Credit Cards (A Vent)

Discussion in 'Teacher Time Out' started by Chrissteeena, Apr 16, 2010.

  1. Chrissteeena

    Chrissteeena Companion

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    Apr 16, 2010

    I know some people who have tons and tons and tons of credit cards; I also know some who have none.

    I've had my major Citi card since 2005. It started out as a student card with a $500 limit on it and now it's up to 10,800 limit. I worked really hard to keep paying it off…… and then I had a lack of judgement (which I know is my own fault). My last semester in college I managed to put about $2,500- $3,000 on my card. It used to be that I could pay it off with what was left of my student loans, when that big bulk check came to me. Well….. ooops I graduated and forgot that I wouldnt have that big bulk check of $4500! I ended up putting even more on it with a $1100 car repair and medicine when needed. It's been at almost $6,000 for 2 years. I don't make a lot of money and can really only pay maybe $10 at most over the minimum payment, and sometimes I can't even do that. :dizzy:

    Well my tax return came in today and I plan on paying off $1000 of it. Which it will finally be under $5000 (not far under- but still under) Here is what really gets me………

    My APR keeps going up! I didn't even notice it before. It is at 19.740% and when I called citi today they said that it went UP again. It's now at 19.99%!!! I've never missed a payment, always paid pretty soon after the statement came out, and when I had the money… paid extra. :mad: I called to see if I could somehow get it lowered…… the lady didn't really do much for that other than put in a 'manual request that won't come back with an answer until mid- week next week.' UGH. Then she tried getting me to pay off my other cards with citi. Sure because I'm not giving them enough money already. :(

    I know I'm not the best with money and I definitly need help managing it (which my boyfriend helps me with now). But I also know that I personally am NEVER late with a payment on anything: cell phone, internet, cable, my credit cards, my student loans.

    I just need to get this stupid card paid off and then never look at it again. It has my head :dizzy: I am getting my firestone card paid off in full soon because my boyfriend is giving me $550 to do that. At least that's one card down.
     
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  3. mmswm

    mmswm Moderator

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    :hugs: I feel sort of bad that my one Visa is capped so low. The whole situation stinks. One bit of advise...

    Pay ALL your bills on time. Companies that offer credit products monitor their customer's credit history even AFTER they have you as a customer. If you read the fine print, you gave them permission to periodically review your whole credit report, and adjust your interest rate based on that review.

    If they don't like what they see, even if you're paying them on time, they'll up your rates. Even if you pay all your bills on time, but your debt to service ratio changed for the worse, they'll still up your rates. I don't think that's entirely fair, but that's the way it is.

    You're doing the right thing by getting your finances in order and getting your credit card debt paid down. Now, do yourself one better and educate yourself on every aspect of financial management.
     
  4. 1st-yr-teacher

    1st-yr-teacher Comrade

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    Apr 16, 2010

    I know just how you are feeling...I dealt with this same issue when I was in college. Your situation looks like an exact repeat of what I went through.

    There should be somebody that you can speak to. I would research some of the new regulations that were recently put in place.

    I am not 100% positive...but I do think credit card companies are no longer allowed to increase interest rates without giving you an option to opt out.

    I really dislike credit card companies that take advantage of students. While you are responsible for what you have charged...if you are not working full-time, how can they justify giving you such a high limit with such a high interest rate?
     
  5. Ms. I

    Ms. I Maven

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    Apr 16, 2010

    I know the feeling. I have a card or two that I wish were paid off. Fortunately, I've never been late on ANY bill in my entire life.
     
  6. mmswm

    mmswm Moderator

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    Oh, some of the less scrupulous companies set up an almost vicious cycle. One of the things that determines your interest rate is your debt-to-service ratio. Your DSR isn't just a ratio of what you owe to what you make, it's a ratio of what you could potentially owe to what you make. They add up the limits of your credit products. That $10,800.00 limit you have? That makes you more risky than when you only had a $500.00 limit. Add to that the limits of all the other cards you have, and you have just become one very risky customer, hence the hike in interest rates.

    There are; however, things that you can do to negate some of this risk. Call all your card companies. Ask them to "restrict for payoff". A customer requested restriction doesn't affect your credit score like a company imposed restriction. If you don't have as much available credit, and you get some of these other cards paid down a little, you're a much better risk, and would qualify for a lower rate card, which you could then use to pay off most of your older cards.

    Keep at least one of your old cards open and active. The length of your credit history has an impact on your score. The longer it is, the better (assuming your payment history is reasonable).


    Okay, I think thats enough unsolicited advise for one night :D
     
  7. PCdiva

    PCdiva Connoisseur

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    Apr 16, 2010

    My friend was in a similiar situation, she had about a $5000 balance on her discover and was paying 29% interest...she was unaware of this bc she is not good about cc's and wanted me to help her consolidate her bills bc she had a few.

    Anyway, I just kept calling back...I think I had to talk to 7 different reps until I got one to lower the interest rate...he actually lowered it to 5% too- Which is incredibly low!

    I don't really know how Citi is but I did hear on the Suze Orman show that Citi was going to start charging a fee on certain cards if you didnt charge a minimum of $3000/year....I would inquire about that when you call too.

    If you pay all of your bills on time which you say you do, and call a few times and no one will lower your interest rate (sometimes it just depends on the attitudeof the customer service rep) then you should go to www.bankaholic.com and find out which companies are offering a zero percent interest rate on balance transfers...now you will have to pay a transaction fee -usually 3 or 4% (so roughly $200 on a $5000 balance) but at 19.99% interest you are paying $83- a month interest on that same balance, if the zero percent is for 6 months or a year it would be worth it!

    Good luck!
     
  8. PCdiva

    PCdiva Connoisseur

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    ***Also, when you transfer a balance to a new zero percent card DO NOT use the card for any purchases! This could cause you to have to pay interest on the new purchases only but will add up!
     
  9. PCdiva

    PCdiva Connoisseur

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    Apr 16, 2010

    Right now Citi Platinum Select Master card (you probably have the student card not this one right?) has zero percent for 15 months (7 months if your credit is not that good) and the transfer rate is 3%....so $150 fee which is less than you will pay in 2 months of interest

    If that is the same exact citi card you already have then you can do discover which is 12 months with a 4% fee or Capital one which is 12 months with a 3% fee
     
  10. czacza

    czacza Multitudinous

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    Apr 16, 2010

    Been there.:(

    Several options:

    Call the credit card company and ask for lower terms.

    Transfer your balance to a lower interest card.

    Get a debt consolidation loan...it will be a MUCH lower rate than your cc rates...

    Credit card rates are CONFISCATORY...makes you feel like your dealing with criminals instead of bankers.
     
  11. chemteach55

    chemteach55 Connoisseur

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    Apr 16, 2010

    We have about 6 credit cards between my husband and I. We carry balances on two of them (one is left over from Hurricane Rita when our house flooded and we lived without a kitchen for 6 months and the other was our 2 trips to Disney World last year). Total was maybe $10,000 but it is really not a lot compared to what we make. My husband and I each have a card and both are paid off every month. We have a card that we use for business travel and the last card is for our teenagers (for emergencies). They each have a card with their name one it but it is one account. They are pretty good with it but their have been emergencies at Hollister, The Limited, and other store but those have been limited occurrences. We paid off our 2 cards with balances when we realized that the interest rates had been raised and closed both accounts. When we went to buy a truck for our son last month, we realized that our credit score had dropped significantly (almost 50 points) because it apparently does not differentiate from a customer closing an account or a company closing an account due to a poor payment history. My husband was furious.
     
  12. chemteach55

    chemteach55 Connoisseur

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    Apr 16, 2010

    :thumb::thumb::thumb:
     
  13. Chrissteeena

    Chrissteeena Companion

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    Apr 16, 2010


    My card is no longer a student card. It switched after I graduated.
     
  14. PCdiva

    PCdiva Connoisseur

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    Apr 16, 2010

    Is it platinum select mastercard or another type of citi card?
     
  15. mmswm

    mmswm Moderator

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    Apr 16, 2010

    Dispute the report. There most certainly is a way to distinguish between customer request and bank forced closing. It's the company's responsibility to report the information correctly. If they didn't, they need to change it.
     
  16. Chrissteeena

    Chrissteeena Companion

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    Apr 16, 2010

    I am afraid to know what my credit score is; I've never actually checked. I actually think that I know why they keep raising my limit- after talking with my boyfriend it all came to light. After my radiator blew in my car I had put $600 on firestone (my dad had said he was going to make monthly payments to pay off the new radiator-- he was late 2 months in a row) AND the student loans from my community college that my parents are paying (which are in MY name)- he missed 4 months (not in a row- but a total of 4 months).

    I'm pretty sure this ruined my credit score and why the credit card company keeps raising my APR?? My minimum payments went from $125 (december) to now $155 (which is what it is now). I have about $90- $100 in interest put back on by the next statement.

    The credit cards that I have now are Citi (the one I USED to use, I haven't used it in a while!), firestone (which is the only other one with a balance), I also have a Kohl's charge and an American Express with a $500 balance.

    I'm worried that if I open up a new card to do a balance transfer that they wouldn't approve me for a credit limit enough, or it will have yet another high APR after the introductory months.
     
  17. Peachyness

    Peachyness Virtuoso

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    Apr 16, 2010

    I am so glad that my VISA card, from my credit union, works like a debit card. As soon as I use it, the money is taken out of my account. I never have to pay my card! :) I do have an Old Navy credit card, but I got that so I can get the bonus bucks thing. :) I only use it to buy clothes at Old Navy and pay it off right away.

    That stinks that you're having a hard time with them, but at least you are working hard to pay it off and hopefully you'll come up with a good budget plan. :)

    I work part time so I make half pay that I use to. I had to really learn how to budget but it's been working out. It's tough, but I learned to live without things like cable tv, TIVO, etc.
     
  18. mmswm

    mmswm Moderator

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    The outside stuff would definitely contribute to the higher rates. Somebody else suggested a debt consolodation loan. That's a good idea. The rates tend to be lower. Another option is a line of credit. They work similarly to a credit card, in that they're revolving credit products, but spending the money isn't as convienent as having a Visa handy. Use an advance off the line to pay off your current debt, then close down those cards.

    Now, for the most important thing I'm going to tell you. CHECK YOUR CREDIT! I checked mine once a year, but was still victimized sometime between June of last year and Feb. of this year. Now I have a credit monitoring service. Anyway, keep checking your credit so you know exactly what's being reported. As chem discovered, even reporting accurate information (account closing) improperly (who closed the account, you or the company) can have a negative impact on your score. Imagine what larger erros could do.
     
  19. PCdiva

    PCdiva Connoisseur

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    I think it will still help you out...if you have zero percent for 12 months that will save you $830 in interest after you pay the balance transfer fee.....at this point it cant hurt to try!

    Can you get a 2nd job?

    What are the interest rates and balances on the others?

    Also, try deferment on your student loans....depending on where you are working now and how much you are making you may be eligible.

    I hate to hear people getting burried in debt
     
  20. chemteach55

    chemteach55 Connoisseur

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    I know that we should but it is more trouble than it is worth (I know that is what the bank is hoping for) and it really did not hurt getting his truck. We were still able to qualify for the 0% interest for 60 months. I do feel for those that a 50 point drop does make a difference. I know you are working for a bank but it seems like the credit card companies were out to screw everyone they could before all the new laws went into effect. Four out of our 6 cards went up on the interest rates even though 2 have never had a balance nor have we ever actually paid any interest to them.

    Chrissteeena--You really should check your credit report once in a while. I worked for Equifax for a while and there are always mistakes on the reports. We check every 6 months or so and have found several mistakes. It is a pain to correct them but we have done it.
     
  21. mmswm

    mmswm Moderator

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    Chem...Many credit card companies ARE out to screw the customer. That's how they make their money. Of course, I'm now partial to the bank I work for, but I can say beyond a shadow of a doubt that my bank does try to do it right. For instance, in your particular situation, if it was through my employer, there would (or should) have been a specific restriction code placed on the account when you requested that it be closed. That code, and it's meaning is what gets reported to the credit reporting agencies. If any other closing code is put on the account, then it gets reported wrong. There are MANY restriction codes, and some are different by only one letter. Human error is possible in those cases, and the mistake can make a big difference. An honest company tries to avoid such mistakes, and fixes them when they happen. Since a huge part of my job involves fixing mistakes, I can name at least one bank that DOES try to do right by the customer, even if others do not.

    On the other hand, sometimes I just have to shake my head in disbelief at some customers, and frequently wonder how they passed 2nd grade reading. How do you miss FOUR alerts that say "Your line balance is NOT your payoff amount. Please call xxxxxxxxxx to obtain your current or future dated payoff." Then, after ignoring ALL of those warnings, including the one that all but slapped you in the face, how can you, with any integrety, blame the bank????? UGH. Just read. It solves many problems.

    Okay, sorry, little sidetracked there. Vent over.
     
  22. MathTeacher29

    MathTeacher29 Rookie

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    I had a citi card that I was never late on and always paid over the minimum payment. In December they sent me a letter saying they were raising my interest rate to 29.99%. I called them and closed the card so I could keep my current interest rate and pay off the balance. If I had never opened that letter I my minimum payment would have tripled. You have to be careful and open everything Citi sends you and read the small print.
     
  23. mmswm

    mmswm Moderator

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    As a newly minted bank employee, I would revise that to "open everything ANY of your credit card companies, or your bank sends you. You would not believe the number of problems that start with a customer insisting he or she never got a particular letter, yet when I go to the stored images, the letter is there. The whole problem could have been avoided if the customer had just opened the mail.
     
  24. Cerek

    Cerek Aficionado

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    Reading this thread reminds me why I do not have a credit card. While it is good to have one on hand for emergencies, I've managed to go through three very difficult years without needing a cc for any reason. I have a debit card from my credit union that I can use if I need to, but the money comes out right away so I don't have any balance left over.

    Despite some practices by certain banks, I have a hard time blaming them for the problems people have with credit cards. Banks issue credit cards to make money for the bank. They don't want you to pay off the balance, because then they don't have that revenue coming in. That's why they offer such a generously low minimum payment. The longer you take to pay off the card, the more money they make in interest.

    If you have to make a large purchase, you are much better off getting a loan instead of using the credit card. Why? First of all, a loan has a specific payoff date. The debt is designed to be paid in full with X-number of payments. Credit cards don't have any time or payment limit. Second, interest rates for loans are usually lower than credit cards, so you're overall expense is less as well.

    In your case, Christeena, I would definitely recommend the consolidation loan. It will pay off ALL of your credit cards and give you a specific time frame for getting the overall debt paid in full. You will have a specific date by which all your credit debt will be gone.
     
  25. silverspoon65

    silverspoon65 Enthusiast

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    I have one that was maxed out at about $8000. I worked very hard to get it down, with the help of BF who paid all the bills before we bought the house so that I could get it paid down. I got it down to about $5000 in just a few months and it really helped my credit and I was really proud of myself.

    Well right around the time we were buying the house, my old bank made a mistake and reported that I had a charge off to the credit bureau. We almost lost the house and it was a huge mess. But eventually the bank took reponsibility, said it was totally their fault, reported the mistake to the credit bureau, we got the house, etc. etc.

    Well then I get a letter from my credit card company saying that because I had a charge off on my account they were lowering my credit line. They lowered it right to where I had it paid off to, so it looked like it was maxed out again! I called them and explained the whole thing and that it was the bank's fault, they could look it up on the credit report, etc etc, and they refused to switch it back to my old limit! So that destroyed my credit to debt ratio and my score tanked again. Luckily it was high enough to still get the house but I hate that place now! I can't wait to get that thing paid off!
     
  26. Chrissteeena

    Chrissteeena Companion

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    I did the credit report last night- I have three printed now. One from Equifax, one from Experian and one from TransUnion. I did it late last night and still have to read through them- I kind of glanced them over. I have closed 4 credit cards and one of them is inactive (I've never actually used it). The amount of stuff on them is insane!

    I will think about this stuff later on. I have my FTCE today. I don't want to think or worry about anything- I never do well on tests.
     
  27. Special-t

    Special-t Enthusiast

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    If your payment history is good, you should be able to switch to a lower apr card - most now have yearly fees, but the yearly fee will probably still be less than what you are paying now in interest. I did this with several of my cards a few years ago and have been able to pay them down substantially.
     
  28. lilmisses1014

    lilmisses1014 Comrade

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    Same here!! I paid it off in November or December (what a great feeling!!), but never closed the account. I use it occasionally, but pay it off immediately so there's no balance. I want to close the account for a CC with my credit union (with a significantly lower APR), but it's one of my older lines of credit and I don't want to hurt anything. How much does it hurt your score if you close a CC? I have a department store credit card (not used too often and always paid off right away, but the store lowered my line of credit from $1,000 to $100 without ever informing me!) that is over a year older than the Citi card that I will keep open. The next loan my husband and I will apply for is for a new home, but that won't be for at least 3 years.
     
  29. mmswm

    mmswm Moderator

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    How much an individual action affects your credit score depends on how much stuff is there to begin with. If you don't have a lot of other stuff, or there are a few late payments here and there dragging you down, then I wouldn't close down the older card. Use it from time to time and pay it off completely every time you do use it.

    Another thing worth noting. While your FICO score is important, it's not the only thing that's important when it comes to big ticket purchases. When you're looking to buy a home, take out an equity line, or buy a car, a decent underwriter will look at the WHOLE picture, not just the score itself. I've seen people with FICO's above 730 get declined for a home equity product and people with scores in the 660-670 range get approved. The reason is in the WHY's. The person with the 730 pays their bills on time, but could have a high debt to service ratio and the underwriters may think it's not such a good risk, or they could have a history of job bouncing, or other things along those line. The person with the lower score might usually pay their bills on time, but there's a period where things got tough for them. The underwriter can see that, and overlook it as long as the recent history is good.

    In short, being a good credit risk means creating a good balance. You need to have some creidt products to show that you can handle it, and having a long history with a single company improves the picture. On the other hand, if you have a large DSR, then you suddenly don't look so good any more. It's all about balance :)
     
  30. lilmisses1014

    lilmisses1014 Comrade

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    Thanks, mmswm. :) That helps a lot. There is so much about credit I don't quite understand, but I figure that if I make my payments on time, avoid credit card debt, and keep track of my credit reports I'll be in okay shape.

    To the OP-- thanks for letting me hijack your thread.
     
  31. mmswm

    mmswm Moderator

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    Lilmisses, I've always considered myself an reasonably educated consumer. As a matter of fact, I even taught a consumer finance class for the community ed department at the community college where I worked. It wasn't until I got a job with a bank, that I truly learned what consumer finance is all about. Its amazing what you learn about loans when its all you do every day (my job, btw, is in operations, I am not a banker, but I do support them...and fix things when they go wrong).
     
  32. YoungTeacherGuy

    YoungTeacherGuy Phenom

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    Apr 18, 2010

    I have a Discover Card & Macy's Card. I am trying to pay them both off...hopefully by the end of the year!

    **I have paid off my Macy's bill several times, but I just can't seem to stay out of that store!!!
     

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