I know this is not recommended, but I closed the damn Chase account anyway.

[FlyingSquirrel]

I got screwed over by Chase before and I even have some nasty bumper stickers on my truck decrying them as a predatory lender. So now they took over my WaMu credit card (which had already screwed me over, by jacking up my rate shortly after taking over my Providian account). Now I know you're supposed to just hold on to your credit cards, pay 'em off somehow, and then just put the card in a drawer but not close it. This is supposed to improve your credit.

But I just can't do it. For one thing, I've seen what they can do and I don't trust that they won't jack up my rate even more than WaMu already did. (BTW, I have never missed a payment to anyone in over 7 years).

For another thing, I just can't possibly keep a Chase account open. Just can't. So to hell with conventional credit wisdom - the account is now closed.

[tabatha]

1. Since I did the same, all I can say is it is a good thing.

I don't trust Chase, and never trusted WAMU either.
They're both closed and gone for me.
I think I'll look up credit unions soon.

[KharmaTrain]

2. And Who Do You Trust?

I trust no one in the financial world these days...and just hope for the best. By jacking up their rates, I have stopped using cards and am back on cash and carry. Hopefully enough others will do the same and these bloodsuckers will start feel the hurt at point of sales...the place where they make money off us "deadbeats" that pay balances on time.

Chase seems to be one of the more solvent banks...moving may just put you in a situation you'll regret later. I'm no fan of Chase, but right now the banking system is so screwed up, there are few good alternatives.

[Sherman A1]

7. Another "Deadbeat" here....

If there is a card you don't want to use anymore, I don't think I would close it, but only use it very infrequently. It keeps the account open (if you might need it) and probably costs them a bit of money to send out statements, etc. Charge a tank of gas once per month and then overpay them by a few cents when sending in the money. Switch it to a card with some cash back or rebate program (I have a Chase card that gives me 3% back on gasoline purchases and I pay it off every month, so I pay a little less on something I must purchase in any event).

Game their system to your best advantage.

[ET Awful]

18. Here's a man who knows how to beat them at their own game

:)

[dkf]

3. The whole system of determining credit scores is whacked.

I never understood why they like people who have a lot of credit.

I couldn't get the lowest rate for my car loan because I didn't have a mortgage. Since when does having a huge housing expense better enable you to pay your car loan?

[Common Sense Party]

5. It is whacked. Even more whacked? Your car insurance rates

are a direct reflection of your credit score.

:wtf:

It's true. Besides just looking at your driving record to see if you have moving violations, insurers also check your credit history and decide how much you'll pay based heavily on whether you have a high credit score.

[Stellabella]

32. No kidding. I've been paying off credit cards, and my score is going DOWN.

Explain that one!!

[burythehatchet]

9. It is quite simple. The more you are seen to be tied into the financial system

with mortgages and credit card debt and so on, the more they will lend to you.

[dkf]

10. And isn't that a lot of the problem?

The financial system rewards people who have access to credit beyond their ability to repay.

People who avoid getting over their heads get penalized.

As I said, the system is whacked.

[Common Sense Party]

4. Screw that. We closed all our credit cards except Home Depot

as we paid them off. It didn't hurt our credit at all.

[ET Awful]

15. Home Depot credit is backed by Citi if I'm not mistaken.

So your open account is most likely with Citibank, not Home Depot (who just has their name printed on the plastic).

[onethatcares]

39. why start with a 24% interest rate?

seriously, that's the beginner rate for a Home Depot card, or a Lowes for that matter. One mistake and down the tubes ya go. Good luck, and I mean that sincerely.

To me, if you were gonna use a credit card, use one with a low rate, 7.9 or there about. Just thinking about the 24% scares the beejezuss outa me.

[BlooInBloo]

6. Can you try a card from a credit union?

[ET Awful]

19. This is your best bet for MANY reasons.

Better rates, better service, they'll almost never jack your rates, etc. It also pays to have a good relationship with a good Credit Union for many other reasons (great rates on car loans, mortgages, sometimes even school loans). I do 90% of my credit and banking with Credit Unions.

[City of Mills]

24. Almost never...

Ironically, I just logged into my CU account and my card rate just got 'jacked' on 2/20 from 7.0% to 8.5%. I haven't used the credit in at least six months and have a $0 balance, so I'm sure this is an across-the-board increase.

[ET Awful]

31. Your rate is almost always based on prime + x%

If the prime rate went up since they last reviewed your account, that would explain it.

1.5% is hardly a "ratejack". Commercial banks very often ratejack people from under 10% to close to 20% for no real reason. For example, Chase has been known to ratejack people from 8.9 to 19.99 for no reason other than a whim. (No, that's not a typo, that's an 11% increase).

A credit union won't do that.

1.5% isn't a "ratejack" it's a minor change.

[City of Mills]

38. I hear ya

That's why I threw 'jacked' in quotes...at 8.5%, that line of credit is still a downright bargain as compared to my other bank-issued credit cards where my next best rate is 14.99% I love credit unions!

[RebelOne]

8. You did the right thing

Even Clark Howard, the consumer guru, recommends that you close your account. Check out his Web site at www.clarkhoward.com.

[sendero]

11. Worrying about the impact on your credit..

... score would be a really bad reason to keep an account open. I'm pretty sure the impact is minimal and very temporary. You did the right thing.

People have to vote with their feet, that is the only thing that is going to change these assholes.

[ThomWV]

12. Who on earth told you it was a good idea to keep a bad card?

Stick it in a drawer and don't use it but accept the higher rate because somehow its good for your credit rating? What a load of horseshit. First off unused credit - open space on your existing cards - is a credit liability, they downgrade your credit if they have given you a lot of it because they fear you might be damned fool enough to use it. I know, its hard to understand.

Cut that fucker in half and burn the halves. Pay the fucking things off at the old rate. To start a savings account in a nice small local Credit Union and after you've had it a while apply for a card with the Credit Union with them. The rate won't kill you and they will not jack you around with predatory billing practices.

[ET Awful]

14. Actually, you're wrong. . .

Unused credit does improve your credit rating, as anyone who has actually researched the matter can tell you.

30% of your credit score (approximately) is based on utilization of existing credit. Utilization is calculated based on revolving accounts. It is the ratio of available credit to amount of credit utilized. The more you have available and unused, the better your score will be.

There is never a reason to close an unused account unless (a) it has an annual fee; or (b) you don't want to do business with that particular entity any longer (which was why I closed 3 different accounts with HSBC).

They do NOT downgrade your credit for open space. I suggest you do some actual reasearch on how FICO scores are calculated. A good start is creditboards.com

For example:

http://masteryourcard.com/blog/2008/03/07/everything-you-wanted-to-know-about-fico-scores/

"For obvious reasons, the exact formula Fair Isaac Corporation (FICO) uses to calculate your score is a closely guarded secret. Having said that, we do know the general formula. The variables used to calculate your score, as well as their approximate weighting are:

* 35% is based on your payment history. Being late on payments in the past makes creditors nervous. Note, however, that this only includes payments later than 30 days past due

* 30% is based on your credit utilization. Your utilization is calculated simply by dividing your current balance by your credit limit. For example, if your current balance was $500 and you had a credit limit of $2000, your utilization would be 500/2000 = 0.25 = 25% utilization.

* 15% is based on the length of your credit history. Lenders believe you are higher risk if you’re inexperienced.

* 10% is based on the types of credit used (e.g. installment loans, mortgages, credit cards and so on). Generally speaking, a mixture of different types of credit will increase your score.

* And the remaining 10% is based on how much attention your credit report has received lately. How many new credit accounts you’ve opened recently, how long it’s been since you opened a new credit account, how many requests you’ve made for credit recently, and crucially, how long its been since lenders have requested credit information on you."

--------------------

If you have a combined total of . . . say $25,000 in available credit, and you have a balance on . . . let's say some appliances and furniture you bought last year of $5,000 and other balances of say $2,500 (remember that if you don't pay before your statement cuts, your monthly balance will most likely be reported to the agencies, regardless of whether you pay in full every month or not).

So, based on that, you have used 30% of your available credit. This would have a minimal but noticeable impact on your FICO score. However, if you closed an account that had no balance but an available limit of $10,000, you would be reducing your available credit to $15,000 and increasing your utilization to 50%. This would cause a significant drop in your FICO score.

Remember that nearly 1/3rd of your FICO score is based on utilization of existing credit. As far as FICO scoring goes, it is much better to have available unused credit than to have very little credit available. In essence, the more credit you have available but unused, the higher your score will be.

[ThomWV]

16. I may be wrong but I cut my cards up and owe nothing today - so is it so bad to be wrong?

Which of us is better off, me with an income and no debt or someone with a high interest card stuck in a drawer that they are paying on but fear to use?


Bwahahahahahahaha. Now, go ahead and be right all day long if you like.

[ET Awful]

17. Ummmm . . .

If they "fear to use" the card, it most likely has no balance and they aren't paying anything on it.

Did you know that if you use no credit for 10 years, you will no longer have a FICO score which will render you unable to obtain credit for any reason at all? FICO only tracks history for 10 years in most cases (for positive accounts, 7 years for negative accounts, and the time varies for things like tax liens, etc.).

You're going on the mistaken assumption that credit=debt. That's not the case at all.

It is far better to have available credit that you don't use that to have no credit available at all.

It's easier to obtain credit when you don't need it than when you do. I'd rather have my credit availability high so if I encounter a crisis, I have it as a buffer.

If I'm stranded in another city due to weather, I can get a hotel room easily. Not so for someone with no credit. If my car is in the shop, I can rent another, not so for someone without credit. If I buy something, it has an automatic extended warranty and several protections not available to you who pay cash.

Debt and credit are not the same thing.

Having no debt is one thing, having no credit is another. I'd rather be in my position with very little debt and a lot of available credit to use in an emergency (such as my recent vet bills for the dog that totalled $5,000 plus).

If you had to cut your cards up to eliminate your debt, that shows irresponsibility and poor self control on your part. It's not the cards fault you had to cut it up to avoid using it.

[high density]

20. Come on... read the post you're commenting on.

An unused credit line lowers your total utilization which increases your credit score. Nobody is forcing people to carry a balance on the cards.

[madokie]

13. I'm not sure how all this works

but we've never had a card and we get credit anytime we want it. Of course the two banks we use are locally owned with the major stockholders living in our community. We have a couple debit cards on accounts set up just for that that we use for on line purchases or cash when we need it etc. I never have understood why someone would want a credit card even when they know that the card companies are going to take advantage of them every chance they get. I just flat ass don't get it, too dumb I guess for my own good :-) huh

[trof]

21. OK, here's why I use a credit card: $$$$$

1. My Discover card charges no annual fee.

2. I don't care what the interest rate is because I pay it off, in full, EVERY month. And I pay it off online by authorizing a money transfer from my checking account.

3. The Sweet Spot: I get 5% cash back on the first $1500 worth of gasoline I buy each year. I get 1% cash back on everything else I use the card for. And I use it for everything I possibly can. Even monthly utility bills, phone bills, cellphone bills, insurance premiums. If a company I deal with will accept credit cards as payment, that's what I do. I wish I could make mortgage payments with it, but Wells Fargo won't do that.

4. The Little Sweet Spot: Miz t. doesn't have to write all those checks every month and we save a fair amount on postage.

That's how it works for me, anyway.
:-)

[madokie]

22. Cool, in that case I may want to rethink my position.

I had no idea about any of that and it will be taken into account. Thanks
:hi:

[City of Mills]

23. Good advice

You can make credit cards work for you, the key is to pay off your balance every month - you will not have to pay interest charges, and cards that offer cash back incentives can actually save you money. Also, you will be building a rock solid credit history - my ex-wife began doing this two years ago after we separated to build her own credit history. Put everything on her credit card, and paid it off at the end of the month. Just a couple of weeks ago she went to a bank for a mortgage preapproval, despite being nervous about her credit score. Turned out her score was over 830. She was 'afraid' to check her credit score herself, as it turned out she really had nothing to worry about!

[madokie]

26. That is cool, thanks

Amazing what one can learn by sometimes saying the most asinine of things, huh. You all have made my day. :hi:

I might add: if you see me tomorow I might have a big ass black eye or somthing after I tell my wife my new found wisdom, oh and, if you do try not to make a big deal of it ok. :-)

[City of Mills]

27. Hey, no problem

The credit system isn't exactly 'intuitive', my wife got the tip from her economics teacher when they had a class discussing credit and proper use of credit lines, before that her opinion (and mine as well) was to avoid credit cards like the plague.

The teacher said no, and in fact you should avoid debit cards like the plague, because if you purchase goods on credit and pay at the end of the month, you pay no fees. In the meantime, the money in your checking account can be transferred to a savings account instead and be earning interest during that month.

And he was right! It turns out use of debit cards can be considered poor money management. Like I said, not intuitive but true nonetheless! Key is to pay those credit cards off each month, to the penny.

[madokie]

28. Thats us

Where applicable we use direct withdrawal so its alway on time. I know that with a card that wouldn't be possible but then again it may be an option at our bank.
again, thanks for putting this in such a way as to make me stop and think about what I was thinking, what I was doing.
I like enlightening days :-)

[FlyingSquirrel]

34. Now THAT is good advice. Never heard it before but it makes sense.

[trof]

33. Happy to help. Every little bit counts these days.

[madokie]

35. Yes thats so true

and thanks for helping me on this. I'll be trying to get my wife to read what you all are saying.

[Raineyb]

36. That's how I work it.

I use my CC to pay for food, gas, whatever and at the end of the week I pay off the week's expenses. I do this online so I use no stamps and I get cash back.

Of course you know the CC companies call people like us deadbeats. :crazy:

Regards

[Fla_Democrat]

37. Watch for 'convenience fees'.

Went to pay my property taxes, and thought "hey, 2% cash back", what a deal. Only thing, the county wanted to charge a 4% fee for using a credit card. May be a government thing, but never hurts to check if there's any added fees for using a credit card. (or asking if they will give a cash discount) :think:

[SmileyRose]

25. You'll take a 5-10 point hit for about 6 months. Whoopdidoo.

For all but a few souls that's not even worth getting all worked up about.

[SOS]

29. Good job

When they rate jack, call them, disagree with the new "terms" and close it out at the old rate.
Maybe when the vampires lose a million good customers, they'll stop jerking us around.

[librechik]

30. Watch them like a hawk--they can re-open your account without telling you!

say for instance you forgot that a payment was coming through when you closed the account. When they get that charge, they will automatically re-open your account so as not to bounce the payment.

Months go by, you thought you had closed the account--then you realize they have been charging you late fees for each month you didn't pay that little charge!

That happened to me when my son used an old charge card of mine to buy a $3 music download from iTunes.
I unknowingly racked up about a hundred dollars in $28 finance charges before I realized what had happened. (Becasue I thought I had closed the account i ignored the new mailings from Cap One, thinking they were just come-ons asking me to get another card with them. )

Shit!
They kicked and squirmed about refunding those finance charges, too--but eventually they did it.