Comments on: Credit Card Default Rates

By: Balance Transfers Helper

Balance Transfers Helper — Wed, 15 Jul 2009 18:55:06 +0000

I would definitely try to get approved for a new balance transfer credit card with a low rate as soon as possible, as they could list your account as past due on your credit report. As to this being legal, I honestly don't know. As to this being fair, clearly it is not. Also, many people are tempted to close their old accounts out of spite. However, this act can damage your credit score. Your best bet is to transfer your balance and leave the old card open so as not to negatively impact your credit score.

By: Jessica

Jessica — Wed, 15 Jul 2009 17:27:59 +0000

I recently complained to Chase about my credit card account (formerly a WAMU card) being charged a $39 late fee even though the payment was debited from my bank account 2 days BEFORE my payment was due. They told me that since the payment was not processed until the day after my due date, they would not reverse the charge. I told them I would take my business elsewhere.

The same day, I accessed my account online and they added a “change in policy” statement and edited my previous statement (there are literally 2 statements for the same billing period)to put my account in default and raised my interest rate to 19%, and more than doubled my minimum payment in order to lock me in.

Can they do that? I know they can raise my interest rate, but it seems that they did whatever they could to prevent my ability to transfer my balance. This all happened yesterday. Do you think I can still transfer my balance, or is it too late?

By: Balance Transfers Helper

Balance Transfers Helper — Tue, 02 Jun 2009 17:14:43 +0000

The damage applying for a new credit card is generally minimal, with most estimates of around negative five points. However, if approved, the new credit limit should reduce your credit utilization ratio (i.e. the amount of available credit you are using) and that can actually improve your credit score.

Furthermore, unless you are planning on buying house in the next few months, the small potential credit score decrease should not deter you from seeking a fair interest rate. At 30%, your debt will be doubling very quickly, and getting out of that debt will cost you a lot more than a few points on your credit score.

By: Pamela

Pamela — Tue, 02 Jun 2009 17:05:53 +0000

I have credit cards with both Citi Bank and Chase bank who are both charging me upwards of 30% every month. One of them actually closed my card because the minimum payments they were charging me did not cover any of my principle balance and it kept rising without my knowledge. Now I’m overlimit, they’re charging me as much as they possibly can, and I feel like I can’t do anything about it. Because my husband and I are self-employed it’s very difficult for us to get any sort of loan or credit. We want our earnings to look small to Uncle Sam and huge to the bank. I hesitate to try to transfer the balance as I realize it will affect my credit if it’s checked and I still may not get the card because of our situation. What can I do?

By: Balance Transfers Helper

Balance Transfers Helper — Fri, 17 Apr 2009 15:30:45 +0000

Christina,

If you act quickly, you may be able to transfer your balance to a new credit card with a lower rate. However, once the bank reports you as being late to the credit bureaus, your credit score will probably drop dramatically, which will make it all but impossible to do a balance transfer.

I’m really sorry to hear that this has happened to you, and am outraged that your interest rate is 34%. If you get a chance, please let us know what company is charging this rate.

I really wish you the best of luck and hope you can find a way to avoid bankruptcy. Bankruptcy can really wreak havoc on your life for essentially a decade, so if you can’t refinance with a balance transfer, you may want to consider a credit counseling firm. These firms work with your credit card companies to lower your rates and set up a repayment plan you can afford. Unfortunately, I do not know enough about these companies to make a recommendation. However, I do know that you should avoid any company that promises to cut your debt by X percent, as these companies are dubious at best.

I know there are Christian credit counselors that operate as non-profits and do not charge fees. This may be a good option.

Once again, I am truly sorry for what happened to you and wish you all the best.

By: Christina W

Christina W — Thu, 16 Apr 2009 16:05:42 +0000

I failed to make a payment on month (simply over looked it) on one of my credit cards. I have been with this company 12 YEARS without missing any payment. They not only defaulted me and pushed the interest to 34% (yes, 34) but they closed the card and want me to pay $630/month instead of the minimum of $296. They are not willing to work with me and I can’t afford the $630 on top of everything else. I am seriously considering Chapter 13 to stop all the fees, interest and hassle.