Credit Card Interest Rate Increase from Underpaying
Author: Chrispy
Posted: Mon Jul 05, 2004 7:38 am
Post subject: Credit Card Interest Rate Increase from Underpaying
4/22/2002 0:29 am CDT
OK, a relative of mine has got himself into a mess. By paying late and under the minimum, their credit-card company (CCC) has jacked the interest rate up to 25%. (Yikes! I'm a monthly payer-offer so I had no idea they could go that high!)
Anyway, by the agreement, the CCC was well within it's rights to do this due to the card holder's mess ups. Even though he makes monthly payments (late and/or under the minimum), the account is technically in default. The agreement talked a lot about how the rates get raised but I didn's see any talk of lowering them. Supposing the holder starts paying at least the minimums and gets them in on time, will the CCC ever relent and drop the rate? How many months of good behavior are required to get out of the penalty box? Does calling the CCC do any good?
The CCC is MBNA.
Yea, I know that transfering to a low-rate card would be the best thing. He's looking into that too, of course, but the things that got his APR up to 25% in the first place makes it hard to get a new, low APR card.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Doug
Posted: Mon Jul 05, 2004 7:39 am
Post subject: Credit Card Interest Rate Increase from Underpaying
4/22/2002 1:29 am CDT
Your relative should try calling MBNA customer service and pose all of the questions you bring up to them.
If they don't want to lower the rate, on some sort of probationary period, then your relative should try to pay it down as quickly as possible. Go ahead and loan your relative the money... to pay it all off. Don't let them become a slave to the credit card industry.
Switch to cash and check.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Doug
Posted: Mon Jul 05, 2004 7:40 am
Post subject: Credit Card Interest Rate Increase from Underpaying
4/22/2002 1:32 am CDT
Your relative should try calling MBNA customer service and pose all of the questions you bring up to them.
If they don't want to lower the rate, on some sort of probationary period, then your relative should try to pay it down as quickly as possible. Go ahead and loan your relative the money... to pay it all off. Don't let them become a slave to the credit card industry.
Switch to cash and check.
Author: Misty
Posted: Mon Jul 05, 2004 7:40 am
Post subject: Credit Card Interest Rate Increase from Underpaying
4/22/2002 9:53 am CDT
I agree w/Doug when he says that MBNA should be contacted to find out about the apr. The card company that I work for will lower the apr back to what it was before the account defaulted after 7 consecutive on time payments have been made. But consecutive is the key word-if one payment is late, it starts all over again. And you're right when you say that it will be difficult for him to get another card w/the recent deliquency that's happened. He should also check w/them to see if they've closed the account. Most companies close the account if you miss 2 or more payments in a row or if the behavior on the account just gets too negative. This too would hurt him because it's going to report to the bureau as closed by the bank. The only way to fix that would be for him to qualify to have it reopened; which again is unlikely because of his recent negative behavior w/the account. Hope this helps!
Posted: Mon Jul 05, 2004 7:38 am
Post subject: Credit Card Interest Rate Increase from Underpaying
4/22/2002 0:29 am CDT
OK, a relative of mine has got himself into a mess. By paying late and under the minimum, their credit-card company (CCC) has jacked the interest rate up to 25%. (Yikes! I'm a monthly payer-offer so I had no idea they could go that high!)
Anyway, by the agreement, the CCC was well within it's rights to do this due to the card holder's mess ups. Even though he makes monthly payments (late and/or under the minimum), the account is technically in default. The agreement talked a lot about how the rates get raised but I didn's see any talk of lowering them. Supposing the holder starts paying at least the minimums and gets them in on time, will the CCC ever relent and drop the rate? How many months of good behavior are required to get out of the penalty box? Does calling the CCC do any good?
The CCC is MBNA.
Yea, I know that transfering to a low-rate card would be the best thing. He's looking into that too, of course, but the things that got his APR up to 25% in the first place makes it hard to get a new, low APR card.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Doug
Posted: Mon Jul 05, 2004 7:39 am
Post subject: Credit Card Interest Rate Increase from Underpaying
4/22/2002 1:29 am CDT
Your relative should try calling MBNA customer service and pose all of the questions you bring up to them.
If they don't want to lower the rate, on some sort of probationary period, then your relative should try to pay it down as quickly as possible. Go ahead and loan your relative the money... to pay it all off. Don't let them become a slave to the credit card industry.
Switch to cash and check.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Doug
Posted: Mon Jul 05, 2004 7:40 am
Post subject: Credit Card Interest Rate Increase from Underpaying
4/22/2002 1:32 am CDT
Your relative should try calling MBNA customer service and pose all of the questions you bring up to them.
If they don't want to lower the rate, on some sort of probationary period, then your relative should try to pay it down as quickly as possible. Go ahead and loan your relative the money... to pay it all off. Don't let them become a slave to the credit card industry.
Switch to cash and check.
Author: Misty
Posted: Mon Jul 05, 2004 7:40 am
Post subject: Credit Card Interest Rate Increase from Underpaying
4/22/2002 9:53 am CDT
I agree w/Doug when he says that MBNA should be contacted to find out about the apr. The card company that I work for will lower the apr back to what it was before the account defaulted after 7 consecutive on time payments have been made. But consecutive is the key word-if one payment is late, it starts all over again. And you're right when you say that it will be difficult for him to get another card w/the recent deliquency that's happened. He should also check w/them to see if they've closed the account. Most companies close the account if you miss 2 or more payments in a row or if the behavior on the account just gets too negative. This too would hurt him because it's going to report to the bureau as closed by the bank. The only way to fix that would be for him to qualify to have it reopened; which again is unlikely because of his recent negative behavior w/the account. Hope this helps!
posted by CardRatings.com at 10:58 AM
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