A Credit Card Dilemma
I just came across an interesting credit card dilemma on Consumerist.com. A reader writes to say that she and her husband were trying to negotiate a lower rate on their credit card. Their rate had reached a whopping 28 percent. The card issuer, the reader said, offered them a 6 percent rate under its hardship program if they closed the card. But the reader was worried about how that would affect her credit score.
From covering the credit card industry, I know that your credit utilization ratio affects your credit score. That ratio tells you how much of your available credit you have used. If you have used a high percentage, then your credit score will drop. But the calculation of credit scores is tricky and depends on many factors. So how this particular consumer would be affected by closing down the card is hard to tell definitively. Still, it's an interesting case study.
Have any of you had similar deals proposed by your credit card companies? Please let us know.
Posted by: ls123 | August 3, 2009 12:56 PM | Report abuse
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