Last week I posted about how Discover raised my rates and I didn't catch it for several months. I went through four scenarios of what I'd thought we could do about getting rid of the debt on that card, and I set up a poll asking for my readers to vote on what I should do. 10 people voted, and nine of those voted to pay $703 immediately and $209 a month for six months.
There were also a lot of good comments, and FinEngr asked where my fifth scenario was – the one to call Discover and ask them to lower my rate. That made sense, so I put in a call to Discover and asked them why my rates were raised. I was told since Discover is now prohibited by law from “rewarding” customers who have high credit scores, or “punishing” customers with low credit scores that they had to adjust rates across all their customers. I asked them when the law went into effect, and she said January. So I guess the rate going up in December was the January invoice.
I asked about having my rates lowered, and she said she could transfer me to someone I could ask about that. I was transferred to a different person, this time a man. He said he could sure look into that for me, and his best offer was to give me a six month limited offer of 3.9% for purchases.
Well, I won't be using the card to purchase anything, but I told him to go ahead and give me the rate.
I made a payment of $710, and plan to make my first $209 payment around April 15th, and plan to make a payment of at least $209 for the next six months. I anticipate having this card paid off by the end of September.
Thanks for all my readers who commented and thanks for the great advice: Melissa, Stay at Home Mom CFO, Kathryn, Simple in France, Saving Money Today, Engineer Your Finances, and special thanks for Mrs. Frugal over at Cool to be Frugal for including my original post in the Yakezie Challenge Carnival #5.
UPDATE: If you are interested in how we've done so far, click here to read Update on the Discovery Card Debt Reduction Plan posted on May 22nd, 2010.
Wow! I cannot believe they won’t change the rates anymore. Back in the day when I had credit card debt, I was able to get the 0% on transfers for six months on one card and then the same deal on the other six months later. But those were back in the wild days when my credit limit was also the same as my yearly income. I really don’t trust credit cards. . .
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Sounds like you have a good plan for getting it paid off. Sometimes a jump in interest rates like that can be the kick we need to get rid of the debt. The same thing happened to me when my student loan rate jumped. I got that thing paid off in 4 months after years of it hanging around.
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amazing what a simple phone call can do!
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At least you now have a plan to pay the card off. Credit card companies are really sneaky and are only look out for themselves. I will be interested to see what credit card companies will do if customers begin using their cards less, paying off their balances, and then not using their services. I wonder if credit card companies may someday have to plead with their customers to use them 😉
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