Penalized for paying on time

iVillage Member
Registered: 09-24-2007
Penalized for paying on time
9
Sun, 07-20-2008 - 8:30pm

My husband and I have now been penalized by the second credit card for paying on time. I admit it, we have a lot of credit card debt. He was unemployed for 13 months and the job he finally got was about $10,000 less than his previous job. Our mortgage and daycare bills take his entire months income and my income has to cover everything else, so the debt does increase slightly every few months, but we pay all of our bills on time, including the credit cards minimum and a few dollars more (not much, just about $10 or $15). Two of our credit cards have bumped our interest to over 30%, even though we have never had a late payment. This last one, dropped our credit limit, upped our interest and that caused the account to go over the new credit limit and they charged us an overage fee. They did not tell us they were raising our interest or lowing our limit ahead of time so there is no way we could have avoided the over the limit charge. So, we have basically been penalized for paying our credit cards on time.

It has really upset my husband, we have tried negotiating the interest rates before and they basically tell us too bad. He is so mad he just wants to quit paying them. It has really made us look at our situation for the what it is. We can't afford to pay the credit card payments and have money to live on. We could make it without the $450 a month going to our credit cards. Does anyone have any suggestions on dealing with the credit card companies. My husband is so mad he says he is just going to quit paying them until they are willing to negotiate.

iVillage Member
Registered: 04-26-2007
Sun, 07-20-2008 - 8:48pm

Please see my post about the Debt Management Plan through CCCS and Money Management.org.
They are a good company that will help you over the phone 24/7. You can talk to a counselor anytime. You'll need to give them all of your debts and income info so they can work out a plan. They can give it to you online.
BTW 30% interst is outrageous!

Good luck!

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iVillage Member
Registered: 05-09-2005
Sun, 07-20-2008 - 10:26pm
What a piece of (*&%!!) -- well, I can't say it here, I guess. I think that you should ask them to send you in writing the reason for the rate hike. And, maybe, if you could stand to be persistent with the folks on the other end of the phone until you get to an actual supervisor -- maybe you could get them to look up what happened, and explain it to you.
Maybe the debt to income ratio went up (?. Any space at all on any other card you could transfer some of this credit card to? Don't give up the fight yet. Put any possible extra money toward this card and whenever an offer shows up for a balance transfer, see if it would work for you.
I'd be furious at this point.
Hang in there.
Hugs,
Megan
iVillage Member
Registered: 11-17-2007
Mon, 07-21-2008 - 1:17am

yes ask them to give you a reason, Then

Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Mon, 07-21-2008 - 2:09am

Hi there - I'm so sorry this is happening.

All my best,
Danni

iVillage Member
Registered: 04-26-2007
Mon, 07-21-2008 - 2:35am
Danni, does closing the cards hurt your credit? The CCCS place told me we had to do that, and it concerns me. Suze Orman says it shouldn't hurt because the credit cards will be happy you're working on a plan to pay them.
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iVillage Member
Registered: 12-26-2005
Mon, 07-21-2008 - 8:54am

So sorry to hear that happened to you. It sounds like Discover Card to me. That happened to my husband and I. We had a discover card and they did the same thing. We have never had a late payment, but did move balances to another card which made our debt ratio go up. They did not advise us of the credit limit lowering, which made the balance we had with them already push us over the new limit. I was livid. I called them and advised this was horrible customer service. They would call us for every little purchase from their fraud prevention team, but couldnt pick up the phone to advise us of something this large. I ended up closing the account and moving the balance to another card with a lower rate. They did raise the limit back up to cover the balance until the payment arrived to pay off the account.

What got me the most was at the same time discover lowered our credit limit, 2 other of our CC's raised our limit and lowered our rate.

I feel for your situation and know you are not alone.



Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Mon, 07-21-2008 - 9:48am

Closing cards will cause a temporary dip in your credit score.

All my best,
Danni

iVillage Member
Registered: 04-26-2007
Mon, 07-21-2008 - 2:53pm
Sounds good, thanks. BTW my DH would never stop paying, I think you were thinking of someone else. He is all for doing the DMP. I think MMI is the best, esp. since they were mentioned in a Suze Orman book and on Quicken.
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Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Mon, 07-21-2008 - 3:07pm

I'm glad you've found a company that you're comfortable with.


Good luck.

All my best,
Danni
cl-phocid, Debt Support Group



All my best,
Danni