- Dec 11, 2006
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Ok so as most of you have probably heard, credit card companies have begun jacking up interest rates and slashing the amount of available credit. So I have a question for the credit experts out there.
I used to have an awesome card with Washington Mutual (WaMu) that had reward points (which I racked up from using it on business trips) and a nice low interest rate.
Everything was fine and dandy, until Chase bought out WaMu, and immediately they gave me a month to use the reward points saying that they were doing away with the program. So I use them up and get a gift card, still thinking I'll keep the card around for it's decent interest rate. Now fast forward to a few weeks ago, I get a letter from Chase last month saying that they are going to jack my interest rate from around 10% to something like ~24%!
A big WTF from me. I read the fine print where they stated that if I don't accept the new massive rate hike I can call them and they basically lock in that interest rate but close the card once it's paid down all the way and lock the card from use. So I'm debating now whether it's worth keeping it and paying the massive interest rate hike (which sucks) or just locking the card and paying it down; the problem lies in that if I pay the card down and it's closed out, I'll take a credit rating hit from the card disappearing.
So my question is this: is it worth paying the card down and closing it, and just taking the hit on my credit rating, or is it better to keep the card and pay the exorbitant interest rate hike? Keep in mind that I have not been late on any single bill at all for over 5 years, and my credit rating was steadily on the rise before all this credit card reform business.
I used to have an awesome card with Washington Mutual (WaMu) that had reward points (which I racked up from using it on business trips) and a nice low interest rate.
Everything was fine and dandy, until Chase bought out WaMu, and immediately they gave me a month to use the reward points saying that they were doing away with the program. So I use them up and get a gift card, still thinking I'll keep the card around for it's decent interest rate. Now fast forward to a few weeks ago, I get a letter from Chase last month saying that they are going to jack my interest rate from around 10% to something like ~24%!
A big WTF from me. I read the fine print where they stated that if I don't accept the new massive rate hike I can call them and they basically lock in that interest rate but close the card once it's paid down all the way and lock the card from use. So I'm debating now whether it's worth keeping it and paying the massive interest rate hike (which sucks) or just locking the card and paying it down; the problem lies in that if I pay the card down and it's closed out, I'll take a credit rating hit from the card disappearing.
So my question is this: is it worth paying the card down and closing it, and just taking the hit on my credit rating, or is it better to keep the card and pay the exorbitant interest rate hike? Keep in mind that I have not been late on any single bill at all for over 5 years, and my credit rating was steadily on the rise before all this credit card reform business.
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