My Journey From Debt

I mentioned previously that I called the people through whom I have my one remaining credt card as a means to try and get some stuff taken care of. Well, I have had some unfortunate incidents recently, but hopefully this will be the last. Previously, my credit limit on my account that I refer to as Store Credit 1 was reduced from $2,000 to $300. This really irritated me because I have never been late on a payment and I always pay more than the minimum amount required. Also, I have never paid interest on my account there due to only using it to take advantage of their “No Interest, No Payments” offers and getting it paid off before the deadline.

However, during a “regular review of accounts” they looked at my credit report and decided I was not worthy of having that much credit with them. The lesser of the problems created by this is that, normally, when they have their special offers, it is on purchases of $500 or more. Now, I’m not saying I should be spending that kind of money right now, but with my current credit limit I couldn’t take advantage of one of these offers if I wanted to. Secondly, and more importantly, this creates a bit of a snowball effect as my current credit available to credit used ratio is made that much worse as well.

Anyway, back to the present situation. Credit Card 2 is my only credit card that I still have and as such I do use it on occasion and did so in the past month or two. Due to currently being so close to my credit limit, I always make sure that I have credit available before using the card in order to avoid going over my limit. Before making my last payment, I had well over $100 of credit available. I sent in my payment and went along my merry way. A situation came up where I needed to use my card to make a purchase and did so because I knew I had the funds available.

What happened next was that my payment did not get processed on time, instead, it was processed the day after it was due; the next chunk of interest was added on to my balance along with a late fee. These factors along with my purchase caused my account to go over my credit limit and I was then nailed with an over-limit fee and my interest rate was changed from my undesirable but acceptable 9.9% to something much higher (29.99% I think it was) because of these events.

Well, when I received my bill and noticed this I was not very happy. I did not feel that this was appropriate, especially considering that I knew I had sent in my payment on time. When I called the customer service number, the agent I spoke to was understanding and helpful and was able to remove the late fee as well as half of the over-limit fee (or perhaps it was the other way around I don’t remember for sure) which I felt was an acceptable solution simply because the whole situation could have possibly been avoided if I had mailed my payment a couple days earlier.

Unfortunately, the representative that I spoke with was not able to do anything to help me with the change in interest rates and had to connect me with someone in a different department. After waiting on hold for quite some time, I spoke with a guy who said he would look in to it for me. What he ended up doing was reviewing my account (and looking at my credit report/rating) and determining that I would be stuck with the higher interest rate for 6 months. While it doesn’t seem like a very long time, it is quite insane to think of how much extra money this whole ordeal is going to cost me just in the increase in interest rates multiplied by my current balance and then by 6 months, it’s ridiculous! Anyway, that wasn’t the end of the bad news.

Apparently, due to what he saw in my credit report (I don’t doubt that my previous experience with that Store Credit account had some effect on this) and my current situations, it was determined that my account should be suspended. So, now I am not only paying a much higher interest rate, I temporarily do not have access to any “available credit” on this card. The only light at the end of this tunnel is that, like the interest rates, after 6 months of making my payments on time and such the account will come out of suspension. The interest rates will (supposedly) drop back to their previous rate automatically. I think I might have to call them and have them review it again to reactivate the account, but at the very least, I should be able to get the account reactivated.

There was one other thing I talked to him about that he was at least able to be the “nice guy” and take care of for me. When this whole situation took place, it was very close to the due date and my current balances in my accounts were not high enough for me to make this now much higher than normal payment. I asked him if there was any way that I could get a one-time extension on my due date so that I would be able to wait until payday to make the required payment. What he was able to do for me was set-up an electronic check from my checking account to make my credit card payment and schedule it for payday as well as waiving both the late-payment fee that I would be sure to get as well as their regular electronic check/pay by phone fee that I would have otherwise had to pay.

All things considered, I guess it could have been worse, I’ll just have to suffer with this insane interest rate for the next few months and focus on making progress on this account to get the balance down so that the interest rate will not be as huge of a deal.