Here&39;s a good question from a reader experiencing a rate hike:

My wife and I have two credit cards with Chase. We had a business card that we  "opted out" of paying a higher interest rate by effectively closing the account and then being told that for any reason they could increase the interest rate that ended up staying at 17%. The reason for increasing the rate was largely due to making payments late, according to Chase. We always pay on time, never late. That was our argument and then we were told other reasons for the increase in the rate. We have had this account for about two years. We are financially able to pay $8500.00 of the current $10,000 that is on the card and would like to pay it off and get out of this debt with Chase. From what I have read, should we close this card using the proper form for closing an account? Will it hurt our credit rating if we close it?

Also, we have another Chase card that was a rollover from another card. We just paid off the card that had a balance of $1500.00.

So, after we pay the $8500.00 on the other Chase card, would we be better off paying down the balance on the card and keeping the above card that had $1500.00 on it open? The business card was closed after we chose to opt out of the higher interest rate. We were told we could no longer use the card but could continue to pay it down with the 17% interest rate.

We are very frustrated with Chase and the way they have treated us. We both have excellent credit and we have learned that Chase has a reputation of increasing their interest rates to the extreme according to many web sites that have cardholders telling stories about Chase and their experiences with Chase. We do not want to hurt our credit rating either.

It sounds like you have been hit with one of those all-too-common Universal Default clauses. If I understand your email correctly, you will pay the business card with the $10,000 balance down to $1500 and the interest rate remaining will be 17%. It sounds like a good move to pay that off if you have the available funds since the interest rate is definitely steep. It sounds like your question is whether you should then officially close that account.

Have you checked your credit reports yet? It sounds like you already closed that account so it may already be reported as closed on your credit report. If that’s the case, there is nothing you need to do. If it is not listed as closed, I would leave it alone. A closed account with a balance can be a negative for your credit score. You made a smart move, moneywise, to close it so the interest rate wouldn’t go up. But as far as your credit is concerned, it’s better to leave an account open if possible. That&39;s especially true if you have a balance.

It also sounds like you are going to have another Chase account that has been paid off and you want to know whether to close that account. Again, as far as your credit scores go, it’s better to leave it alone (read here to learn why) unless Chase is charging you an annual fee that it won’t waive. Even if you don’t use the card to make purchases, you can use it as leverage to negotiate a better deal with another card issuer that may charge you a higher rate. In other words, if you have other cards with balances, you can call the other issuers and ask for a better rate or tell them you’ll move your balance over to the Chase card (the one that will now have a zero balance).

Have you checked your credit scores? If they are decent, I would recommend you shop for a new low-rate business credit card. (You may want to wait until after you pay down the card with the high balance and the new balance shows up on your credit report to see where your credit stands, or sign up for credit monitoring). You can use it to transfer the balance away from the Chase card that is charging 17%. You can find business credit card ratings and offers here.

Let us know how things turn out!

Gerri Detweiler – Personal finance author, radio host and credit expert. Gerri contributes budgeting, debt recovery and savings information online.