Brian writes:

Hi Meghann, nice work on Consumerist. You all do a great job, and I enjoy the blog, read it a lot, and learn a lot from it. I thought I would run a situation/question by you and see if you all have any answers or know where to find them.

I follow all the sneaky stuff credit card companies do, like increasing your interest rate if you are late on another payment. A few weeks ago I got a letter that my balance had been doubled, even though I had never asked for it to be.

Last time I checked my credit rating, I had no late payments on anything, and my score was pretty good (700+ I believe). Anyhow, while paying bills last night I noticed that my credit card charges me 18% on newer charges, and 30+% on charges before Jan 2006!! 30%!! Highway robbery.

So I don’t know if you can answer any questions or point me in the right direction, but my questions as a consumer are:

1) What are my chances of getting the interest rates lowered if I call and threaten to cancel my account and transfer the balance to another card. I get dozens of credit card offers for much lower interest (in the short term) in the mail weekly.

2) Is it true that having a credit card for a long time helps your credit? I have had this card for 14+ years and would hate to cancel it and ding my credit.

3) If I open a new account to transfer the balance too and leave the original credit card active (but with no balance) will adding the new card ding my credit?

I am thinking if I got a card with 6% interest for 1 year, I could transfer the balance, and with the difference in interest rates, pay a huge chunk off vs what I would do paying the same amount on the older card. But at the same time, if I can threaten to pull my account from the original card and get a lower rate, I would rather do that.

Any pointers, tips, or thoughts?

Thanks,
Brian

Hi, Brian. Thanks for writing. Don’t worry, you concerns are not unusual. With so much importance places on your credit score, lots of people are in a panic not to disturb the beast. Thankfully, nothing you’re about to do should hurt your score that much.

Let’s answer your questions one at a time:

1) What are my chances of getting the interest rates lowered if I call and threaten to cancel my account and transfer the balance to another card. I get dozens of credit card offers for much lower interest (in the short term) in the mail weekly.

This depends entirely on your bank. The good news is, it doesn’t cost anything to try! What you’ll want to do first is research the best credit offers. There are several websites that help you do this! Armed with the knowledge of another bank’s offer—call your bank and ask them to match it. If they won’t, then they won’t, but you’ve lost nothing because your research for the next step is done.

2) Is it true that having a credit card for a long time helps your credit? I have had this card for 14+ years and would hate to cancel it and ding my credit.

Your credit score is broken up into several categories that are considered when calculating your score. One of them is length of credit history. So, yes. Closing this account would shorten your credit history. Thankfully, you don’t need to close it. You can leave it open and transfer your balance.

3) If I open a new account to transfer the balance too and leave the original credit card active (but with no balance) will adding the new card ding my credit?

Uh, sort of. New applications for credit have an impact on your score, but not a huge one. If, say, you go around applying for and getting denied from 12 credit cards a day—yeah, that’s bad. Simply opening a new card that you can afford? You’ll be fine.

So to sum up: Research the best offers available to you. Call your bank and ask them to match them. Act accordingly. Keep your old card open, but don’t run up another balance. Pay off your balance!

Sound like a plan? Good luck, Brian! Any suggestions for Brian in the comments? Have you been there? What did you do? —MEGHANN MARCO

BRIAN’S HOMEWORK: Easily Compare Best Credit Card Offers
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(Photo: Sam Wilkinson)

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