
Then to make matters worse, you will eventually get a 1099 in the mail (could be a couple of years later) at tax time; these 1099's are reported by the credit card company that wrote off the $2,500; and then you are stuck paying taxes on it.
Honestly, go to CCCS; see what they say. It may help. If not, it's part of the first step, based on the new law, of filing bankruptcy; so you've got a back-up should things get truly bad.
The Fed raised interest rates yesterday, with the word that in all likelihood they will continue to rise. This WILL affect all of us that have credit cards, regardless of whether or not the accounts are in good standing. Couple this with the increased minimum credit card payments, rising gas prices, you will continue to see the dismantling of the middle class in the US.