7 Jan
Credit Card Déjà Vu – Oh Yeah, That’s Why We Don’t Get Along
Last night I realized that with a $48k debt snowball, like a hostage situation, Stockholm syndrome eventually sets in.
We have become comfortable with our method, level of focus and debt-reduction. Yes, we have three debts left, but we are making steady progress and have a plan. Mechanically, the system has found a groove: income is earned, payments are made, debt goes down.
In a way, when you have gotten used to living on a budget and spending less than you make, you can buckle down, do the work and forget the “whys” of getting away from credit card companies.
Then they remind you.
Last night I received a statement for our largest debt. Usually I barely look at them, but the “minimum due” caught my eye right away. It has been the same for ages, but had been raised quite a bit!
“They raised our rate when I closed the account to new charges!”, I thought. Even though I specifically asked if closing the account would affect our rate at all. Paging down the statement, sure enough, our APR had gone from 16% to 23%. This is in addition to the rate increase of last October on our third largest debt.
I took a breath, grabbed the phone and waited on hold ready to uncork on whoever answered.
Of course, it wasn’t worth my time in the end. The rate increase was across the board, I was told, and had nothing to do with closing the account. There was no opt-ing out or reversing it. That’s just they way it is. Although they did offer us a personal loan at 18% instead which I declined.
My dislike for the credit industry is matched now only by my apathy for their business methodology.
Nonetheless, with our plummeting FICO score in hand (I think we’re at 680 now, via: creditkarma), I will try to get a lower interest rate personal loan from our local credit union or regional bank and move our business there.
I’m not sure it will be worth it, but as it stands now 63% of the payment to that card will go to interest this month. That change will extend our debt snowball by nearly four months and even a small fee would be worth paying to stay on track, I think.
Did I mention I applied at a Pizza joint to be a driver? Seriously. I’ll let you know how that goes.
In the mean time, thanks for the reminder, Wells Fargo. I hate you too.
the Dad
Posted by jpkittie on 01/07/10 at 4:40 pm
holy crap! hurry up credit card law changes! that is just absolutely crazy!
Posted by A.Marie on 01/08/10 at 5:21 am
I hate credit cards. I use them only when necessary and always make sure to pay them off at the end of the month. The whole credit card industry just makes me sick….
Posted by Stacie on 01/08/10 at 8:19 am
I really hope you get the Pizza driver job for the extra income. Remember it will only be temporary and you’ll get Wells Fargo out of your life.
Posted by Jeff on 01/08/10 at 11:52 am
@the Dad –I’m sorry to hear that you ran into this problem. It’s just one more reason to kick some major butt on your snowball. You are not alone in your adventure. There are many of us here to support you along the way. Maybe I can get a hold of the local pizza place that supplies WF with pizza and get them to charge a 23% delivery charge. Yeah, we can start a revolt. Ok, maybe not – but it sounded fun.
@everyone — I’m very happy that dad has taken the leap to look for a delivery job. It’s not a proud moment in anyones life so have to take on a second job — I know because I deliver on the side. It’s great money and he could really melt that snowball with the extra dough …
GOOD LUCK the Dad
Posted by Sharon on 01/09/10 at 10:22 am
Ugh. I wouldn’t be able to sleep trying to hold back my disdain for these companies….
I’m sure you can get a lower interest rate on a personal loan than 23%. Christine at Money Funk just consolidated her debt and is scheduled to pay off early and has lowered her payments. Worth a try anyway!
Posted by Murf on 01/09/10 at 7:45 pm
Bastards…across the board
Posted by Money Funk on 01/10/10 at 3:05 pm
Joining the ranks of pizza delivery drivers. Good for you.
We had the same notice from Wells Fargo. I thought it said that you can close your account to get away from the hike increase. My husband and I considered the option ourselves just to avoid the increase. So, it did not work? Hmmm….
We are on the hype to get rid of this card fast. Although not doing pizza deliveries, we are trying to sell our junk and take in some overtime.
Get rid of it pronto. Look forward to your progress.
By the way, I did just consolidate my debt with a personal loan obtained both from the credit union and Lending Club. Very happy with both. (Thanks for the shout out Sharon). Received 11.14% Lending Club and 12.9% with Credit union. I did save in the interest payments, but I am happier I am taking 9 months off the life of our debt.
Posted by debtmaven on 01/11/10 at 9:14 pm
Not surprising. This is the last hurrah for the credit card industry before the CARD legislation goes into effect next month in February. This is their last gasp for greedy rate hikes, etc, before they will be unable to do so.
I’m lucky that all my debt is in bank loans (at least those with interest). While I know no bank is on my side, I just made the choice to leave Wells Fargo (I have 5 accounts with them, checking/savings/business checking/personal loan/small business loan)! I am moving to a credit union for my personal banking and leaving all my debt with Wells Fargo. I hope that doesn’t adversely change my loan terms, but I wouldn’t put it past them.
Get out as soon as you can!!! They are evil and you’re doing great paying it off and getting a second job to make it go faster.
Posted by Mom2DeeNRee on 01/24/10 at 8:22 pm
eh…well not sure if this helps but check out Partners 1st credit union out of Ft. Wayne Indiana, I think they have really opened up enrollment allowances, anyhow…they offer a personal loan and right now it’s 9.5 fixed. Sure as heck beats 23% (How is that really legal?!?!) and it could give a little breathing room, PLUS it’s amortized straight out so you could even save some interest with your snowball rolling. FWIW
Posted by Bone on 02/16/10 at 9:08 pm
Wow, I’m so thankful I dumped Wells Fargo years ago! And good luck on the pizza delivery! If you remember, I had a BALL doing that job (not to mention all that free pizza I brought to the overnight parties!!)
Posted by sarah on 03/05/10 at 2:12 pm
I am loving your blog….we are on Baby Step #2, 1.5 debts away from being DEBT FREE!
I especially love how you compare living in debt to being a hostage and having the Stockholm Syndrome…made me laugh out loud.
I wish you much success in your debt-free journey.
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