wnyc.org / 93.9fm / am 820

I have a question I'm hoping Ms. Kamenentz can answer:

I have six credit cards ranging in limits from $500 to $3300. The average balance is 85% of their respective limits. I've never missed or been late with any payments or gone over limits.

One of my creditors told me they're going to raise my interest rate from 8.99% to 13.99% and that I can "opt out" of this change.
I asked, what will happen if I opt out?

They said: We'll close the account; you won't be able to charge anything else to it; you can continue to make your minimum monthly payment; your interest rate will stay at 8.99%; and it will have an adverse affect on your credit rating.

I said fine, no problem. But, will my voluntary closing of this account give cause to any of my other creditors to close my respective accounts, raise my interest rates, or take any other punitive action against me?

They said, Oh no, don't worry about that. That won't happen. They'll see that you chose to close it and that it wasn't closed because of delinquency or default.

Is this true?

Will opting out of a finance charge increase and consequently closing that account with one creditor really not give cause to any of my other creditors to raise their finance charges or demand payment in full for balances?

I couldn't care less if my credit rating tanks. But I don't want to enable all of my creditors--or even one of them--to call in their chips by choosing to close this one account.

Please advise.

And thanks for your help!

P.S. I called all six of my creditors and was able to get two of them to lower interest rates simply by asking. One went from 15.99% to 9.99%, and the other went from 19.99% to 13.99%. These were the two highest rates I had.

No low or even moderate income person should ever use a credit card other than for consolidating payments which are paid off in FULL each month when the bill is received. If u find urself paying interest on credit card debt, u should not being using credit cards! People simply have to live at least WITHIN their means - i.e. spend no more than their income or better, BELOW their means - i.e. SAVE at least 10% of their income automatically even BEFORE they've spend anything. The fact is, America is NOT poorer that it was 30-40 years ago when the personal savings rate averaged 8-12% of income. What HAS changed is people's unwillingness or perhaps even their inability to live prudently with respect to their personal finances. Maybe we need more paternalism & the governament should make credit card issuance to low & middle income people ILLEGA - just as we paternalistically FORCE people to 'save' for their retirement via mandatory social security taxes who otherwise would probably not save anything!

Here is a reference to PBS Frontline - Secret History of the Credit Card

http://www.pbs.org/wgbh/pages/frontline/shows/credit/

Hello everybody, you can read my answers at

http://anyakamenetz.blogspot.com/2009/02/brian-lehrer-show-questions-bankruptcy.html

AAARRRRGGGGHHHHH!!!!!

i think we have clearly seen that the massive bail outs will not 'trickle down' to Main Street. These behemoths will keep the money, & will continue to scoff at the nation while theyre at it.

The only thing that will citizens of this nation in any serious way is to enact an amnesty program for cardholders. Erase our debt, at least card debt, and let us start over -- perhaps with some capping provisions.

Along that line, there should be a percentage forgiveness of loans for long term home owners and perhaps a scaled-down forgiveness for more recent buyers.

A card debt amnesty would enable cardholders to begin spending again, with some controls on their card use.

If banks are so worried about people defaulting on their credit cards why don't they lower interest rates rather than raising them up to 30% making defaults more likely?

Why am I paying off my credit card bill? The only punishment I see connected with bankrupcy is the limit to my ability to borrow for a decade after I'd declare, and I don't plan on borrowing anything from anyone anytime soon. Maybe it's the dark conservative corner of my soul speaking, but I've always felt that this simply encourages people to live beyond their means, and make people around them look poor, or cheap, in comparison.

To JL from NYC:

You need to be realistic and responsible. Look for a job that pays more than 20K. Yes, you may have to sacrifice your chosen profession, but you have taken on a debt for which you are responsible. Please don't ask the taxpayers to bail you out. (Yes, it is terrible that the bailed out banks used the money to pay bonuses, but I think they will get their own shortly.)

FYI-if there is a late or over the limit fee charge you should always call regarding this charge. You have nothing to lose and they may actually credit your account.

You should definately call to request a lower interest rate and if the first person says no, ask to speak to their supervise, until you have exhausted the chain of command. Also, if you call and get an outsourced call center, ask for the phone number for customoer service in your area (aka on shore, not off). The people working in other countries have a script to which they respond to your set questions.

Just a little bit of info I have learned from this "economic crisis".

Good luck everyone!

what the caller said was not true.
i tried to walk away from credit card debt about 10 years ago and they still are after me. whenever i think i'm free one of them pops up again. it's a nightmare. just keep paying what u can even if it's $10 per card per month.
and it is still on my credit reports. they even call my mother sometimes.
they never stop.

Why not come up with a not-for-profit credit card card. And totally shock a system the credit companies assume they control.

Ha, my bank turned us down for a mortgage and now everytime I walk up to a teller, they tell me that I qualify for a credit card and ask me if I am interested in it. I give them a smirk and say politely, "no thank you". They give me the look a waiter gives you when you don't give a tip. Whatever...

I'm behind on 2 months of payment on 2 cards. Citibank has just sent a letter with some "options" - for one of the cards with a balance of about $9000, Citi is offering that I pay a lump sum payment of $4500 right now or even in installment payments, to freeze interest, and in an effort to bring my balance to zero as soon as possible. Is there fine print I'm missing? Does this sound too good to be true? If I can scramble some money together, should I pay the lump sum??

I have a credit card with a balance and a low promotional rate until the balance is paid in full. I do not use the card for any purchases and only want to pay off the balance as quickly as possible. I recently received notice the apr terms would change but not affect my promotional rate. Should I not accept the new higher apr terms and close the account? How will my credit score be affected by leaving the account open or closing it?

Every time a credit card hits you with an absurd late fee or penalty call and complain! They may take the charge off.

To Charl from Jersey City, the exact same thing happened to me with Capital One. I didn't pay, and I told them to close the account. They had reported me to credit agencies, but withdrew the complaint when I closed the account.

Be wary of statistics. That speaker said his bank will loose $10 billion in unpaid credit cards. He didn't mention how much they were going to make on the rest of us that do pay their credit card bills

I hope millions of people default. Punish these irresponsible, immoral companies.

It is obvious that there is money to be lent. And it is also obvious that supply of goods and services as well as staples exceeds demand. WE live in a sharecropping society where those that hold the wealth do not want us to realize the obvious facts of our economy. The don't want us to "own" they only want to "loan". When we all realize that we wil be able to force an end to this situation.

Chase just sent me a noting that as of my March statement they will be raising interest rate from 9.99 to 13.99% for all new purchases and the existing balance. They do offer an opt out - cancel the card and pay off the existing balance.

Any suggestions?

Consumer Reports reports:
After getting hundreds of billions from taxpayers, banks want to reach into your pocket again.

They are jacking up interest rates on your credit cards and reducing credit limits (which can negatively affect your credit score), so they can collect more money from you as their other investments tank.

You can do something about it!

Over the past decade, credit card banks offered us trillions more in credit than we actually wanted. Sending dozens of offers a year by mail, hawking cards to youthful college students without regard to their ability to pay, and setting minimum payments so that it takes decades to pay off a balance, they tethered millions of people to credit card debt.

Today, with jobless rates rising and markets in turmoil, millions of American families are trying to shed that debt. Federal agencies have already agreed that we need to curb these credit card practices, but postponed implementing sensible new rules until July 2010. We need those rules and more right now.

Congress is considering quick action—show your support!

FICO has been overhauled. New calculations as of March. Diversity counts more. Closing cards are now worse. Check pit Consumerist and Lifehacker.

To Paul, contact a credit counseling company. The one that I use is CCCSatl.org, doing this is better than not paying at all. Most creditors will negotiate lower rates. AMEX will not. Some drag take their time accepting the proposal and will add late fees and over the limit fees to your accounts so be aware of it. It does take some time to get things set up and going, but I think it is better than bankruptcy. Good luck! P.S. I did this last year and my balances are going down quickly at low interest rates, much lower than what I was paying.

the denominations available at the ATM are much lower. i find that most ATM's are capped at $60 on the touch screen. I feel like most ATM's used to start at $40 or $60 and go up through $100?

(hell from Nora! Your old intern :)

Regarding the first caller Bryan! I think the guest can talk about differences of rewards and miles but paying your credit card full everymonth. that is an advantage, don't you think?

For a future show...can you please address the issue of student loan debt--specially: i have $225,000 in student loan debt. My income is about 20K per year. I haven't been able to pay it. (I'm 39.) Interest accrues. I enrolled in the federal Ford program that allows me todefer payments, and after 25 years, I will be forgiven the loan, but will have to claim it as taxable income. I can't even get married because then my husband would become responsible for the debt! Given what has transpired in recent months--fraud, bailouts, etc., what about something for those of us who were desperate for an education (I have a masters degree), but didn't have family or other support, so we chose loans? And we also happened to choose professions in which the earning potential is low. Thank you.

[[JL - We will definitely be honing in on the question of student loan debt with Anya in future weeks. Stay tuned, and thanks for posting!]]

I'm in really deep to credit cards - they've hiked up my % rates to over 24% and I'm behind on 3 cards and one card is over 300. per month. I can't do it. I can't even afford to go bankrupt. Is there anything I can do or go for help?
Paul

please have your guest comment on the phenomenon of "tailing interest" charges when you close a credit card account. you pay off the balance and, lo and behold, a month later you receive a bill for "tailing interest."

I have only one credit card (and a mountain of student loan debt) with about a $2,000 balance and a $4,000 limit. I have not really been reading my statements too closely, but I pay more than my minimum monthly and have not ever been late. How closely should I be watching Citibank to see if they are playing around with my terms, billing cycle, etc.? Also, I am planning on using my tax return to pay off the credit card, seems like a good idea, right?

(Can't wait till you talk about student loans!)

I have heard that you can negotiate lowering finance rates with credit card companies. How low can you realistically get them to go? If you negotiate it once, can you try again later?

I haven't paid interest in years via the 0% offers. Is this a bad idea for any reason?

Is it true that the credit industry calls those who DO NOT carry balances month to month, "DEADBEATS!"

funny.

At 25 to 30% interest it will be a cold day down under (much colder than today) before I charge anything. After trying, unsuccessfully, to get my creditors to lower my rates, I put all of my high interest rate credit cards into a credit counseling program. Now I actually have a few with as low as 2 and 5 percent interest. Why couldn't the creditors negotiate this with me directly? Believe me I tried. One in particular was Chase, they raised my interest to almost 30% because of something on my credit report...unrelated to the account I held with them. The absolute worst is American Express and Sallie Mae. I am looking forward to the show re school loans, my son struggles to pay his VERY HIGH interest rate loans with Sallie Mae. People will not buy anything at these rates and fees.

I have a credit card that I took down to a zero balance, and did not close the account because I had heard that it would impact my credit rating. However, because I was used to not paying since it was a zero balance, I missed seeing that there was an annual fee of $25. I paid it a few days late because of that, and they slapped me with a $19 fee for late payment (on a $25 fee!!!!). Are they able to affect my credit rating on such a ridiculous amount? Should I just close the account?

Is there one credit card she can recommend applying to now?

Isn't the Stimulus Package just a big ole Debt Consolidation? Instead of individual citizens each having large debt, preventing them from spending, the US Govt is going to rebate our debt, and take it on nationally. So, then we will not owe anything, and can go back to spending, but the US is going to owe China and our children a ton. Now or later, somebody's gotta pay.

WIC and EBT cards are already in circulation.

How about something similar for the masses?

End the paradox!

Idea proposed: direct consumer investment

"The StimCard"

(after seeing how folks in the South Bronx use WIC and EBT cards)

The Federal Government mails a "STIM CARD" with a balance of perhaps $2,000 to every taxpayer. The card can only be used to buy products and expires in 60 days. Purchases would be made at stores and through the Internet. Only strategically-select product categories would be available for purchase and they would be listed on a website set up to guide consumers. Who would not spend this money? How about $200 billion out the door in two months?

with the chase take over of wamu they have upped the APR to 20% on my wamu credit card, where with wamu it was much lower. can they do that? how can i get it to what wamu promised me (can't remember off the top of my head what it was, but it was much lower)?

Chase bank credit card payment
Phone payment - $10.00 charge, $15.00 charge if you talk to a person

United Illuminating, CT
Transaction charge $3.50 to pay online

RCN (Erols) internet, cable TV, phone, bundles
$5.00 charge to have hard copy of bill sent to you through the regular mail
to pay bill by phone, $3.50 fee charged
impossible to pay online as no matter what, the user name and password never match up. If you try to register again - instructions on that page tell you to enter your email address but there is no place, space or box or line where you can do that.

and so it goes.
My solution - for those companies charging a fee for online or phone transactions, put the check in an envelope, for a few cents save yourself from the aggravation and let them pay someone to open all those envelopes and record the transactions. Or better yet, deduct $5.00 from the due amount and charge them $5. for sending a hard copy of the payment.

Muriel

I don't understand; isn't capitalism based on paying the least amount of money for the best possible product you need? If indiscriminate spending is "necessary" to keep the economy going...that means our whole economy is a fantasy!

...just kidding. Of course I already knew that.

I'd like to know what is the banks' motivation on a 0% credit card for a year?

Our credit card company just raised our rates despite our constant pay down, no late payments etc. We don't use it much, but to rent cars and such, but they raised the rates because they are trying to raise money? Even at times of such low percentage points?!

I'm very angry at this business. Just wait till you hear my student loan story!

when should one seriously consider bankruptcy?

Question: How do you effectively deal with Credit Card companies that out of the blue lower the amount of credit you are extended? I have called and written but I have gotten no reasonabale response. I manage my credit very well each month.

No, Gov. Paterson the problem is not that people aren't spending money. The problem is people HAVE no money to spend. Incomes have declined over the last decade and people have kept up by borrowing. They can no longer do so, and now have nothing to spend.

I have a credit card, but I use it only to increase my credit score (charge it once a month, pay it full every time). Can AMEX close my account at any time? They are not making money from me, therefore I am afraid they would close the account, thus killing my credit score.