Hello, my wife and I are taking an active approach to paying down our debt (mainly CC debt). I have recently consolidated my own into two trustworthy CCs (both newly applied for). My wife, on the other hand, recently received a huge rate increase on her single CC (to ~21.5%). As a consequence, and also as being the lone holder of a mortgage, a home equity loan, and a car loan, she has been turned down for a new CC by two credit unions. Her goal is to open a new CC account with a lower rate and transfer her balance from the higher rate card.
I'm not sure how to go about helping her. One solution is to cosign on a new CC which would probably get her approved, but probably not for a high enough amount to cover a balance transfer (though I'm not positive). I'm confident that, together, we can pay down the debt with little trouble. Any suggestions?
Having the debt isn't a problem. With decent interest rates, she (we) can pay it down, but since the inexplicable rate increase bringing her monthly payments to about $450/month, we've got to find another option!
Hi Jchedrick,
Yes, as you said cosigning the loan might be a good option for your wife. If you have a good payment history, then that might help. You simply have to apply for a new account and check the terms and conditions. However, balance transfer sometimes hits the credit score as well. You need to take care of that. Lastly, I think you can talk to the creditor regarding this increase. Tell him about the financial situation and request him to lower it a little.
Not positive but if your wife's name is the only one listed on the loans. Than her dept to income ratio is probably the reason she can not get anymore credit extended to her. So with you co signing for her maybe will include your income and then she may quifily but not sure for how much.
Thanks for the responses. I appreciate the help. We could try talking to the creditor, but unfortunately, I don't hold much hope for that approach. My wife did already talk to them and she let me know that their option was to reduce her rate, but that they would also close her account. I find that to be a strange solution. I'm not a business major, but it seems to make more sense to lower the rate, but keep the customer. Sounds strange, but I wasn't involved in that conversation so I can only go off of what my wife says.
Debra, you're right, the debt/income ratio is the reason. It just stinks that her creditor decided to pump up her interest rate for no apparent reason. I just might have to cosign with her on a new CC and then live a bit tighter while viciously attacking the debt at every opportunity.