I'm not very good when it comes to this kinda thing

[NoArmsJames]

I got a letter today from my credit card company saying they're raising my rates. It's written in a very unclear way and I'm wondering if someone can help me figure it out. Here are the juicy details:

Due to extraordinary changes in the economic environment, we're reviewing our existing credit card accounts. Having considered these economic conditions, your accounts current purchase rate, and the length of time you've had this rate and account, we will be changing your purchase and balance transfer rate.
However, you will not be assessed a higher purchase rate listed below until next year*

Purchase and balance transfer annual percentage rate (APR):
a promotional rate equal to your existing non-introductory purchase APR through your January 2010 billing period. Beginning within two billing periods after that, a variable rate equal to 22.9% (0.6274% daily periodic rate) as of January 28, 2009. This APR may vary monthly and will be determined by adding 19.65% to the prime rate.
Please note that the rate on purchase balances and balances transferred at the purchase rate will NOT expire until least January 2010.
Any introductory or promotional rates on your account will not increase until they expire.
Special transfer rates are NOT impacted by this change.

*effective with your first billing period that begins after April 17, 2009, your existing purchase rate will be treated as a promotional purchase rate that won't expire until 2010.

I'm confused. They are raising my rate, but only until April?

They're also raising my default rate

a variable rate equal to 29.4% (0.08055% daily periodic rate) as of January 28, 2009. Your default APR may vary monthly. The rate will be determined by adding 26.15% to the prime rate
if we receive your payment three or more days after your payment due date twice within any 12 billing periods, we may increase your APR's immediately to the above default APR . We will return you to your prior non-introductory APR's if you make at least the minimum payment on time for 12 consecutive billing periods.
Please note that if your rates have increased to the accounts current default APR prior to the effective date of this change, your rates may be increased again to the new default APR if you make another payment that's at least three days late after the effective date of this change

This one's a little bit clearer, but still confusing.
The letter also says that I can decline these changes, and that my card will be shut off in May. It states that I cannot make any more purchases with the card after May (if I cancel), that I would have to cancel all scheduled payments, and I would forfeit any rewards. It also says that I'll be able to pay down my balance at my existing terms. Does this mean I can continue paying off the balance after May, or that it must be paid by May? I'm pretty sure I want to decline the rates, but not if I have to pay it off by May because I just don't have enough to do that.
Any help clearing this up would be very appreciated.

[motownguy]

To me it sounds like they're saying ...

"Because of the economic environment, some people aren't paying their bills. Consequently, we think we might be able to use some weird language to raise the rates you and other customers pay so that we can make up the shortfall. To do this we're going to talk about promotional rates that aren't really promotional and sort of gently and weirdly threaten that if you don't agree maybe we'll take your card away and cause you dreaded inconveniences."

Do you have other cards?
Is this one important enough to hassle over?
If so, how good are you at "what do we do now?"
Don't you love lawyers?
And credit card customer service peoples?
Fuck them?

[Alfredo]

I got the same letter and closed the account.

[NoArmsJames]

Originally Posted by motownguy

To me it sounds like they're saying ...

"Because of the economic environment, some people aren't paying their bills. Consequently, we think we might be able to use some weird language to raise the rates you and other customers pay so that we can make up the shortfall. To do this we're going to talk about promotional rates that aren't really promotional and sort of gently and weirdly threaten that if you don't agree maybe we'll take your card away and cause you dreaded inconveniences."

Do you have other cards?
Is this one important enough to hassle over?
If so, how good are you at "what do we do now?"
Don't you love lawyers?
And credit card customer service peoples?
Fuck them?

This is my only card. I won't lose sleep if I have to cancel it, though my credit score is only in the low fair range and I was hoping to improve it. I suck at what do we do now.

[motownguy]

Originally Posted by NoArmsJames

This is my only card. I won't lose sleep if I have to cancel it, though my credit score is only in the low fair range and I was hoping to improve it. I suck at what do we do now.

If you want to improve it, I'd keep the card but don't put any other charges on it. Pay it down as fast as you can. When they see that you've stopped charging on it, they'll probably lower the rate again to get you charging again. Don't fall for it. Take the lower rate and keep crunching away at the balance. Get it down to zero and keep it for emergencies.

[NoArmsJames]

Originally Posted by motownguy

If you want to improve it, I'd keep the card but don't put any other charges on it. Pay it down as fast as you can. When they see that you've stopped charging on it, they'll probably lower the rate again to get you charging again. Don't fall for it. Take the lower rate and keep crunching away at the balance. Get it down to zero and keep it for emergencies.

Thanks, good idea!

[TheGrundle]

I'd close the card and transfer the balance to a new card with a low, fixed introductory rate. Just pick out one of the credit card offers from the mail or find one online. Not sure how that would impact your credit though.

[NoArmsJames]

Originally Posted by Lord of the Cock Rings

Yes!



Yes, but don't necessarily close the old card, for some reason having too little open credit is just as bad as having too much. Since you don't have a mortgage or car loan, having a couple cards is probably good. If you can get a second one with a low rate for balance transfers, deeew it.

I dunno, credit has always made me nervous. Both my parents have fucked credit scores, and I've seen the kinda crap it causes. The only reason I have this stupid card is because I needed it when my last computer died.

[MonsteroftheId]

Originally Posted by NoArmsJames

I'm confused. They are raising my rate, but only until April?

The technical aspects are a little obscure but they are saying that the new purchase rate will not take effect until next year. They will be treating your current rate as a promotional rate starting in April '09 until January '10 (which is why you would want to cancel the card before then if you planned to close the account.)

Ideally you could pay the debt off before the rate jump (nine months from now.)

[truthv7]

I heard that canceling a credit card will sometimes cause you to lose the credit you built with it. It's better to pay off the card and just put it away or cut the card and don't use it, so your credit score doesn't go down. Anyone know if this is true, I heard it on the Tom Leykis show.