http://www.foxbusiness.com/story/personal-finance/credit-card-companies-raising-rates-consumers/
Dave and I have one credit card. We have kept it because apparently your credit report looks bad if you don't have any credit cards. We put a few things on it from the weddings and were paying more than the minimum payment. Our balance was low. We paid it at least a week before its due date without fail, every month.
Last week, the credit card company dropped our credit limit and raised our interest rate. Dave was furious. He called the company and was told it was an across the board decision - every one of their cardholders experienced the same thing. He asked to speak to a supervisor and was told the same thing.
Dave was so angry he pulled the balance out of savings and paid the card off. He said he wants to cancel the account, but I worry that will only look bad on our report. It doesn't seem fair that we would receive a bad mark, but according to various financial experts, that would be the result. We're still not sure what we will do.
We were acting responsible - paying more than the minimum on time every month. Yet we were penalized.
Fair warning folks. Watch your accounts carefully.
4 comments:
i would shop around for a different credit card before you cancel the one you have. i know we have changed cards once or twice over the years as they change their rules or have decided to add a yearly service fee, which we refuse to pay.
according to clark howard, actually don't cancel it, once it's paid off, only use it every 6 mo, for say even $5 to keep your credit rating good. the amount charged doesn't affect the rating but you're right, canceling it does.
at times it does feel everyone or everyplace is trying to squeeze you out.
I did a search for this topic and came up with a lot of hits. Type in:
closing credit card affect credit score
and Google that phrase. Lots of interesting stuff there.
I would just charge a small amount on that card every month and pay it right off every month to keep it active, like Nancy suggests. It's becoming harder and harder to get a credit card and you don't want to be without anything once we get out of this slump.
Better times are ahead but we just have to ride this storm out for a while.
Thanks for the info Nancy and Chris. I've always wondered if it helps or hurts. Now I know! :)
Betsy, I pay my full balance each time I receive my bill and my credit line was reduced as well. It seems that credit card companies are reducing the credit line with good customers to enable opening credit cards for new members. Not sure how I feel about it because I never used the amount of credit they allowed me. I just know that if I did need it, it's not there anymore. Doesn't seem quite fair, I agree.
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