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Compucredit (Aspire) Canceling Providian Account

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I have had a Providian account for around 3 years- got it as my first card after a bankruptcy. Through steady usage and re-payment I worked it up to a high credit limit and a decent APR. I know folks have had problems with Providian but they were good to me.

On Saturday I get a letter from Aspire Visa saying they have purchased my account from Providian and they are closing my account at the end of August "upon review of your credit history". They also immediately reduce your credit limit to $100 more than your current balance so you can't run up the charges- smart on their part but not so good if you were trying to make a purchase thinking you had lots of credit limit left.

Needless to say this sucks! Fortunately I have two other cards to work with, but one is low limit (only $600). I will have a hard time getting another card as I am now self employed in a business that is only a year old and can't show much income.

Just wanted to give anyone else out there a heads up. Compucredit bought Providian's accounts in late 2001 but it did not finalize the deal until late July of this year.

They pulled Equifax BTW.

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Did as you suggested. There was already one other letter on there from someone who had two accounts canceled.

I doubt they will do anything and even if they do I'd be extremely wary of them. My girlfriend used to have one of their cards and had nothing but trouble dealing with them. So damned if I do, damned if I don't!

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If you don't get their attention with the letter, then follow the next path, and file complaints against them, with BBB, FTC, AG, and such.

If you can, pay down that problem cards. Start with the ones 1st that are over the limit, to get immediately back under the credit limit. That is a must, since the finance charges can run you over in a way that just the high interest can't do.

Once that is complete turn your attention to paying down the highest interest card you have, putting what extra money you can towards that debt. I know it is not easy and takes time, but I did this myself - took me two years this way, but I know this is the proper way to reabilitate your finances. All the while, just pay minimum payments on all the other accounts, until you get the highest interest card down to a decent bearable balance.

Once you have that accomplished, then move to the next card and if at all possible double up you payments on the one which you are attacking.

Example on how interest affects payments:

Say you have a $5,000 balance on a $5,000 credit limit card if you have a 12% interest rate (meaning 1% per month of the balance), then right at this time $50 is finance charges being paid each month. And that will change and go down as you pay - but very slowly. So you pay $75 on the payment and only 25% is going to the principal.

Now say that you are late just once, and the creditor defaults your interest rate, to 19% (meaning 1.58% per month of the balance), then you are putting $79 towards finance charges. If you minimum $75 - then that will no longer cover the $79 you would have to double the $79 to make any progress on paying this down.

It is very important that you run the numbers; if you are to have a clear picture to see what all is playing a role here and can hurt you.

Cause once you start having lates / over the limit fees, and such... this will just go to the balance and keep pushing up the finance charges each month eating up what you are trying to pay as a minimum. By all means don't let the credit card companies take you hostage, they extort more money then should ever be allowed in a 6 month period or more on these accounts.

Some people can even extend the suffering, if they are trying to make minimum payments after having gone delinquent. That is a no no, if you know for a fact you can't immediately pay the minimum required to get back to current status and stave off the charge off. Then quite paying, cause they are just robbing you blind, you might be like at a 30 / 60 late status for months because you just kept paying money not to go 90 days delinquent. They can drag this out way past 6 months for standard charge off and just bleed you dry. So just be careful that you see the whole picture when ever you know you are having problems.

That pre collection to charge off status is just a trap! especially to peopel that don't understand how this snow ball affect of finance charges work. I know right now you did not say that was your case, but just wanted to put that out there for anyone that would see that would have this problem.

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