Chase gettin' in under the wire!!!

[BerniePA]

Just got a fold up notice today that my credit card from Chase, which was taken over from Washington Mutual, was going to 24.24 as of next months statement on CURRENT and future balances. Fortunately, I have no current balance on this card and would have canceled it, except the experts say not to cancel it or it will affect your credit rating.

Now slipped on it end of this notice is a notice that the card can be closed by them for inactivity. I made a point to call them and tell them what I thought of them after them being bailed out by my tax dollars and then they try and gouge me for all they can get before their practices are declared illegal.

I guess that since it is not good to cancel your card, we should all make sure to charge $10 or $15 on any card you have each month and pay it off so you don't pay any interest and they can't cancel you for inactivity and that way we can all become a general pain in the butt for them!!!

Banks and Insurance co's -- I hate 'em all!!!!

[crokett]

I would not worry about the credit rating unless you have some borrowing to do in the next year or two.

If Chase raises my rate I am going to cancel the card. I don't carry a balance either but don't plan on rewarding them for doing that.

[cgallery]

I would not worry about the credit rating unless you have some borrowing to do in the next year or two.

If Chase raises my rate I am going to cancel the card. I don't carry a balance either but don't plan on rewarding them for doing that.

I'm with you. I have a very high credit rating but I'm not afraid to burn some of it if any of the CC companies try to screw me.

Now that the new law passed but doesn't take effect til Feb., I think we're all in for a wild ride of correspondence from our existing CC firms.

[L. D. Jeffries]

Yeah and to add to the thievery if you don't carry a balance but pay it off each month they classify you as "a dead beat" since they don't make any money off of you. I'm about one "letter" away from going strictly CASH! They can take their cards and shove them where the sun don''t shine.

[JSUPreston]

Bernie, I have a Providian, now it's a WaMu, now it's a Chase card (sounds like your story) that as soon as Chase bought it out, they jacked up the rate to something like 28%.

I didn't fight it because it wasn't worth it...you see, we're snowballing our debts right now, and ironically enough, that card was next on the list to pay off. I paid it off today.

Chase and Bank of America are two companies that should go under due to how they do business and treat their customers. If they want to cancel my card, so be it.

Next on the list, the BORG card.

Like you said, you should leave the lines of credit open, and if they close them out, hopefully they will be spaced out enough that your score doesn't take too much of a ding.

The thing I miss about Providian/WaMu was that I could see my credit score every month for free. Chase wants to charge me for that service now.

[dbhost]

I didn't fight it because it wasn't worth it...you see, we're snowballing our debts right now, and ironically enough, that card was next on the list to pay off. I paid it off today.

So have you been reading Dave Ramsey's books or did you catch that concept somewhere else?

LOML and I are snowballing our debts. It seems to be working. We have 3 ccs paid off, working on 1 more, a car loan, and then the mortgage... I want OUT OF DEBT....

[Shep]

Yeah, we're doing the Dave Ramsey thing too. Car almost paid off then to the student loans.

[sparkeyjames]

Gave up credit cards a few years back.
Will not have someone arbitrarily raising
intrest rates on me because they feel like it.
One card I had went to 27% paid it off and
canceled. Scr*w the banks.

[ragswl4]

I guess that since it is not good to cancel your card, we should all make sure to charge $10 or $15 on any card you have each month and pay it off so you don't pay any interest and they can't cancel you for inactivity and that way we can all become a general pain in the butt for them!!!

Banks and Insurance co's -- I hate 'em all!!!!

Does anyone here have an explanation for this policy of dinging your credit rating because you cancel or close a credit card account? Seems to be reverse logic to me but then I am a rather draconian kind of guy. I told this to my good buddy and he said I was nuts.

[Woodwerker]

Does anyone here have an explanation for this policy of dinging your credit rating because you cancel or close a credit card account? Seems to be reverse logic to me but then I am a rather draconian kind of guy. I told this to my good buddy and he said I was nuts.

All ratings are based on FICO scores. There is a complex formula used to determine the score. One of the flags in the system is when users close accounts as it is seen as a warning sign that there may be trouble for the consumer. The system is really a catch 22 in as now as banks are clamping down and lowering credit limits this is causing consumers debt to credit ratio to soar which leads to a lesser score making it harder to get credit and allowing creditors to raise rates. This legislation will not help, as banks are mostly lent out to their limits and consumers are up to their ears in debt...

[BerniePA]

Does anyone here have an explanation for this policy of dinging your credit rating because you cancel or close a credit card account? Seems to be reverse logic to me but then I am a rather draconian kind of guy. I told this to my good buddy and he said I was nuts.

All I know is I have seen it mentioned a few times on the Today show when they have their financial "experts" on to recommend what you should and should not be doing and closing a credit account is a no-no according to them, and not using it is also not good, so therefore, charge a little each month, and pay it off. Seems to me that it would make book keeping expenses for the bank, rather than if you just had it open and did not have activity, but what do I know??

All I know is the whole thing pi -- I mean, upsets me greatly and has for years!!!

[cgallery]

I had thought the problem w/ closing accounts is that it lowers your available credit. The scores are [partly] based upon a ration of available to total credit. So someone with total credit of 25k, and has 23k of available credit is going to outscore someone with total credit of 10k and 8k of available credit.

So although they both have 2k on revolving accounts, the guy that can borrow more has a higher score.

[stormdog74]

I had thought the problem w/ closing accounts is that it lowers your available credit. The scores are [partly] based upon a ration of available to total credit. So someone with total credit of 25k, and has 23k of available credit is going to outscore someone with total credit of 10k and 8k of available credit.

So although they both have 2k on revolving accounts, the guy that can borrow more has a higher score.

This is exactly how it works. If you have excellent credit and a lot of available credit, then closing a card should not hurt you much, if at all.

One other consideration is the oldest card you have. Part of the formula is based on how long you have had credit, so if you close a card you got a long time ago, it could hurt your score as you would be perceived not to have had credit as long. I got a Discover Card when I was in college (back then it was the only card a college kid could get!) and though I rarely use it I still hang onto it just for that reason.

[JSUPreston]

So have you been reading Dave Ramsey's books or did you catch that concept somewhere else?

LOML and I are snowballing our debts. It seems to be working. We have 3 ccs paid off, working on 1 more, a car loan, and then the mortgage... I want OUT OF DEBT....

I got all I needed to know off his website for free. I wasn't about to pay $100 for his class or $30 for the books when everything truly necessary was out in plain sight. So, in a way I followed his advice and didn't spend the money to learn what I needed to know.

We've been snowballing for 5 months now. We got in over our heads when SWMBO was sick for several years. She was in the hospital on average 3 -4 times a year for about 4 years. Even with insurance, we were running out of money before end of month. Sometimes we had to charge the basics to keep us going.

She hasn't been in the hospital for a couple/three years now, so that's hopefully over, but between what had happened and a few bad decisions that we made, we were in deep. Not nearly as bad as some, but I was losing a lot of sleep.

Once SWMBO finished school, she and I had a heart to heart about all of this, and she immediately cut back on the frivolous purchases. We took her graduation gift money and made that the emergency fund. In the past 5 months (not couting student loans), we have eliminated 1/3 of all the debt, and including the gas card, we've paid off 10 CC's! 3 to go, then a loan we shouldn't have taken out and then we finish paying off both cars. We should be debt free (besides student loans) by July of next year.

We still use the gas card, and it gets paid off every month. We also have a small limit card I use for online purchases, which gets paid off as soon as the transaction posts. Other than that, we don't charge anything anymore. Funny thing is, aside from not eating out as much, we're actually living better than we were.

Once we finish, we may save up the money for a couple/three of months and take the boys on a Disney Cruise. Then, we start putting aside the extra money we've been putting towards the debt and the current minivan payment, and in 18 - 20 months, we will pay cash for a brand new minivan for the wife. When then start that process and get me a new truck, which will be about the time my older son will start driving, so he will get my current truck.

BTW: we will snowball the student loans, but probably not quite as aggressively as the revolving credit. This is where I somewhat disagree with Dave. Debt free is the best way, but if you have to owe money, I (and a lot of financial folks I know) think that it's best to owe money on house, car and/or education. We will also move up on the "baby steps," and start getting things lined up for the future, such as my retirement. I'm eligible to retire in less than 16 years.

[crokett]

. This is where I somewhat disagree with Dave. Debt free is the best way, but if you have to owe money, I (and a lot of financial folks I know) think that it's best to owe money on house, car and/or education. We will also move up on the "baby steps," and start getting things lined up for the future, such as my retirement. I'm eligible to retire in less than 16 years.

This is where I disagree with Dave too. For him 'all debt is bad debt'. This is not true. Properly leveraged debt is a money maker. Companies an most folks with money know this.

I have no revolving credit debt. I have a mortage, the interest on wich is deductible and a car payment, which is fully deductible through my wife's business.