I'm no stranger to the world of credit as I started my business career in the banking industry but have been away from it (by choice) for many years. Here's the deal: In 1999, I was self employed and had a 'cancer scare.' Turns out, I didn't have cancer after all but the situation drove me into bankruptcy. I was so looking forward to not having that BK on my credit bureau file at the end of the year. Of course, when I was offered 'pre-approved' credit cards, I took them in an effort to re-establish a credit history. I have 4 credit cards with Cap 1 that I've had for YEARS now and have NEVER missed one payment EVER. ALWAYS on time. During the last 2 years, I have kept my balances close to my credit limit but never over. I received a letter the other day from Cap 1 stating that they are raising my rates to 22% and 29% should I ever be late or 'in default' They also said that if I didn't like this, I could choose to 'close' my accounts and they would allow me to pay them down and off at my current rates which are around 13% but, of course, no more credit. Question: if I elect to 'close' these accounts and pay them off on a monthly basis, is this considered a 'negative' on my credit bureau report? Quite frankly, if it is, I'm considering defaulting. I really feel like I'm getting 'bent over' here. If they are going to treat me like a 'deadbeat', I might as well just BE one. I can handle them or anyone else 'coming after me.' I would appreciate any info on how this 'closing of accounts' will appear on my CB report. Thanks, UMT
I would close the account and pay it off. While a closed account will have a negative effect. What you have to consider is the negative effect will possibly cause trouble in the future, but the new interest rate will definitely do harm to your min. mo. payment (which will double). Just my $.02.
cap 1 My daughter just got the letters from the butt-sniffs at cap 1 which means mom will have to help her out.CCbob what would happen if everyone said F**K you and defaulted boo hoo cap 1 no incoming dinero no year end party.This is jj's dh posting.she didn't want to use the profanity so i helped out.She' really a gentle lady,until you mention cap 1.
They're all raising rates and default rates before the new laws passed by Congress take effect. Why they made it effective over a year in the future is anyone's guess--until you realize that Chris Dodd and Barack Obama were the biggest recipients of funds from the financial industry. So they can say they passed a law to help the consumer, but they sure make sure the banks have time to get their ducks in a row. It's nothing personal against you. I got the same letter. Probably every account holder did. If you never pay late, it won't apply.
1. Glad to hear you didn't have cancer. 2.You wrote 'should you ever be late or in default'. Sounds simple enough, don't pay late (not being sarcastic). 3. Do the cards have a yearly fee? A. If they do, I would cancel them. Yes, it shows on your report negatively, but I don't believe it affects your score (I could be wrong). B. If they don't, pay off the balances and use the card no more than 3 times/year and send a check the day after you make the charge (assuring you won't be late).
If you cancel the cards with a balance owed on them, your score is going to tumble. Your credit limit will likely report as -0- balance. 30-35% of your FICO score is based on utilization. As Jackal said, if you aren't late, and you don't go over your limit you have nothing to worry about.
Not to thread hijack but I didn't want to start a new one since my subject is Capital One related. I have excellent credit and I have a CO card. I've had a 8.99% fixed card for at least 3 years and today they sent me a letter saying they are raising my APR to a variable 17.99%! Never missed a payment or anything! Suffice it to say I want to dump them but I don't want my credit score tanking. I have a Citibank card which I could balance transfer the CO debt over to and pay off that way and leave the CO account open but just not ever use again, or should I decline the terms and pay off the Capital One debt at the current terms?
Stinks that these clowns seem to have targeted accounts in good status. I found a site on consumer reports and they seemed to go after the people in good standing.
By the way my credit score is around 725 or so. If I closed the account how bad would it affect my score?
Because your paying they think you will keep paying.The others will default and they'll have to settle for less.It's like your brother breaks something and you get punished.
Just remember... To a credit card company, the "deadbeats" are the ones that pay their bills on time and pay off their balance. The ones who run up the card to the max are the "good" customers because it's from them that they get all their interest in fees.
True,however they make money off both,some more than others.If you buy a watch for 200.00 and pay min payments that watch will cost you 500.00 when or if you pay the balance
