Thinking of Asking Credit Card Company to stop charging interest

[Mambo Junkie]

You may want to talk to your bank about a consolidation loan which would have a reasonable interest rate. About 5 years ago we had a bunch of credit card debit and then with job changes etc we were just paying the minimum amount due and getting now where and could see no end in sight. We talked to the bank and got a loan with less than 5% interest for 2 years and had the debt paid off for good and our monthly payments were even less than what our minimums to the credit card companies were. It did not seem to hurt our credit as we did use the cards once or twice after they were paid off and then cancelled them like our bank recommended. We now only keep one credit card for travel, on line stuff etc and now choose not to carry credit card debt and save for what we need or think twice before spending the money in savings.

This is what I'm thinking of doing. That said, on the personal level, we have no credit card debt. On the professional, I have 2 ccs charged up. I did this to save my business in this economy, and after 2 years or worrying, struggling, and not sleeping, I finally gave up. I have managed to pay off quite a bit of my debt, but I have these 2 credit cards left. One is great, I can see my balance chunking down, the other not so much. I recently called them and got a reduced rate for 6 months, and I have been doubling up and getting the balance down a bit. I hope to try again when that runs out. If all else fails, I hope to go to the bank and consolidate or go through a counseling service. Once my debt is gone, I will feel free again.

 

[ceecee]

Maybe call and ask them WHY they raised your interest rate. None of our cards have ever raised ours. Stop using them...cut them up and pay off the balances. Don't buy things unless you already have the money for it.

 

[Mambo Junkie]

My cards are gone. I only used them for my business and that is gone, too.

 

[carebee21]

Again, I agree. But sometimes "life happens" and you end up getting into a situation that you didn't expect, hence the reason most of us even carry credit cards.

So because you get into a situation and don't have enough savings to cover the cost, it's fair to use the credit card companies money? And then you allow the credit card company to bail you out of a situation and give you some sort of lifeline or give you what you need but you feel that you shouldn't have to pay the interest or fees because you were in a bad situation and they took advantage of you? I fail to see the logic there....

And no, I really don't think most people carry credit cards as a back up or emergency for a situation. That's what savings are for. I personally use my credit card because I get points, I get an extra warranty on large electronic purchases and I have to have a credit card to rent a car and we travel a lot so.... But we always pay off our credit card at the end of the month.

 

[Mambo Junkie]

Oh, and I had the same interest rate with the one card for 11 years. Once I stopped using it and started to pay them off, they kept going up on the rates. BTW, my credit score is in the 800s.

 

[MrsPete]

How is paying off the debt "walking away from it"? I am asking them to stop the interest for a while so we can get the balance paid down. If they want to cancel the cards, so be it. That way we can't use them and add more to the balance. And the terms are not the same as when we first opened the accounts. I think the interest rate on some of these was like 10 or 11% and now it's almost 30% on some of them! The credit card companies are greedy.

I totally agree that the credit card companies are greedy, but you agreed to their terms. Yeah, they raised the rates, but the initial agreement gives them permission to do it. It's like putting your hand into a snake's mouth and being surprised that it bites you.

I think asking them to lower the rates back to your original rate is a good idea; all they can say is no -- and don't be too surprised if no is the answer. I think asking them to remove the interest rates is foolish. It's asking too much, and they're likely to reject you without even considering it.

Keep this in mind: You're asking them to do you a big favor, and they're holding all the cards. Whether you pay or don't pay, they win. If you pay, they get a whole bunch of money. If you don't pay, they write it off as a bad debt. So really, what's their motivation?

Ask, but don't be surprised if they say no. However, you won't be in a worse situation than you are now, so try.

 

[SaraJayne]

How is paying off the debt "walking away from it"? I am asking them to stop the interest for a while so we can get the balance paid down. If they want to cancel the cards, so be it. That way we can't use them and add more to the balance. And the terms are not the same as when we first opened the accounts. I think the interest rate on some of these was like 10 or 11% and now it's almost 30% on some of them! The credit card companies are greedy.

My interest rate on my credit card has never been raised. It's 8%, just like it was the day I opened it 8 years ago.

Don't they only raise your rates if you miss or are late with payments?

 

[JKMJ441724]

So because you get into a situation and don't have enough savings to cover the cost, it's fair to use the credit card companies money? And then you allow the credit card company to bail you out of a situation and give you some sort of lifeline or give you what you need but you feel that you shouldn't have to pay the interest or fees because you were in a bad situation and they took advantage of you? I fail to see the logic there....

I'm saying it's absolutely better, IMHO, to ask for the reduction in interest rather than resort to bankruptcy where the credit card company gets nothing and the consumer gets hit with an incredibly large knock to their credit score. Late payments are bad on a credit score but nothing like bankruptcy.

And no, I really don't think most people carry credit cards as a back up or emergency for a situation. That's what savings are for. I personally use my credit card because I get points, I get an extra warranty on large electronic purchases and I have to have a credit card to rent a car and we travel a lot so.... But we always pay off our credit card at the end of the month.

Well, we'll just have to agree to disagree on that point. I reason I HAVE my credit card is for emergencies. The reason I USE it is for convenience. I have enough savings to cover most of my purchases (even the big ones). I go with the credit card because I don't pay interest and I get rewards for my purchases. I don't have to get into my savings - that money can stay in my bank earning interest while I use the credit card company's money for free. If a merchant wants to pass on the 3 1/2% credit card fee to me, I'll find another merchant. But not every one is in that situation and I'm not going to give anyone of them a hard time for trying to stay on top of the situation by asking for a fee or interest reduction.

PS: CAREBEE21, please don't take this as an argument. I've seen some threads where people get worked up. It's hard to tell tone from text so I want to make sure you know that I see this a two people with different viewpoints DISCUSSING, not arguing. In my head I hear my comments and yours as declarations and not exclamations. I work in a law firm and my boss and I discuss/debate many, many things (because he is an argue-er by trade) - sometimes with emotion but mostly without.

 

[brunette8706]

My interest rate on my credit card has never been raised. It's 8%, just like it was the day I opened it 8 years ago.

Don't they only raise your rates if you miss or are late with payments?

*
They can raise your interest rate at any time. I always ASK AMEX that is, to lower it and sometimes they will, other times they say they can't.

 

[Gigi22]

Just a quick note--I dropped in because of the thread title--on the T.V. show "Till Debt Do Us Part", the strategy is to get credit card companies to drop the interest rates to a lower rate. Alternately, could you obtain a debt consolidation loan?

 

[MrsPete]

I'm saying it's absolutely better, IMHO, to ask for the reduction in interest rather than resort to bankruptcy where the credit card company gets nothing and the consumer gets hit with an incredibly large knock to their credit score. Late payments are bad on a credit score but nothing like bankruptcy.

Actually, for the customer it's a lose-lose:
Either she pays the bill (along with mega-interest) and she has no money
OR she skips out on the bill and takes a big hit on her credit rating.
Either way, she loses.

For the credit card company, it's a win-win:
Either she pays the bill (along with mega-interest) and they have money
OR they get to write off the non-payment as a bad business debt, and they enjoy a lowered tax bill.
Either way, they win.

See why credit card debt is so dangerous?
The ONLY WAY the consumer can win is to charge only what he can pay off that month. Once you're in revolving credit card debt, it's not easy to get out.

Yeah, I know that's not helpful, but -- honestly -- nothing's going to be particularly helpful in this situation. I'm just clarifying where things stand. I don't think people realize just how the credit card companies (and, yes, they are greedy) hold all the cards and really have no reason to care whether people pay or don't pay. Yes, it's easier for them if we all pay, but -- if we don't -- it's really not a big loss to them.

 

[Mambo Junkie]

My interest rate on my credit card has never been raised. It's 8%, just like it was the day I opened it 8 years ago.

Don't they only raise your rates if you miss or are late with payments?

Not necessarily. I have never been late on a payment, never even paid a late fee. They only raised mine after I stopped charging and started paying it off. My niece had a student loan that did the same. They were quite content to charge the interest rate agreed upon until we started doubling up on the payments. They went up twice in 5 months.

 

[Planogirl]

I think that you might have good luck with them lowering the interest but I wouldn't count on them doing away with it.

DH got into trouble with Chase a long time ago due to some silly business decisions. They completely refused to lower the rate until he brought in consumer credit counseling. You might have to go that route. They will categorize it as a charge off probably which will cause your credit reports to take a hit for 7 years.

 

[MrsPete]

Not necessarily. I have never been late on a payment, never even paid a late fee. They only raised mine after I stopped charging and started paying it off. My niece had a student loan that did the same. They were quite content to charge the interest rate agreed upon until we started doubling up on the payments. They went up twice in 5 months.

Yeah, that'd do it. You changed your charging behavior. You were trying to pay off the bill, you were trying to wriggle out of being their cash cow. They don't like that!

Know what the credit card companies call people who pay off their bills every month (and thus pay no interest)? Deadbeats. Sounds like you're on your way to becoming a deadbeat -- good for you!

 

[mrodgers]

Can't remember what it was called, might have been the consumer credit act that was mentioned a few pages back. When that was ready to be enacted, right before that date is when every one of my credit card rates went way up. Mine use to be in the 3-5% range. About 2 months before the consumer credit act was to be put in place, they all jumped to the current 13-15%.

So, no, it isn't just because you extend your credit or you are late on a payment. They raise them because they can. The Consumer Credit Act had something about how they are allowed to raise them and when they aren't allowed, thus they jumped all over it and made sure to raise them before that act came into effect.

 

[RadioMom]

Can you add some money to your mortgage and pay off the credit cards? The interest would be significantly lower, your mortagage payment would still be reasonable and your credit cards would be eliminated.
It's kind of a one time fix, but it can help you, providing the cards aren't twenty or thirty thousand in debt.
A line of credit with your bank would also carry a lower interest rate.

 

[thomas998]

I signed up with an interest rate of just a little over 6%, with balance transfers at 3% until those were paid off. They decided to raise my interest rate to 28% on this debt and they did this to many other people as well. Due to class action suits the company did some backpedaling and went back to our original agreements.
The credit card companies are jerks.

I think there used to be usury laws but not any more as far as I know.

Usury laws still exist, but they vary from state to state and are still usually pretty high... I'm not sure of all states, its possible some don't have them. The problem is that most people don't read the fine print on agreements. I'm a bit weird in reading each and every word before I sign anything, including credit cards (it is the reason I haven't ever agreed to do the online access to my current credit card, the fine print you have to agree puts more limits on how they are protected if my account gets hacked that doesn't exist in the current agreement and I'm not going to accept those terms).

In a perfect world they wouldn't be allowed to charge more than 10%... but if that happened the fact is a lot of people wouldn't be able to get credit cards because they are too high a risk for such a low rate.

And no matter how high the rates are, they are only a problem when you don't pay them off completely each month... I've probably charged over 30,000 a year on my credit card year after year and the total interest I've paid has been zero.... because I only charge what I can pay for... if you make sure that is how you use them then they are great. But the moment you decide to put off paying them for even a month, you lose big time.

 

[cats mom]

Can you add some money to your mortgage and pay off the credit cards? The interest would be significantly lower, your mortagage payment would still be reasonable and your credit cards would be eliminated.
It's kind of a one time fix, but it can help you, providing the cards aren't twenty or thirty thousand in debt.
A line of credit with your bank would also carry a lower interest rate.

Turning unsecured debt into secured debt certainly doesn't seem like a wise choice to me. So I would advise the exact opposite. If you do end up taking out a consolidation loan, I would make sure you do not attach your house to the loan.

 

[DisMN]

Usury laws still exist, but they vary from state to state and are still usually pretty high... I'm not sure of all states, its possible some don't have them. The problem is that most people don't read the fine print on agreements. I'm a bit weird in reading each and every word before I sign anything, including credit cards (it is the reason I haven't ever agreed to do the online access to my current credit card, the fine print you have to agree puts more limits on how they are protected if my account gets hacked that doesn't exist in the current agreement and I'm not going to accept those terms).

In a perfect world they wouldn't be allowed to charge more than 10%... but if that happened the fact is a lot of people wouldn't be able to get credit cards because they are too high a risk for such a low rate.

And no matter how high the rates are, they are only a problem when you don't pay them off completely each month... I've probably charged over 30,000 a year on my credit card year after year and the total interest I've paid has been zero.... because I only charge what I can pay for... if you make sure that is how you use them then they are great. But the moment you decide to put off paying them for even a month, you lose big time.

The thing is is I do read the fine print, or at least what I could decipher. LOL Due to myself and many many others actually reading that fine print and due to the impending class action suit the credit card company I was talking about ended up not raising the rates on those transfer deals, actually refunded a bit of money to a few people who had already been caught up in the interest increase AND.......this company sent out letters of apology, saying that they realized what dire straights the economy was in and how sorry they were for causing so much worry and concern about these accounts that they were going to dramatically raise the interest on.

There's a first time for everything I guess.

One small win for the consumer, eh? LOL

 

[tomthebarncat]

This is wrong.
Yes, a few will eliminate any interest charges but most will just lower them considerably.






Not entirely accurate.
We did not miss any payments nor did we go over our credit limit. Almost all of our creditors raised their interest rates very very high. One went from 7% up to 32%. That's when we decided to get off the merry-go-round and say we could no longer pay back those debts at those interest rates.

Probably should have thought about the interest before you ran up your cards, they are not free money but high interests loans. You could not afford to pay the interest but you could afford to run them up??? Your debt and you need to pay it, unless there are extenuating circumstances that you have not mentioned, no sympathy from me!!