Do credit cards ever lower interest rates? And other ??'s

[Deleted]

PDQ


I have several credit cards and 2 small loans that I'm looking to consolidate to pay off quicker. I got approved for a loan to pay off everything. The term is 36 months. If I just kept paying the minimums, it would take approximately 44 months to pay everything off. That 8 months and improved interest rate is going to save us about $4K in interest.

Obviously the loans will close when they are paid in full, but I'm trying to decide what to do about the credit cards. The lowest interest rate is 19.9% which I realize is absolutely horrible. There are a total of 4 credit cards being paid off. Should I close them? I don't plan to use them but am worried about the hit to my credit score.  In addition to the cards being paid off with this loan, I also have a card that we use for groceries/gas/etc and pay off every month; it's a rewards card and we're trying to build up our points. That card also has an atrocious interest rate, but like I said, we never carry a balance on that one. Any chance that that bank would ever consider lowering the interest rate or is that just not something that they do? 

If it matters, we are currently dumping all of our extra money in to H's credit cards and have just been paying the minimums on mine. With this loan, we'll end up with everything paid off in 3 years, probably closer to 2.5 years.

[madringal]

Couple of things - closing the cards will give you a hit to your credit. But unless you are buying a home or a new car in the next year, I wouldn't worry about it. Your credit will recover.

If you don't want to close your cards, you can always call and lower the available limits if that feels "safer".

But to answer your actual questions, yes, they might lower your interest rate if you call them and ask - but it doesn't sound like you'll be using them so I am not sure it actually matters.

[wildrice]

Do you want to get into credit card debt again after you pay them off? Because if you don't, it doesn't really matter. Your best bet is to pay them off and then build up savings to cover the sorts of things that would end up on a CC accruing interest.

I do get mailings from time to time offering me a lower interest rate on purchases or balance transfers, but they are usually for a defined period of time (6-18 months) and not a permanent lower rate. I think around 20% is pretty common these days so I wouldn't base my decision on that.

If you don't plan to use them, I'd just close them. It doesn't make a significant difference in your credit score. If you plan to make a big purchase soon, I might wait until after you're done with that, but otherwise it's not worth keeping them open.

[puppylove64]

Wait you want to lower the rate on cards that have a high balance your are working to pay off? You can call and request a lower rate, but I don’t see them agreeing if they are making lots of money off you every month. I would look for a new credit card With a 0% offer and low balance transfer rate and move the high balance. Try to pay it off in the promotional period and make sure the interest doesn’t accrued from the beginning and you miss the deadline so you get a ballon interest amount at the end

[shauni27]

Jul 30, 2019 20:16:54 GMT -5 puppylove64 said:

Wait you want to lower the rate on cards that have a high balance your are working to pay off? You can call and request a lower rate, but I don’t see them agreeing if they are making lots of money off you every month. I would look for a new credit card With a 0% offer and low balance transfer rate and move the high balance. Try to pay it off in the promotional period and make sure the interest doesn’t accrued from the beginning and you miss the deadline so you get a ballon interest amount at the end

sorry to hijack this thread, but  I am really dumb when it comes to money stuff.

We have about $5500 on my credit card that I pay the minimum on each month. Interest is 12.5%. 

Would it make sense to transfer all of that to another credit card with 0% interest for a period of time and then work on paying that off instead? How long are those promotional periods usually? And when someone says "transfer your current balance to another card" you simply mean you pay off one credit card with another, 0% interest one, yeah?

Sorry for the stupid questions :/

[Cappy]

Aug 6, 2019 10:13:14 GMT -5 shauni27 said:

Jul 30, 2019 20:16:54 GMT -5 puppylove64 said:

Wait you want to lower the rate on cards that have a high balance your are working to pay off? You can call and request a lower rate, but I don’t see them agreeing if they are making lots of money off you every month. I would look for a new credit card With a 0% offer and low balance transfer rate and move the high balance. Try to pay it off in the promotional period and make sure the interest doesn’t accrued from the beginning and you miss the deadline so you get a ballon interest amount at the end

sorry to hijack this thread, but  I am really dumb when it comes to money stuff.

We have about $5500 on my credit card that I pay the minimum on each month. Interest is 12.5%. 

Would it make sense to transfer all of that to another credit card with 0% interest for a period of time and then work on paying that off instead? How long are those promotional periods usually? And when someone says "transfer your current balance to another card" you simply mean you pay off one credit card with another, 0% interest one, yeah?

Sorry for the stupid questions :/

Usually the promo periods are for 6 months or a year then the rate jumps to like 25% or something so you have to be diligent and have a strong plan or you will burn yourself. You also need to ensure that the 0% is for both purchases AND balance transfers and that there are not balance transfer fees. All of the small print matters. That said, this is how I paid off over 10k in IRS debt I discovered when I married my husband (who moved to Japan to work and failed to file US taxes for 3 years UGH ). All of that was pre-financial crisis so I have no idea what the climate is like for this these days. My credit score has always been in the mid-high 700s.  I suspect there are some Reddit boards with others using this method to get out of debt who could tell you more.