how to avoid overlimit fees?

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sublimehusker
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how to avoid overlimit fees?

Postby sublimehusker » Sun Mar 15, 2009 2:27 pm

I was wondering if anyone knew if closing your account with the credit card company would be a way of avoiding overlimit fees? I want to close out my 2 credit cards and possibly work out a payment program with them. Anyone have any comments on this?


Multi-Purpose
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Postby Multi-Purpose » Tue Mar 17, 2009 6:30 pm

What do you mean closing out your accounts? Do you mean closing our your credit card accounts while you have a balance on them?? You can't do that. You can't close an account if you still owe money on it silly. ;)
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sublimehusker
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Postby sublimehusker » Tue Mar 17, 2009 8:09 pm

I mean just cutting up the card and telling the credit card company you no longer want the card and want to just pay your bill off on a monthly basis. Are you still obligated to pay an overlimit fee along with the balance and interest?

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Mogul of Pineapples
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Postby Mogul of Pineapples » Wed Mar 18, 2009 2:04 am

sublimehusker wrote:I mean just cutting up the card and telling the credit card company you no longer want the card and want to just pay your bill off on a monthly basis. Are you still obligated to pay an overlimit fee along with the balance and interest?


If you are exceeding your credit limit they won't normally let you close the card. If you are below your credit limit you can close out your account and you will be required to pay the remaining balance on the terms you currently have - the same interest rate and the same monthly payments. The overlimit fees won't apply since you will be below your credit limit.

If you are over your credit limit what seems to happen is the account will be eventually be charged off after a few months to collections which is not good. I think your best options would be to get the balance below the credit limit. It sounds like you already probably have the highest possible interest rate, so I don't see the point in locking that APR in. I would get the balance below the credit limit, cut up the card, and make regular monthly payments for the minimum due. It's not the ideal solution and will take a long time to pay off but that is still better than a chargeoff.
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sublimehusker
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Postby sublimehusker » Wed Mar 18, 2009 4:23 pm

thanks for the advice, that is my plan. Unforunately i missed several payments due to personal stuff, and now my card is way over the limit!

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Mogul of Pineapples
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Postby Mogul of Pineapples » Wed Mar 18, 2009 6:28 pm

sublimehusker wrote:thanks for the advice, that is my plan. Unforunately i missed several payments due to personal stuff, and now my card is way over the limit!


I'm sorry to hear that. Do you think you will be able to come up with the money to get it below the limit? I would recommend also to call them up and let them know you're going to be paying. If they think you have no intention of paying they may think you are defaulting, so be sure to let them know your intentions, and preferably, make some kind of payment at the same time, even if it's not the full amount over limit.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

Current Cards:
American Express: Blue Cash, Simply Cash Bank of America: WorldPoints Platinum Plus Chase: Amazon, British Airways, Cash Plus Rewards, Freedom, Ink Cash Citi: Thank You Premier, Dividend Platinum Select Discover: More
Primary Everyday Card: American Express Blue Cash
Primary Travel Card: Chase Sapphire Preferred

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Postby teddy19 » Sat Mar 21, 2009 1:19 pm

I agree with Mogul. You definitely should contact your credit card company and explain details. If you over your limit and behind they most likely already closed your credit card. What you need to do is contact them so they do no continue to charge you overlimit charge and late charges.

I have seen these late fees get out of control on some of my clients in the past. A lot of credit card companies have special programs to lower your interest rate for up to 6 months. I had one clients receive a 2% rate for six months. They had to reapply after that time.

Best thing for you to do if you haven't already is to contact the credit card company and make some type of payment arrangements. In the past they may have been jerks, but in today's economy they will probably work with you.

Hope this helps



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