opting out of new credit card terms... - Mothering Forums
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#1 of 9 Old 01-27-2009, 04:00 PM - Thread Starter
 
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If I let my cc expire does it hurt my credit? I just received a notice that they are changing my terms and I don't feel like paying 16% on my balance. I understand that if I opt out, I pay off my balance under my current terms...
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#2 of 9 Old 01-27-2009, 04:02 PM
 
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correct, but the account will be closed and you would not be able to charge more stuff on that account.

As for it hurting your score, unknown. Your credit score is made up of several different things, debt/ income ratio, available credit, length of credit, payment history, etc, etc.
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#3 of 9 Old 01-27-2009, 09:22 PM
 
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Have you tried calling them about the terms that they're changing? I have one card that has repeatedly tried to change me from a low, fixed rate to a variable rate (which for the past few years has been lower than my fixed rate). Every time it happens I call them and explain that I want to keep my old rate. They usually have to get a supervisor, but they leave my rate alone.

But, you're right. If you opt out, you pay off your balance under current terms, but you close your account. Depending on how old the account is and how much available credit you lose, this could hurt your score significantly.
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#4 of 9 Old 01-28-2009, 11:50 AM - Thread Starter
 
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It's a Citicard - the woman told me it's an across the board decision. And she was wonderful to me on the phone - very helpful (my payment had arrived late for some strange reason and she waived my fee and reversed my rate increase penalty). We have an ENORMOUS balance on the card and have stopped using it anyway (very little balance left...) and it's one of (shhhhh) like, 7 credit cards. So even though we've had it for almost 10 yrs, I'm not thrilled about paying an extra 4% (it increases to 16%!) on that huge balance. ANd I'm not closing my account so much as I'm letting it expire. Isn't that different?
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#5 of 9 Old 01-28-2009, 01:20 PM
 
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Originally Posted by cristina47454 View Post
It's a Citicard - the woman told me it's an across the board decision. And she was wonderful to me on the phone - very helpful (my payment had arrived late for some strange reason and she waived my fee and reversed my rate increase penalty). We have an ENORMOUS balance on the card and have stopped using it anyway (very little balance left...) and it's one of (shhhhh) like, 7 credit cards. So even though we've had it for almost 10 yrs, I'm not thrilled about paying an extra 4% (it increases to 16%!) on that huge balance. ANd I'm not closing my account so much as I'm letting it expire. Isn't that different?
I think closed is closed. Though your physical credit card may have expired, this is not the same as closing the account. You actually have to tell them to close the account which is better done after the balance is paid, though if it will cost you money to keep it open I would close the account and take the ding.

If it is your ONLY credit card with any kind of history, yeah, it will knock off some points. How old is your other credit? If you've had a car payment or a mortgage that is history too. I would not do something that is bad or risky financially to preserve some points on your credit score. Canceling an old card is not like declaring bankruptcy, having a car repo'd, or bills going to collections.

"It should be a rule in all prophylactic work that no harm should ever be unnecessarily inflicted on a healthy person (Sir Graham Wilson, The Hazards of Immunization, 1967)."
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#6 of 9 Old 01-28-2009, 01:24 PM
 
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Citibank is really in trouble these days. I have a small bablance at 1.99% on my Citibank card and for "some strange reason" my last payment also came in late--even though I sent it in PLENTY of time for it to be received--and all my other bills paid the same date were received by their various places within a day of each other. Never in my life have I EVER had a late payment. They charged me a late fee, jacked my rate up to 28.99%. I was on the phone with them for over a week and finally got it all straightened out, dropped the late fee, lowered my APR, etc. I have decided to go ahead and pay off that balance and be done with Citibank just because of the crap they pulled. I know I wasn't making them a lot of money, but now they won't be making any money off of me anymore. We're also in the process of refinancing out mortgage (currently held by Citibank) and didn't even consider going through them. Partly because the rate we were quoted was slightly higher than the local bank, and partly because I don't want to give them a penny more!
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#7 of 9 Old 01-28-2009, 01:39 PM
 
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By expire do you mean the expiration date on the actual card???

You'll have to send in a letter to opt out of the change and when you do that they will close the account.

If you're in the process of paying off debt and don't see any major purchases in your future over the next couple of years, I wouldn't worry about the hit to your credit score. If you pay off your other cards and have a decent debt to credit ratio you should be okay.

But, take a look at some of the credit bulletin boards that are out there and do some reading of what other consumers have experienced.

Best wishes.
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#8 of 9 Old 01-28-2009, 04:00 PM
 
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Originally Posted by Mama2CarolineLydia View Post
Citibank is really in trouble these days. I have a small bablance at 1.99% on my Citibank card and for "some strange reason" my last payment also came in late--even though I sent it in PLENTY of time for it to be received--and all my other bills paid the same date were received by their various places within a day of each other. Never in my life have I EVER had a late payment. They charged me a late fee, jacked my rate up to 28.99%. I was on the phone with them for over a week and finally got it all straightened out, dropped the late fee, lowered my APR, etc. I have decided to go ahead and pay off that balance and be done with Citibank just because of the crap they pulled. I know I wasn't making them a lot of money, but now they won't be making any money off of me anymore. We're also in the process of refinancing out mortgage (currently held by Citibank) and didn't even consider going through them. Partly because the rate we were quoted was slightly higher than the local bank, and partly because I don't want to give them a penny more!
Hrmmmm Our Mortgage is with Citi. We refinanced with them in 2007. Before that we had adjustable rate. Now we are on some smart program that is through Citi. I was told it was "different" than the regular mortgage problems. Before that we had Country Wide so this was an improvement.
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#9 of 9 Old 01-28-2009, 06:01 PM - Thread Starter
 
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I know I have to call or write to opt out, but my understanding is that when the expiration date on the card rolls around, the card will expire. Until then I can use it (I won't though -it's almost maxxed out)

We're snowballing our debt and doing well with it, but this card is like 4th or 5th on the list and we won't even be making a dent in it until late 2010 - which is why the interest hike is so problematic.
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