USAA just hollered – They’re raising my credit card rates!

by J. Money - Last updated July 10, 2012

USAA - Still love me?Yup, even my beloved USAA is fighting the good fight these days. Got a nice little letter in the mail yesterday (which may, or may not, have been cleverly disguised as junk mail) stating there will now be a minimum annual interest rate set @ 6.00% starting in Feb, 2009 :(

It’s certainly not the worst thing in the world, but that doesn’t mean i have to like it. Currently I have two credit cards that are set at “prime”, which as of 2 days ago just dropped again to 3.25%!!! It won’t remain that low forever, but it still means this new minimum will now be DOUBLE.

The good thing here is that I don’t have any balances right now on either card that would be affected by this. Here’s a quick snapshot of both cards, and what their used for and all:

  • Card #1 – the “House” card: $25,000 limit with a fluctuating balance. We put all household expenses on here (utilities, groceries, etc), and then pay it off in full each month.
  • Card #2 – the “Auto Loan” card: $30,000 limit with a locked in 3.4% rate for 1 year. This is how i financed my old school cadillac ;) I knock off around $500 a month so the balance is slowly going away. Currently it has a $4,000 balance.

So right now we’re fine…i’m just REALLY hoping that the credit limits don’t get slashed next :( I pumped those bad boys up to help our credit scores, but it seems like a lot of companies are slowly cutting back now. Oh well, i don’t have much power over it all anyways…

Oh, and I almost forgot!!! The funniest part about this whole thing was when i skipped halfway through the letter and saw, “You may reject these changes between Dec. 6, 2008 and Jan 23, 2009”. I was like helllllll yeah, thank goodness i read that b*tch! I’ll just opt out of it and be on my merry little way ;) haha…

Until i read the next header which read, “What it means if you reject the changes”. Wanna take a guess as to what was in there? It wasn’t fun, that’s for sure: Your card would get closed down, you’d lose all your rewards/points/etc, and more importantly you wouldn’t be able to re-apply for it again. Yikes! And yes, you’d still be accountable for all previous charges you already put on there ;) although it WOULD be at your normal rate, so at least you’d have that going for ya.

The moral of the story is to just read the stuff your bank sends you. It may look like junkness, but that one minor detail you miss might come back and bite you in the a$$ later. As for you USAA, you know i love ya! Can’t get rid of me that easily…

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Jay loves talking about money, experimenting, blasting hip-hop, and hanging out with his two beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!

{ 4 comments… read them below or add one }

1 Rachel December 16, 2016 at 3:49 pm

So I’m wondering how exactly you “pumped those bad boys up” in order to help your credit scores, you know, the whole process you went through? I know people say you can request increases and what not, and all my wonderful online CC services have a little button specifically for requesting a higher credit limit, but I’ve always been a little afraid to ask for an increase, and just let them increase naturally over time. Am I just being dumb to be scared of this? Are there any repercussions to asking for higher credit limits?

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2 J. Money December 19, 2016 at 6:10 am

Hey Rachel! You found an oldie of mine :)

But great question indeed. First off, yes – it IS as easy as just calling them up and asking. That’s what I did to raise both of my cards. (Or you can try that fancy button of yours – even easier!). What this does is improve your “debt to credit” ratio. I.E. make it look like you’re even more responsible since the amount of debt *owed* compared to the total amount *open* for using becomes much much wider. For example, if you had a balance of $1,000 on a card with a limit of $2,000, then you’d be using 50% of your total credit. If, however, you had that same $1,000 balance but your credit line was $10,000 – ten you’d only be using 10% of your credit! Which looks much better, although of course it’s the exact same thing.

So that’s the pro. The con? You could now be tempted to spend all that extra credit you just got :( So if you’re not good w/ your cards or don’t trust yourself, then I’d say leave them alone and keep going about your business. But if you are responsible with them and/or never carry a balance (like I do), then increasing it would probably be a smart move.

Hope this helps!

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3 Rachel December 20, 2016 at 11:56 am

Haha, that I did! I just started reading your blog this year, so I’ve got 8 years worth of information nuggets to work my way through!

I get why it’s awesome to do it, and right now I’d love to have higher limits: much like with your caddy you bought in ’08, I’m using a 0% card to finance furniture (so I can get past the college years of living out of plastic totes and crappy IKEA furniture) and therefore carrying a balance until that 0% period runs out. Of course, this won’t be forever, but I’d love to higher limits for in the future, as well.

But if it’s just as easy as calling them up, or hitting my fancy button, then it’s worth a shot!

For some (very irrational) reason I think I was just afraid of them saying something like “NO! How dare you ask for more money?!” and then cancel my account or something.

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4 J. Money December 21, 2016 at 6:20 am

Oh no – they looooove giving people credit because they want you using it all up so they can make more ;) So long as your credit score and history with them is good, at least (forgot to mention that part earlier – if you have crappy credit/payment history with them it’s much harder to get increased.)

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