Next Step Advice - Possible Credit chasing?

[Ellieflowers]

Hello friends and strangers

I'm rather anxious as I've never been through this before, usually I wouldn't ask in public but It's all I can think of and would appreciate any advice.

I'm worried about being credit chased by Chase and stuck in a horrible loop where as I pay down my card, they'll keep lowering it which will keep raising how much debt it looks like I have compared to how much I've not used on other cards.

I went through a terrible past almost year where I was let go from my good job and to survive and take care of family as im the single household earner =/ and had some medical emergencies and unplanned things, I made the mistake of letting my main two credit cards go above 70% utilization while I looked for a new job and now finally found one.

I usually like to keep things paid down to only have 10% utilization or under but things just were not good. Now that I have a good job I was going to start working on paying everything down again.

- In January American Express contacted me and said unless I pay them $5000, they will lower the credit limit to just above what I owe which at the time was $35,000, so I paid them that and have been paying down the card agressively with my last few pay checks.

- Chase was what I was going to be working on next, I was going to try to get both American express and Chase below 70% then divide my payments between them but this new lowering shocked me. They cut my main Chase from 35,000 to just above what I owe at $30,000 and they cut my hotel card I use for travel for work and usually pay off the same month or next month in full from $25,000 to $500.

Cards:

• American Express: $31,000 out of $40,000
• Chase: $29,000 out of $30,000 (it used to be $35,000 they just reduced it)
• Chase Hotel card: $0 out of $500 (It used to be $25,000, they just reduced it)
• BOA Card: $7000 out of $15000

I have a FICO of 741 right now and I think my credit rating is 724 as it tanked a bit, it used to be 820 but I am trying to work on it . I am pretty sure this will go down even more now even though I'll be paying things off.

 I am kinda frightened at this point such a drastic reduction on the Chase hotel card could wreck some kind of ratio and then it will end up in a loop where things keep getting lowered as I pay off and it keeps that ratio high. I just learned of what credit chasing is today by reading these forums.

What should I do?

I thought of the folllowing things:

- Open another credit card and do a balance transfer and keep paying things down and do not use them except for essentials, another credit card would raise the ceiling on some ratios of available credit vs debt I have I think?

- Take out a debt consolidation loan somewhere and do a massive payment on both the american and chase cards then use the likely half as much APR / Interest rate on the loan to pay it off faster than I could with the credit cards

- Tough it out and keep paying and see what happens

- Something else someone else maybe has advice on

Thanks I really appreciate even a nudge in the right direction

[Ellieflowers]

Oh! I forgot , I've never missed a credit or loan payment.

[Traveler101]

Sorry to see your struggles. I know how life can throw a curve at any time. Regrettably, once balance chasing starts, it generally continues. You have work now, and remember, credit limits can always be replaced. First and foremost is getting your finances to a manageable level. 

May I suggest calling chase, explain your circumstances and see if they won't drastically reduce your interest charges or possibly even eliminate them as you get this paid down. That may be a better alternative than paying intrest again to another lender and get this paid down faster. It's worth a shot.

I'm hoping that someone chimes in and can give you other recommendations as well. Good luck to you. You will make it through this.

[Ellieflowers]

Thanks Traveler101 for the kind words, I appreciate it Haha, it was many curves within a year it did not stop until a few months ago. So it's a shame kinda when I can get ahold of things and have positive cashflow again, if things had stayed the same I'd have paid it off in a reasonable amount of time.

I hope it doesn't hurt me long term once I get everything in good order again.

That's worrying that once chasing starts it continues.  It's a shame if it does because I'm out of the period that caused me to even get in this situation now, but if I'm chased then it will continually put me into a bad spot no matter what I do for a year or so I'd think or more. That reduction of over $25,000 hurt big time I think.

I did try calling chase, they said that I have 60 days to challenge the change to credit decision and have them reconsider, but as of now if I challenged it this moment, they'd just make the same decision.

I asked if in 30 days if I paid it down 2-5k more they might reconsider and they very clearly said they cannot give advice or that it would even help and it sounded kind of not very hopeful at all.

[Aim_High]

Welcome to My FICO Forums, @Ellieflowers.    

Been there, done that, got the T-shirt, except I carried debts around for many years before I paid it all down.  Hopefully, it won't take you as long.  Unfortunately, career interruptions and medical circumstances are frequent reasons that consumers get in over their head with credit cards.  Also, I unfortunately agree with you that your FICO score will likely continue to decline with such high utilization and total debts.    It looks like you owe about $67K right now.  Getting any new credit card, much less one with enough credit line to move a significant amount of that debt, is unlikely, so I would think a BT credit card is of no help.  I'm also assuming these are your only credit cards??  (In my case, I had other existing cards that gave me BT offers so I was able to roll balances around between accounts for awhile.) 

Calling a lender (like Chase) is always a good option, especially since you're employed again and sincere about repaying.  Your prior relationship and repayment history is probably something that would work in your favor.   They might be willing to extend a special repayment term. 

A debt consolidation loan is probably a good idea.  Beyond that, there are a few other options.  If you have a mortgage, you could do a cash out refinance although the terms right now are not favorable.  You could consider what assets you have to sell, such as second properties, stocks, or other possessions.  I don't usually recommend this, but if you still have a 401K you can borrow against it.  Just be sure to pay it back.  See >this article from Investopedia<  for some general discussion.

That $67K is a lot of money, but if your new salary is high and obligations are not, you may be able to aggressively pay it down with some belt-tightening.  If you'd like some help figuring that out, give us more details.  Either way, best of wishes and hang in there.  This too shall pass. 

[Kforce]

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@Ellieflowers wrote:

I'm worried about being credit chased by Chase and stuck in a horrible loop where as I pay down my card, they'll keep lowering it which will keep raising how much debt it looks like I have compared to how much I've not used on other cards.

This look's to be true, you have them balance chasing you.

This means to lower utilization you should keep focusing on the Amex.

All extra funds on Amex or BT or both, until less than 49%.

- In January American Express contacted me and said unless I pay them $5000, they will lower the credit limit to just above what I owe which at the time was $35,000, so I paid them that and have been paying down the card agressively with my last few pay checks.

Keep this up 

- Chase was what I was going to be working on next, I was going to try to get both American express and Chase below 70% then divide my payments between them but this new lowering shocked me. They cut my main Chase from 35,000 to just above what I owe at $30,000 and they cut my hotel card I use for travel for work and usually pay off the same month or next month in full from $25,000 to $500.

This would make me write them off and work with the issuers that have not balance chased me

until you are out of danger with BofA and Amex. 

* Note : Depending on each issuers APR, to save money I might change this recommendation *

It would be nice to know each cards interest rate (APR)

Cards:

• American Express: $31,000 out of $40,000
• Chase: $29,000 out of $30,000 (it used to be $35,000 they just reduced it)
• Chase Hotel card: $0 out of $500 (It used to be $25,000, they just reduced it)
• BOA Card: $7000 out of $15000

What should I do?
This depends on current interest rates on cards. 

Your monthly money to apply to credit card debt. (Used to figure best options if trying to save)

Other things unknown about your profile.

( Help us figure probability of you getting a BT,

low Interest CU card or personal loan.)

Do you have any loans? mortgage, car.

Any recent inquiries, age of cards.

Credit Unions you are a member of.

- Open another credit card and do a balance transfer and keep paying things down 

Might be a good option

another credit card would raise the ceiling on some ratios of available credit vs debt I have I think?

Maybe, a little but a new card should be planed if it saves enough money more than 

worrying about short term score gain. Score will come back after debt is gone.

Money lost is gone.

- Take out a debt consolidation loan somewhere and do a massive payment on both the american and chase cards then use the likely half as much APR / Interest rate on the loan to pay it off faster than I could with the credit cards.

Also maybe a good option. 

Loans, and/or new cards can be dangerous for many.

It sounds like you have an excellent track record until a major life event so this

option might be OK for you.

- Tough it out and keep paying and see what happens

Always an option.

The fall back if you can't get a good loan or BT card (Both should save you money)

With Apr's and money you can pay each month, easy to show cost & time with this

method

- Something else someone else maybe has advice on
Every extra dollar to CC payments saves interest and time you are in debt

No "Starbucks", buy food and cook, pack a lunch, cut streaming services, trim phone plan, etc

Thanks I really appreciate even a nudge in the right direction

As @Aim_High said:

Either way, best of wishes and hang in there. 

This too shall pass. 

---

[Traveler101]

I would try calling them again, not so much for the stopping of the credit chasing. It's unlikely they will do that. Approach them with a temporary pause in charging intrest. That or reduction of intrest rate that you currently have, in order to pay this down. If they gave you a promotional rate, or 0 rate, that would allow you to pay it down faster. Some lenders have done that foe folks. Discover comes to mind as I have read in other posts.

It's sad really. Good people get in a bind due to circumstances out of their control. Banks aren't necessarily your friends. Credit unions can be a little more understanding and have credit protection options. Once this is said and done, perhaps look into a credit union.

Maybe they will give you a better rate. Fingers are crossed for you. Just keep the faith, scores and credit lines can rebound. You have no lates. Kudos to you for making it this far and hopefully things will turn around.

[keekers]

I would look hard at a debt consolidation loan. This will accomplish two things potentially:
1. Reduce your minimum monthly payment
2. Reduce the interest you are paying (your APRs aren't listed)

The most important thing is to preserve your payment history and secondarily reduce the interest you are paying. Hang in there and keep grinding. This will pass.

[ptatohed]

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@Ellieflowers wrote:

Hello friends and strangers

I'm rather anxious as I've never been through this before, usually I wouldn't ask in public but It's all I can think of and would appreciate any advice.

I'm worried about being credit chased by Chase and stuck in a horrible loop where as I pay down my card, they'll keep lowering it which will keep raising how much debt it looks like I have compared to how much I've not used on other cards.

I went through a terrible past almost year where I was let go from my good job and to survive and take care of family as im the single household earner =/ and had some medical emergencies and unplanned things, I made the mistake of letting my main two credit cards go above 70% utilization while I looked for a new job and now finally found one.

I usually like to keep things paid down to only have 10% utilization or under but things just were not good. Now that I have a good job I was going to start working on paying everything down again.

- In January American Express contacted me and said unless I pay them $5000, they will lower the credit limit to just above what I owe which at the time was $35,000, so I paid them that and have been paying down the card agressively with my last few pay checks.

- Chase was what I was going to be working on next, I was going to try to get both American express and Chase below 70% then divide my payments between them but this new lowering shocked me. They cut my main Chase from 35,000 to just above what I owe at $30,000 and they cut my hotel card I use for travel for work and usually pay off the same month or next month in full from $25,000 to $500.

Cards:

• American Express: $31,000 out of $40,000
• Chase: $29,000 out of $30,000 (it used to be $35,000 they just reduced it)
• Chase Hotel card: $0 out of $500 (It used to be $25,000, they just reduced it)
• BOA Card: $7000 out of $15000

I have a FICO of 741 right now and I think my credit rating is 724 as it tanked a bit, it used to be 820 but I am trying to work on it . I am pretty sure this will go down even more now even though I'll be paying things off.

 I am kinda frightened at this point such a drastic reduction on the Chase hotel card could wreck some kind of ratio and then it will end up in a loop where things keep getting lowered as I pay off and it keeps that ratio high. I just learned of what credit chasing is today by reading these forums.

What should I do?

I thought of the folllowing things:

- Open another credit card and do a balance transfer and keep paying things down and do not use them except for essentials, another credit card would raise the ceiling on some ratios of available credit vs debt I have I think?

- Take out a debt consolidation loan somewhere and do a massive payment on both the american and chase cards then use the likely half as much APR / Interest rate on the loan to pay it off faster than I could with the credit cards

- Tough it out and keep paying and see what happens

- Something else someone else maybe has advice on

Thanks I really appreciate even a nudge in the right direction

---

No offense but, if you have nearly $70k in cc debt, I don't think your first concern should be if you're being balance chased or not.  I'm sorry, but forget that.  You can work on that later.  In this case, Finance before FICO.  Concentrate on getting that debt paid off.  Then, go back to working on your FICO.  Good luck.   

[CorpCrMgr1]

Amex and BoA are treating you the best. I'd concentrate on staying on good terms with them. Your Chase Hotel card is for practical purposes gone. Put a tank of gas spend on it each month and PIF just to try keep it somewhat alive. Keep paying your other Chase card. If it keeps CL chasing I wouldn't worry about it. Put your larger payments on the other two. Good luck!