Rate Increases Hit Home

From all the hubbub I’ve read in the news lately about credit cards being closed, rates skyrocketing, and limits being cut, we have yet to be affected by any of these issues until today.

I received a small pamphlet in the mail from Chase that looked like a privacy disclosure and was written in credit speak-aka legalese. It said in 1 month our rate will raise 4%! We have the option of writing Chase a letter and keeping our rate at the current % and closing our account.

I am completely frustrated by this, as a loyal and paying customer.

We are carrying a balance on the card, and it will take me 2-3 months to pay it off.

My options are:
1) close the account, pay of the balance ASAP
2) keep the account open, accept the terms, pay off the balance ASAP

What would you do? Have you encountered any issues with your credit cards in recent months?

About Kelly Whalen


Kelly Whalen is the founder of The Centsible Life, a blog where motherhood and money meet. Her goal is to help readers live well on less. Kelly is a mom to 4, and loves that she can stay at home with her kids, and still pursue her passions for writing, personal finance, and social media. You can often find her on twitter and Facebook talking money and motherhood.

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  • Rich Vaterlaus

    I was reading on one of the financial web site recently (I can’t remember exactly which one) about a woman who was negociating with a credit card company. However, she was negociating for a card that paid her a percentage back. She does not carry a balance on her card, paying the balance off every month and therefore the APR did not matter to her. What DID matter was that she got a card which would pay her. This opened my eyes. If you don’t carry a balance, you don’t really care what the percentage rate is. Therefore, what becomes important is whether the card has a different kind of advantage. If I spend $1000 each month on my card and pay off the balance every month then the penalty in the interest paid is $0 and I have gotten to use their mony for an average of 15 days. But if I can get a card that returns 3% ont he purchases I make then they will pay me $30 each month just for using their card. This provided a completely new view of how I now shop for credit cards.
    The point is that perhaps if they will not lower the rate, you can convince them to pay back a percentage and then get this card paid off ASAP so that you can be making money on your cards.

  • Rich Vaterlaus

    I was reading on one of the financial web site recently (I can’t remember exactly which one) about a woman who was negociating with a credit card company. However, she was negociating for a card that paid her a percentage back. She does not carry a balance on her card, paying the balance off every month and therefore the APR did not matter to her. What DID matter was that she got a card which would pay her. This opened my eyes. If you don’t carry a balance, you don’t really care what the percentage rate is. Therefore, what becomes important is whether the card has a different kind of advantage. If I spend $1000 each month on my card and pay off the balance every month then the penalty in the interest paid is $0 and I have gotten to use their mony for an average of 15 days. But if I can get a card that returns 3% ont he purchases I make then they will pay me $30 each month just for using their card. This provided a completely new view of how I now shop for credit cards.
    The point is that perhaps if they will not lower the rate, you can convince them to pay back a percentage and then get this card paid off ASAP so that you can be making money on your cards.

  • http://www.summerfitness.net Kristi @Summer Fitness

    I would not close the card. It sounds like you carry balances on your cards, which means if you close this card, your available credit will be reduced, increasing your overall utilization. That means a lower credit score. I would take the 4% hit, pay off ASAP, then put that card in the back of your bottom desk drawer and forget about it. To answer your question – yes – I have had several credit card lines reduced in recent months.

  • http://www.summerfitness.net/ Kristi @Summer Fitness

    I would not close the card. It sounds like you carry balances on your cards, which means if you close this card, your available credit will be reduced, increasing your overall utilization. That means a lower credit score. I would take the 4% hit, pay off ASAP, then put that card in the back of your bottom desk drawer and forget about it. To answer your question – yes – I have had several credit card lines reduced in recent months.

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