Playing with snakes, how hard to bite back?

[myrdale]

I've had an in-store credit card with The HomeDepot for probably two years now. I got this credit card out of curiosity to see how well I could build up my credit score. I wanted to see how credit cards worked.

Well, I have heard Dave Ramsey mention several times about how having a credit card, even just as a convenious is the same as playing with snakes. No matter how careful you are you will be bit! As much of a fan as I am, surely this would never apply to me.

While checking my bank statements against my receipts this evening, I looked over my HomeDepot account statement, and noticed at the bottom my interest rate was 22.99%. I scratched my head and thought that was a bit high but went on my way.

Later it came back and started urking me real good, so I dug out my previous statements, and low and behold they have jacked my interest rate from 21.00% to 22.99%. It seems it was raised in May.

Now I run a bill of up to about $200 every month on average. But I always pay my balance in full, long before it is due.

I understand they are well within their rights to raise my rate. Even though it will have no significant finicial effect on me, it really pisses me off.

This coming week I plan on calling and asking that it be lowered. I will stress what a punctual and responsable customer I am. And I have a decient credit score. But how much should I shoot for? I do not intend to accept any interest rate higher than 20%. How far can I reasonable go though? 15%? 10%?

Please share any advice or secrets of success you guys have had. I'd love to get some insight into handling these vipers.

[jIM_Ohio]

My credit cards show similar rates if I were to carry a balance and I have a credit score in mid 700's.

I would spend time trying to improve financial life in other ways.

[disneysteve]

Originally Posted by myrdale

I have heard Dave Ramsey mention several times about how having a credit card, even just as a convenious is the same as playing with snakes. No matter how careful you are you will be bit!

I totally disagree with that statement. You only get bit if you don't follow the rules, and that isn't the credit card company's fault, it is yours (generic "you").

I've had a credit card for 26 years now and have never been "bit".

As for the interest rate on your card, if you pay the balance in full each month, as all CC users should, what difference does it make? I have no idea what the rates are on my cards. The rate could be 5% or it could be 50% or 500%. It wouldn't matter a bit because I never carry a balance.

[atomicrc11]

I agree with Steve. If you're paying off your balance every month, what does it matter?

[DebtFreeMe2]

Would you do business with me please?

Oh just so you're aware, I reserve the right to change our contract at any time I feel necessary, for an reason I wish to change it, regardless of whether you’re a good client or not, and I'll only charge 0% for the next 3 hours and just 15% thereafter.

What, you won't do business with me??? Well guess what, that is the contract you have with credit cards. My advice is too cancel them and pay cash.

If you have a business that makes more on your money then they charge, then keep using them. If you're not making 22% on your money, find another source of funding to carry you through the month.

Of course you can keep playing with snakes and set up systems to do everything right, but slip and you will pay for it.

Just my thoughts on it.

Of course God puts it a little better, "The borrower is slave to the lender." (Proverbs 22:7)

Good luck and God be with you on this one,

DebtFreeMe2

[mrpaseo]

Well, if you have a Visa or MC I ask why do you need a store brand card? If you do not have one, apply for one. I agree that it is you that will screw up a good thing with cc's (You is generic). If you do not carry a balance then no problem. If you plan on calling I would not accept anything above 9.99% fixed (MY rule).

Point of note, a cc should be used ONLY as a means to spend money you currently have, NOT tomorrows dollars. This is the mistake that many make, they use the cc knowing they will receive a check in the future and they carry a balance knowing this... then something happens, either the job goes away, some sort of financial distress or they just charge to much and get in over their head. Remember, a cc is a tool to spend yesterdays and todays money, NOT tomorrows dollars (Money you will make in the future).

If you practice this rule, you should never have problems with ccs. Two more quick notes, I currently have two zero percent interest cards with over 19,000 charged on them... I also have 19,000 dollars sitting in a savings account waiting for the 0% to run out. This is sort of a game that we play to earn a little interest, the cc companies know about it and they are hoping you and I will screw up and carry a balance. As a matter of fact (Second point) it happened to me once, in eight years I carried a balance over 1 month and had to pay 18.50 in interest... no problem though because I pulled 650 in rewards before they got their 18.50... Looks like I won that game...

And the games continue, remember, stay on top of your finances, use cc's correctly, use them as a tool.

Ray

[myrdale]

Originally Posted by disneysteve

I totally disagree with that statement. You only get bit if you don't follow the rules, and that isn't the credit card company's fault, it is yours (generic "you").

As for the interest rate on your card, if you pay the balance in full each month, as all CC users should, what difference does it make? I have no idea what the rates are on my cards. The rate could be 5% or it could be 50% or 500%. It wouldn't matter a bit because I never carry a balance.

I totally agree with you. Maybe being "bit" was a bit strong of a term to use. But the simple fact is I have always paid the bill in full, and the check clears long before the due date (aka I have never paid late).

Like you and I both said, the interest rate will have no effect on me. It could have been 500% and I wouldn't loose a dime because I do pay in full every month.

I actually just got off of the phone with the HD's credit center. It seems the rate increase applied to everyone across the board. They claim they sent out notices, but I can not say I ever saw one. The girl said she could not lower my rate, that everyone has the same rate. They are sending me another copy of the terms.

So even if you play by the rules, they can change things up on you at anytime they please.

[disneysteve]

Originally Posted by DebtFreeMe2

Would you do business with me please?

Oh just so you're aware, I reserve the right to change our contract at any time I feel necessary, for an reason I wish to change it, regardless of whether you’re a good client or not, and I'll only charge 0% for the next 3 hours and just 15% thereafter.

You are leaving out the most important part of that contract. If I pay my bill in full and on time, none of those other terms apply to me at all. Until that changes, yes, I will continue to do business with the credit card companies. Unless they start charging me for the service, I don't care what bizarre rules and regulations and fees they list. None of them affect me.

[cschin4]

I had this discussion with MasterCard. I pay my balance in full every month. My rate was low but it really didn't matter what it was because I pay it off. However, they continually raised the interest rate. At first I ignored it, then thought that if I ever get into a bind, become ill, etc then why should they be able to charge me the maximum interest rate? So, I called them and asked them to lower the CC rate of interest. Their response was "why, you pay it off every month". And, my response was that since I have good credit you should be giving me a better rate and that even though I pay it off, if something should happen to me, then why should I get socked? So, after a bit of back and forth, they lowered the rate.
So, anyway, my advice to those who pay it off in full is that this is something to think about. YOU could get injured and wind up in the hospital and miss your payment so why even give them the opportunity to cash in if you have good credit?
As for "building your credit", I personally think that is just so much BS to entice people. You don't need to "build your credit". You simply need to spend less than you make and pay your bills on time. Then, you will have all the "good credit" you need. I have one and only one CC and that is all I want. I absolutely refuse to open any more and I don't care if i get 15% off or whatever they try to toss at you to get you to open a store card. I don't want it.

[disneysteve]

Originally Posted by myrdale

So even if you play by the rules, they can change things up on you at anytime they please.

Yes, but as long as you pay your bill in full and on time, the rule changes don't affect you.

By the way, you mentioned your check clearing. I hope you aren't paying your CC bills by mailing in a paper check. That's asking for trouble. Start paying electronically either at the CC company's website or through your online banking. That eliminates the possibility of them claiming they didn't receive it on time.

[ActYourWage]

Originally Posted by DebtFreeMe2

Would you do business with me please?

Oh just so you're aware, I reserve the right to change our contract at any time I feel necessary, for an reason I wish to change it, regardless of whether you’re a good client or not, and I'll only charge 0% for the next 3 hours and just 15% thereafter.

What, you won't do business with me??? Well guess what, that is the contract you have with credit cards. My advice is too cancel them and pay cash.

If you have a business that makes more on your money then they charge, then keep using them. If you're not making 22% on your money, find another source of funding to carry you through the month.

Of course you can keep playing with snakes and set up systems to do everything right, but slip and you will pay for it.

Just my thoughts on it.

Of course God puts it a little better, "The borrower is slave to the lender." (Proverbs 22:7)

Good luck and God be with you on this one,

DebtFreeMe2

Nice post. CCs will bit most people. Most people cannot handle them, hence the boat load of debt a lot of people have with CCs. I wonder how many wealthy (by that I mean millionaires) use CC reward points to earn their money. It seems it would be easier to go out and earn that $950 "bonus" cash by doing a couple of 1 week part-time projects of some sort.

[simpleyme]

((((((it really pisses me off.

This coming week I plan on calling and asking that it be lowered. I will stress what a punctual and responsible customer I am. And I have a decent credit score. But how much should I shoot for? I do not intend to accept any interest rate higher than 20%. How far can I reasonable go though? 15%? 10%?

.[/quote])))))0

I am with you on this one i carry no balance so when i called Discover and asked them to lower my rate and they say it does not matter what the rate is since you do not carry a balance anyway,

I said yes that's my point exactly! I does not matter so lower it , so if it does not mater and I should not care nor should they why not lower it? it will not cost them anything every will it?
I got no where and just do not use the card i deserve better , they may not think so but I know so
Home depot is a citi card anyway get rid of it