Tuesday, March 31, 2009

Bank of America Credit Card

Last week I received a letter stating that my credit limit would be reduced by $400 for going over one of my other cards limits.I know! I know! I have too many credit cards. I looked at my free credit report, courtesy of Experian for the negative action against me. My credit report was the same as always. All accounts were current and stated "never late, pays as agreed". With a closer look, I found that my Orchard Bank card had gone over the credit limit by less than a hundred dollars because of an issue with their accepting a payment on time(of course I was near the limit). I had called them as soon as I saw it and I called the company. The rep with customer service took the late charge off. I then made a payment with her and I promptly closed my account. I had that account for several years and they never increased my limit or cut my interest rate at all. But even in my credit report now it still shows as pays as agreed and never late because I didn't go no where close to 30 days late. A few days at most! But on my report it shows your highest balance and your credit limit. I guess this is where Bank of America got its grounds to decrease my limit.

Well I was a little mad at first. I have been working on my credit for a while now. I know that as long as you are not using the card, the more you have available credit, the better your credit score usually will be. I haven't used any of my B of America credit cards in a while. I cut them up over a year ago. Several months back they had sent me letters for my 3 cards stating that if I didn't respond back to them in a certain amount of time, they would raise my interest rates. My rates were already hovering around 15%. I thought enough is enough, and I sent three letters stating that I didn't agree with a rate hike--I have never done anything like this before! In fairness to B of A, I think it was the first time a letter was sent that was written large enough to know that a rate hike was coming.They said the rate would stay the same as long as I didn't use the cards again. So they are still open!

This brings me to a new issue that I had thought about posting about before. I am still unemployed, since the beginning of December . I need advice! I have worked so long and hard on building up my credit. However if you looked at my debt, you could see that I am pretty much to my limit on every card. I have a decent credit score, I just need income. Then I would be able to start paying them off again rather than using them to live on. My girlfriend's income is helping us to get by right now. Right now there is no debt snowball, we just pay the minimum! My girlfriend's credit is better than mine now. I helped establish her credit and we would continue to pay on her two cards. Well here is the question. Should I stop paying on my cards? I know the first step should be to call all of the credit card companies and see if they will work with me. I'm pretty sure they will laugh when I ask for 3 to 6 months of a deferment of payments. I have seen Dave Ramsey answer many questions telling the caller that they need to pay their rent or mortgage first and the utilities and worry about putting food on the table. Its still hard to "let go" of paying on the cards, because of ruining the infamous credit score. How will I ever buy a house? Dave says you don't need a score to buy a house. Basically he claims that cash is king! I do agree that it would be great to live only on cash. How many years will that take? I don't have a TV show, or have anyone to fall back on. Dave doesn't say not to ever pay them back, but to start when you can. I don't see us living on cash alone for a while. Plus about that credit score--they will ruin your credit for seven years. Usually seven years from your last activity--so if you pay them back in 3 years, you can still count on your credit being bad for seven years past that date. If you don't pay in full, you can guarantee that they will keep recycling your debt around way past that seven years to different creditors. All in an attempt to reclaim that original debt. It's all a mess I put myself in! What should I do??

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