Credit cards gone wild: Shocking rate hikes
As credit card companies move to limit their risks, business owners face unpleasant surprises from their credit card providers.
Owen Kusolpaisit, Southhaven, Miss.
I have a very small business and most of our debt is on credit cards. We had a 0% annual percentage rate until January 2009 that would go up to 7.99% thereafter. A few months ago my check got there a day late. The credit card company, Advanta, increased my APR to 7.99%. I just received my current statement and the APR jumped to 25.39%. When I called, a supervisor said it was done for economic reasons. How can they do that? Is it illegal? Can I report them?
By Kathleen Ryan O'Connor, CNNMoney.com contributing writer
Raising your interest rate at any time, for any reason, is perfectly legal – just check the terms and conditions on your card for the proof. But if it makes you feel any better, you have plenty of company.
Faced with the same economic pressures as other companies affected by the ongoing recession and credit crunch, credit card companies are racing to protect themselves from the costs of more defaults by hiking interest rates and slashing credit limits, even for cardholders with excellent credit histories.
Stories abound of customers waking up to find their cards less flexible and more expensive than ever before. But where a credit squeeze on an overextended shopaholic might be a blessing in disguise, credit cards are a critical source of financing for many small business owners. As bank loans and credit lines become ever-scarcer, entrepreneurs are left with fewer and fewer options.
Experts warn that the pain won't pass quickly. One prominent banking analyst, Meredith Whitney, predicts that pullback will wipe out a whopping $2 trillion in credit lines over the next 18 months.
"Unfortunately, it's a situation we are hearing from a lot of our members," said Molly Brogan, vice-president of public affairs for the National Small Business Association, a Washington-based advocacy group. "There's so little transparency in the credit card industry, so people just don't know. [Small business owners] go in understanding they will have one deal, and then realize there are very few limits [on what credit card companies can do]. There's not a lot of recourse small businesses can take."
An NSBA survey in April found that 44% of small business owners used a credit card to finance their business. "That's more than any other source of financing, including bank loans and earnings," Brogan said. "There's a huge reliance on credit cards."
Even the chair of NSBA's board, Marilyn Landis, discovered the hard way that she isn't immune to rapid changes in the credit card market.
Landis is president of Basic Business Concepts, a company that provides CFO services. Landis' expansion of her Pittsburgh-based business turned into a major headache after the increased activity and travel expenses on her business credit cards prompted her issuer to lower her credit limit. She intended to pay off all the expenses within a year, but that plan became more difficult when her interest rate abruptly jumped from 3% to 27%.
Plus, payment dates moved across the calendar seemingly at random each month, and the COO of her company was given the runaround while trying to make a payment over the phone. Landis was stunned at the difficulty she ran into with the card – "and I'm a finance person!" she said.
Advanta said its right to raise interest rates at will is spelled out in the terms and conditions for its cards. On the company's Web site, those terms include this catch-all phrase: "We may change any of your account terms, including rates and fees, at any time for any reason."
Advanta spokesman David Goodman said that each customer who receives a rate increase is notified in writing and given the opportunity to opt-out. If they exercise that right before a set deadline, they can continue paying down their existing balance at the old interest rate – even making just minimum payments – until the balance is zero. However, the credit line will be frozen, and once it's paid off, the account is closed.
How does the opt-out option work? Advanta isn't saying. Goodman declined to offer details about the length of the deadline and whether cardholders need make their opt-out request in writing, by telephone, or in some other way. Consumer complaint boards on the Web are full of tales from Advanta consumers who say they never received any notice of their rate hike, and who are unaware of any opt-out clause.
Forcing customers to accept higher rates or close their accounts is a way for credit card companies to triage their credit risks. The sour economy has directly hit their bottom lines: According to one analyst, delinquencies and default rates rose to all-time high in September for Advanta. Defaults on Advanta's loans rose to 11.02% from 4.76% a year ago, and the delinquency rate rose to 6.47% from 3.22% a year ago, according to analyst Scott Valentin of Friedman Billings Ramsey & Co.
Mike Haynie, a professor of entrepreneurship at Syracuse University's Whitman School of Business, said all of this has a snowball effect.
"A lot of people use those cards for inventory, and it's a revolving kind of relationship between buying inventory or supplies," he said. "When the credit card company takes away their ability to do that, it's an instant hit on the bottom line. It's particularly tough to swallow when it's not because of a late payment or something like that but to reduce risk …There's not a lot they can do."
When companies can't borrow, their performance can suffer, which then leads to layoffs and production cutbacks. "It's a vicious cycle," Haynie said. "It's scary, honestly."
Seasonal businesses can be particularly hard hit.
Charles McCabe, CEO of People's Income Tax and The Income Tax School in Richmond, Va., has seen his credit limits lowered and interest rates increased on both his business and personal American Express (AXP) cards.
He tried to preserve what was left of the available credit on one card, about $15,000, by writing a check against it to deposit as cash into his business checking account, but "as soon as the check reached Amex for payment, they reduced my credit line down to the amount that was previously owed and rejected the $15,000 check," he said.
"Their reason was that my overall credit balances with all credit cards is too high," McCabe said. "I explained that they are high at this time of year because I operate a multi-office tax business which is highly seasonal, and that the credit lines are paid down each year during tax season. I also pointed out that I have been an Amex customer for 37 years, since 1971, and have never been late or missed a payment. They said that those factors didn't matter and their decision is based strictly on their criteria and could not be reversed."
Getting burned by credit isn't a new problem for business owners. An over-reliance on consumer credit to bankroll his business almost cost Glenn Phillips his company in the downturn that followed the Sept. 11 attacks in 2001.
"The credit cards were just showing up, business and professional. We had good cash flow and I have great credit," he said of the time before the downturn. "Just cheap, cheap, cheap money."
That caused Phillips to be overly optimistic, and when business slowed for his Birmingham, Ala., software company, he went from using credit cards to expand his business to using them just to keep it afloat.
Phillips learned the hard way that when you really need the money is the precise moment the banks will start saying no. "I wasn't disciplined," he admitted.
Phillips fought his way back from the brink of bankruptcy, at one point selling his home and renting a single room to live in to save money. Today, his revamped company, Forte Inc., is stronger than ever, winning awards from software giants such as Microsoft and employing a staff of eight.
"The credit card game – if you are going to play that game, understand what is coming," he said.
Give us your advice: Check out recent “Ask & Answer” questions.
Related links:
Credit card crackdown coming soon
From Joe Martinez Irvine, CA Just to let you and your reader know, ADVANTA which was a major issuer of credit cards to business has now moved what's left of its operation to India, they are gouging long time customers with fees that violate usury laws and there absolutely nothing you can do about it. Numerous class action lawsuits are being filed against them, follow their NASDAQ listing – a trial lawyers dream and a credit card holders nightmare. (NasdaqGS: ADVNA)
http://finance.yahoo.com/q?s=advna
From John Miami, FL We work with people who have been screwed by credit card companies. send an email to debtrelief@rocketmail.com detailing how much you owe and if you are delinquent. We can negotiate these balances down to approx 55 cents on the dollar, cut your interest rates to 0 and put you on a repayment program of 6 to 60 months. Your credit report will show up as 'paid as agreed'
From larry august elkton fl we can thank mr Obama for this, just like everything else he said, it just opened a can of worms and made it worse, all these comments are right on,and theres not a damn thing people like us can do, hopefully, if we all keep makeing enough noise about these greedy co's, they will step in and correct this , we need to fight back ,pay up our cards, stop useing them, let them go under, they dont care about us, why should we care about them
From larry august elkton fl way to go Laura, i'm with you, when i finish my obligation, these credit card companies can go you know where, i hope they loose there shirts and go belly up
From Laura chillicothe,ohio These credits card copmanies have been out of control way too long and the government giving these companies the time to raise rates on people before employing the new laws is just krap my chase mastercard was raised on me from 15% to 22% for no reason whats so ever i had always payed it on time and well above the minimum payment and their reason in the flyer was to " recover rising costs" well i will make sure they get no more money from me as I have put that card up and will cancel it once its payed off . I had been a customer for over 15 years and this is the thanks they give me so my answer back to them is BITE ME!! and I hope all the rest of your customers declare bankruptcy and you get not a dime from them…I am done from now on if it can be bought with savings i don't need it
From et hartford Ct Here are the facts. Yes, President Obama and Congress did something to "control" the credit card industry, but allowed them enough time to raise interest rates sky high. They talk so much about corporate America being befriended by -Republicans, when all I am seeing is buddyship with the Democrats. They word it in a roundabout way to make it sound like they are cracking down, yet allowing them time to jack interest rates to the sky now. It won't matter in 2010 that they have control. All this has done is made people more in debt and will drive many to default. It will make some of us smart enough to stop using credit cards though. Wonder how the cc industry is going to feel about that.
If Obama and the dems even want to try to fix the economy after giving these banks our tax money and in return they thank everyone with rate hikes…….FREEZE THE CREDIT CARD COMPANIES FROM RAISING RATES NOW!!!!!
From George Palmer, Ormond Beach, Fl Everyone, just look at it this way. This is a wake up call for all of us. Pay the cards off and never use one again. I know thats the path I'm walking towards!!8-)
From Will, Kentucky Just because people make mistakes does not give other people the right to take advantage. There are good people out there that use their cards for emergencies only and pay their bills faithfully like good upstanding citizens do, but yet they get caught up in the orgy of crap because of other peoples mistakes. We are not outraged by the people who made the mistakes, we are outraged for the people that obey the rules and get raped anyway.
From PizzaMan, Kentucky You shouldn't insult honorable Pizza Delivery drivers like that. And I don't mean that to be cute either. My Pizza delivery job is getting me through college, no credit cards required.
From ChamberstucsonAZ Heres something to think about. Did you know that the average retailer raises the cost of every item in the store in order to cover the loss on receivables? Its called "allowance for bad debts" and is contra to accounts receivable. Think about it — if yu pay cash for the items purchased you are payinf MORE than you should pay. You are literally being penalized for paying cash!!! I s this a great country or what???
From Todd Burke That's a lame excuse……One of my credit cards systematically reduced the due date from the 29th to the 23rd over a four month time span. When I missed a payment by one day (after they reduced it by three days), I complained and they removed the late fee and put my due date back to the 29th. Your lame excuse is worthless
From Tyler Durden, Surf City, NC This is not about irresponsible consumers who some of you posters think are to blame! This is about banks being too big to stop. THEY have found less than honorable ways to dramatically increase their profits. THIS WASN'T HAPPENING 10 YEARS AGO when the industry was more reputable. WORST OF ALL, this is impacting small businesses who create more than half of the private non-farm gross domestic product, and they create 60 to 80 percent of the net new jobs. Nearly half of small-business owners identified credit cards as a source of financing they had used in the previous 12 months. How many businesses are being forced to layoff workers because of these unwarranted rate hikes? One of the basic tenets of free-market capitalism is the sanctity and insolubility of contracts, but somehow the credit-card industry has managed to insulate itself from adherence to this principle, retaining the right to unilaterally change the conditions of their contracts at any time.
From G'mmel Ola, Ottawa, ON, Canada I am employed at Bank Of America and we use a similar system but its not because you pay on time. If you take into account holidays in the billing cycle it can increasethe amount of days in your billing cycle. That's why it states on the credit card agreement that the billing cycle can fluctuate anywhere from 25 – 35 days in a billing cycle. This is why your due date changes from month to month
From wallis,austin,tx Its absolutely insane, how some legislators/congresspersons, can fight bring credit card companies in line with basic tort laws. If someone is ,not,fighting these loan sharks, then they must be promoting and supporting loan sharking practices. Example,"I haven't heard any evidence that the competitive market isn't working," said Rep. Jeb Hensarling, R-Texas. "In the absence of that, why are you attacking risk-based pricing?" This guy is an elected crook, voters, get rid of this trash now, or we all suffer losing our homes/business's.
From Mark, Phoenix, AZ I was told by Citibank (for a Sears card) that they have a 30 day billing cycle and can change the due date each month. But if you pay off the balance they make it a 20 day cycle. I think they will still send you a bill once a month and change the day if they notice you paying to the due date.
From Vivek L, White Plains, NY Hi Owen,
We have been hearing the same complaints from other small business clients of ours who are being subjected to arbitrary increases in credit card rates and fees. The bankruptcy law rewrite did a lot of damage to the consumers’ rights and the result is today every lender can raise their rates on your debt if you miss one single payment with any one of your other creditors!
Indeed our bankers alliances have been telling us that they are constantly monitoring small business owners credit scores to see if there are any new inquires against their credit so that they can in turn use that as an excuse to jack of up rates or freeze out lines.
Hopefully the added pressure from congress and the promise by this administration to get tougher on banks with regards to banks lending practices may bring about some change.
In the meanwhile I recommend that you carefully ready all about how you personal credit scores can be affected on this excellent forum and our websites, both of which give you tons of free resources.
Good luck.
Vivek L
http://www.smallbusinessplanresources.com
En Espanol
http://www.smallbusinessplanresources.com/spanish
From Mark, Kenosha, Wi Hi
I was told by a senator that a credit card law/bill was passed last year December 2008. This law that will go into affect July 2010 will protect consumers/business from alot of these evil practices. Everyone should contact there state representatives and President Obama and ask to put that into law NOW. I think what you will see on your credit card bills now in 2009 will shock you even more. ADVANTA, CITI, CAPITOL ONE, WELLS FARGO, CHASE AND MANY MORE ARE ON THE MONEY QUEST. I belive you will see more bankruptcys then you could of ever imagine, people and small business will not have a chance with this open ended finance situation. Pay day loans and loan sharks sound like a better deal than your local bank. The worst thing is Citi was working on hitting us in the wallet while they were cashing the BIG WELFARE CHECK GIVEN TO THEM BY US "WE THE TAX PAYER" talk about biting the hand that feeds you.
From Mark, OKC, OK I provide legal representation to folks whose interest rates are hiked. Mark Bonner; 127 NW 10th St.; OKC, OK 73103. (Anywhere in the nation through local counsel.) Feel free to write or send an e-mail if you are looking for financial relief. lmb@nemw.com.
From Penny, Dixon, CA I just received a notice from Cap. One, telling me they are going to increase my interest rate to a variable rate determined by adding 26.1% to the prime. Isn't that criminal? I have not used this card for the past 3 or 4 months and it has no balance. Could it be, they want irresponsible spending? My inclination is to cancel the card. However, I have heard and read some problems with that, i.e., affects credit rating, etc. What have some of you experienced?
From Chris Harrisburg PA I was involved in an auto accident 2 years ago,1/06 I was forced off the road by a speeding suv (person on cell phone) and the person never stopped,my vehicle rolled over a 50 foot embankment and landed on the roof, I was self employed and had a modest $15,000 in the bank,and about 5 credit cards used for my business with approx. $50k in limits, my score was 790 and I carried about $3k in card debt… but being in a coma for 17 days and paralyzed until major surgery in Sept 08.I was unable to work and medical bills ate up my so called modest bank balance(I used up my medical insurance payments of $1million per accident(was not aware of such a clause) but I contacted AE and BoA and lastly Discover I explained my situation and the deferred all payments for 180 days I did have to use my 5th card to live you know food mortgage ect. now my auto policy was paying me a meager $1100 a month but with belt tightening I goy by to pay off the balance of the card I was still using, anyway 6 months later I open the other 4 bills and am just crazed to see 32.4% hike and 6 months of LATE FEES AND SERVICE CHARGES I called but was told they had no records of any defer action (3 companies?) so I faxed them what they sent me showing deferment for 6 months, they played the we never got the fax, when I had proof it sent, so I got pissed and kept faxing it to them(over 20 times) I then called and was told same thing, and since I did not pay as agreed they killed my limits to balance owed, I was livid but I said I would work it out(I never was late or missed any payment and always paid most off or left small balance) they called me deadbeat, welfare person and other bad names, so I sent cease and desist letters and I just gave up, here I am unable to work or walk getting abused by these scumbags, but after another surgery this past year I can now walk, and yes I defaulted on $3k, but you know what? I still have 1 card I explained what the other companies told me and they left my last card alone, I am soon going back to work and will I pay off my debt? hell no! I was a customer of them for over 9 years and they treat me like that? they can go to you know where if they go broke good!!!!! do I feel bad? NO! after sending over 90 faxes and having Dr notes explaining my accident. they are still too damn greedy to admit they are wrong, you know it was prob a person from 1 of those companies that caused my accident… (I know just venting)
From JV, Detroit Mich I agree totally with Jerry Byrd's comment. In fact, I just sent an e-mail to my US Senator detailing the exact same proposal to limit credit card rates to 12%. If Congress does not act how abaout a nationionwide boycott of credit card payments. B of A is the worst of the predator banks and needs to brought to its knees!
From Raelyn, Las Vegas, NV I like your idea. Everyone I know has recently had their rates increased and credit limits reduced. The rates did not go up just a little, but in most instances from around 12-13% to prime plus 19.99%. Everyone was given te option to opt out. This means that you stay at your current rate, however, you can no longer use the card and if you do, it means you accept the new changes and the higher rate will go into effect. The credit card industry are a group of greedy whores, Sorry, but they get away with murder. Hate them.
From Reed Smith, St Peters, MO I feel for the person with the small business and was, like me, was using Advanta. I was warned in letter from advanta that my small business rate was goint to 37%. When I called them they stated "we are within the guidelines of the law" and my only option was to opt out locking the rate at 16.9% until it was paid in full. They gave me the credit limit of 65K and I never missed a payment always paid ahead of due date. Buyer beware of ADVANTA, they don't care about the small business owner.
From Lisa, Las Vegas Nevada I was in a restaurant and my waiter used my American Express to fradulently charge someone else's bill onto my card to the tune of 509.65. American Express in turn told me that since I gave my card to the waiter in a service establishment the charges were mine even though my signature was nowhere on the receipt. Is this legal? I fought this for 90 days and they subsequently closed my account after 17 years as a customer.
From Franco, Dallas, TX They have to charge you those rates to pay for entertainment. I know for a fact of a Chase bank manager who spends $1500 on lap dances at the nude bar when he is in town.
From chiara ziek It appears to me that if we own part shares in the bank, since taxpayers bailed them out we should have our credit interest lowered.
From Ryan San Diego, CA What about those of us who do not carry a balance? We should not receive a stimulus for living within our means?
From Joe, San Diego CA It's Criminal what the banks are doing as to whoring out credit to just about anyone, even if they can't pay it back.
I hope this comes back to roost soon, this has been going on for decades and soon will the next domino to fall in the banking /economic crisis in the country and around the globe.
From Jerry Byrd, Cincinnati, OH After reading some of the heartrending, frustating and maddening stories in the article and comments, I have a modest proposal.
Question: What would be the greatest, most effective and most immediate stimulus to our economy?
Answer: Reduce ALL consumer credit card interest rates on ALL outstanding balances and future charges to a maximum APR of 12% effective March 1st.
This would free billions of dollars, currently going to pay usurious interest, for immediate injection into the economy.
The positive impact would amount to much more than the proposed $500 tax break currently proposed by our government leaders. It would begin immediately and would generate a sustained injection of spending throughout our economy for the long term. It would be from the ground up a consumer driven solution rather than a top-down bank focused approach
…which clearly hasn't and isn't working.
If the banks issuing the cards feel that certain individuals are too much of a credit risk at 12% interest (Rather than a worse credit risk at the default APR of 29 to 32%? …Go figure!), then they should have the option of closing the account and establishing a 7 year pay-out agreement with the debtor at the 12% rate. This is fair, equitable and reasonable.
This simple yet fundamental move by our government would help many Americans get back onto a cash basis with their personal finances and would begin to reverse the slide into bankruptcy for 10's of millions of households. Which is better for the American economy, what is going on now …or a consumer citizenry which is less fearful for their jobs, homes and families and more hopeful for the future?
Does someone holding a credit card from Citibank, JP Morgan Chase, Bank of America …or fill in the blank, need anyone to spell out the abuses and predatory behavior exhibited by this so-call industry which has been acting in the last ten years more and more like loan-sharks from the Mafia?
The banks have been allowed to oppress the poor and middle-class long enough. They have literally written the laws allowing themselves unprecedented power over their consumer debtors. They have greatly profited from our fear,powerlessness …and especially our shame at our financial misjudgements and mistakes.
These banking institutions are not sacred, they do not hold the ethical or moral high-ground nor are they acting as partners with America. In fact, they care nothing about America, the people, our laws, our ideals and traditions or even our political parties; they care only about profit …no matter the cost!
All major religions and ethical philosophies condemn and reject usury and financial oppression. History records the consequences when the weak are economically oppressed by the powerful and rich …eventually, but inevitably a reaction takes place. Are social unrest, massive poverty and political upheaval to any bank's advantage?
What can we do? We can demand justice and equitable treatment under new consumer credit laws. We can change the system – if we unite.
We are Citizens. We are the People. We are not our credit scores. We are too big to fail!
From Jeff, Tampa FL "From ray, sarasota, florida
I have lived without credit cards for the last 20 years. I was issued a card by my company, who took usually 6 weeks to pay my expenses–but American Express wanted their money in 4 weeks. After receiving multiple calls at home from AE, I swore never to use one again. I haven’t missed them, just use debit card, and live fairly within my means. I try to use my grandmother’s philosophy and not buy it if I can’t afford it. ( what a concept)…Helps me sleep better at night…"
So you pay cash for your cars? Must be nice to be so wealthy. You've probably never lost your job and been out of work for months either, or been forced to sell your home because of the aforementioned loss of work, only to sell short because the neighborhood was full of foreclosures.
The original article was about credit card companies hiking people's rates into the stratosphere with little or no provocation. I would posit that this is a way of offsetting their losses, not only to defaults but in other arenas (like bad investments).
USAA doubled my interest rate a year ago, citing a tax lien mistakenly placed against me by California because of poor recordkeeping. I had the lien removed easily enough, but USAA did not reduce my rate. When I called them, they said I could fax them a letter asking to close my account before the new rate took effect and that this would lock the original rate. I did so, but the higher rate kicked in anyway. When I called them again the representative said a fax was not sufficient and that I had no recourse.
That, I think, is the thing that most offends me: that I should have no recourse. I haven't the resources to sue on my own, so unless I can join a class action I have no means of redress.
From Debra Ferrara,Scotia,N.Y Credit Cards are the cause of the economy going soar and until it's governed there will not be a come back to the economy.If small biz can't use they will faulter period.The boy and girl nextdoor are paying all the paychecks to the credit card companies as min payments so whats left to spend and boost the economy?
From Mike, Phoenix, AZ It's absolutely ridiculous that these credit card companies and banks can take advantage of us for doing exactly what we are suppose to and that's pay our bills on time. Where does it end? Credit Card Complaints
From Tom Psillas, Hartford, CT I read the above comments and have to ask:
How stupid are Americans?
In Greece, the birthplace of democracy, the people do not put up with this crap.
Maybe if all Americans stop paying taxes and invest in small businesses, rather than the stock market, the message will become clear; We will not take this anymore!
We should force Congress to pass a law making all credit card interest a direct Tax credit.
From Pat Livonia MI You can make a purchase for less than you make annually or hourly, and be comfortable with the interest rate being charged, but since they can go back months later and change that interest rate for NO REASON how can planning remedy that?
From An Huy, Patterson, NY I just came upon a new technique JP Morgan Chase Credit Card to extort money from me!!! I have a 3.9% offer for the life of the balance, so I have been making my payments on time on all my credit cards, so technically, they have no valid reason to take that rate away from me(but obviously they can change the terms of the contract any time they please). SO HERE IS WHAT THEY DID…they are charging me a $10/month offer maintenance fee and double my monthly minimum payment. Where does it end? an arm and a leg?
From Joanne G Murphy, Skokie, IL It is a damned LIE that every rate hike is preceded by an informative mailing that offers the cardholder an "opt out" possibility (i.e. the option of closing the account and paying it off at the old rate). Some companies are hiking rates willy nilly and won't even discuss it with you—even if you have NEVER been late or closed out your cycle overlimit. Many banks simply hike the rates on balances carried on accounts that have been closed for YEARS (this has happened to me several times) and naturally, our noble "legislators" are all in the pockets of the banking industry so they won't lift a finger. It should definitely be illegal to hike the rate on an existing balance!
From Jeff, Phoenix, AZ Tracy in Sacramento: Yes, they DO want to raise their default rate. While they'll never officially admit it, those who are in an endless cycle of payments who can never get out of it are the ones they reap the most profit from. While it's not a crime to offer credit to someone you KNOW can't pay it back, it is definitely unethical.
College students, low-income families, and anyone trying to use credit cards to "make ends meet" falls into this category. Not everyone is a spendthrift, though there are many out there. People are naive and careless, and in most cases anyone who doesn't think it's important to be savvy about money in a Capitalist society is a victim waiting to happen. The quickest way to eliminate credit card problems is educating the public, but it's long and slow, and some just plain don't care.
From bill carlisle, oh mine r maxed out wamu, cap 1 my rates still around 9% fico 525
From Phil, Denton Texas Check Out "Privacy Assist" At Bank of America. You should find some good answer's to your questions.
From Lindsay, Indpl,s IN Yes, some of these Credit counselors do work! I would just check to see if they are a credited member of the Better business bureau first. I currently pay my Chase credit card there. I pay a 7% interest with them, verses a 31.25% interest with Chase. I got in debt because I wanted to go to college and better my life, but all it did was get me into more debt than what I could afford. All because I couldn't get financed because I didn't have solid employment history, and my parents whom are upper middle class made too much money, but how can they put two kids through college at the same time the way the economy is.
From M, Kansas City KS Dear Bellavon New Hampshire, you are not alone, I made my payment online on due date (Saturday), the "System" could not log my payment due to "technical" issue, so it logged in on following Monday (late), went from 9% to 20%, then after explaining the issue and said I was very "upset" with BOA, the lady said "Sir, I can see we are going in circles on this discussion" and simply hung up on me. I fired off a letter to the bank and CC'd my congressman. Good luck to all.
From Deni Cape Coral FL I have seen credit card companies throw credit cards at people like around Two to 20 and they expect that they don't use them. My new attitude now that the USA lent money to banks fir 0 interest is that if everyone who owes money to the banks in credit cards as a result of the bank not being caucious with lending defaults we just need to see more banks close up. Banks are not GOD and they should not be treated as such but one thing for sure the US should not bail out these irresponsible businesses.
The same go to the automotive industry,can't bail out social security but we can bailout bad business, keep on printing.
It looks like we will have a new president who is being forced to fail on his original policy.
Welcome to the real world of Washington.
From Dennis Cape Coral FL You will be penalized for making such payments nothing less than a call from a rep telling you to stop
Good idea but not like a mortgage
From David, South San Francisco, CA Recently, my Jan. 5, 09 statement from Lowe's, home improvement center, stated "ANNUAL PERCENTAGE RATE: 43.415%" and "2 payments due" (not received). It turned out that Lowe's missed to post two payments made and, upon inquiry, confirmed one payment but on second payment, still needed me to mail in copy of check & receipt issued by local store where payment was made. They could not track down anything with the store and transaction number from the receipt over the phone.
The question is whether this rate of 43.415% is legal and if so, why not couple of million percent to keep me in their debt forever?
From don Eylat,Va Beach, VA Congress has protected its members by self serving legislation and recalls are nearlyimpossible. Think of Governot blogonovic: H'ellwill be impeached but I don't think he'llbe removed unless "they"(the politicos whwant his lucrative position) manage to prove a conspiracy. This dastard actually only tried to commit a crime but stopped or was stopped in time, so he's not guilty of a crime only a breach of ethics and if you followed the presidential debates you myusthave discerned the general lack of ethics in all contestants, bar none
From Don Eylat, Virginia Beach, VA Or government inot"that dumb"it is that corrupt. Mtter of fac itis more corruptthan the Soviet Union under Brezhnev who is,rguably the 'un-leader' who brought down Boshevism. We keeo electing and idiotstht we arecollectively reelect bozos who do not our wotk nd we not only overpay them when they fail to even dshow ut we have fiven them the power to overcompensate themslves without our pproval or even input. Our forefathers went to war gainstthe english because of taxation without representation and we have sunk to a far worse domination by the dishonnest representatives we have chosen for ourselves. about crsdit cards:it is high time that our supreme court examine usury praticesand the lack of laws and finf ways to coerce our do nothing good Congress to pass Federal usury laws(I already hear State rights advocates bekky aching!)I clain that any rate over 6% is usurious and as much as I depise Islam, these people have a point in baning ALLinterest period.I would not advocate that but instead gat a corruption law on the books, a law that would ban any contribution or gift to members of Congress, not even a pencil worth a nickel and charge both gver an receiver with bribery felonies. drstic, yes but nowhere nearly as nefarious as the free forall thieving credit card companies getting away with the plucking of the citizenry
From Charles, Hickory NC Actually, I have a credit score well above the 800 mark, and quite honestly had some cards sitting around that I never used, like cards from GE Money Bank. These cards were automatically closed, without notice to me, and when I went to use my pay pal buyer credit, I found out my credit had been reduced from 1500 to 124.00. Such an odd amount, I thought it was a mistake, and asked them about it. GE Money Bank said that no, upon review of my credit they lowered my limit, because I had maintained a high balance, they neglected to notice that I paid that balance OFF every month, and therefore, never maintained a High Balance at all, in my humble opinion. I was punished for paying my bills off, on time…instead of letting it sit and accrue interest, which was their hope. I have since moved my business model to a model that does not rely on credit, at ALL. The sudden loss of 4 of my major credit cards, actually seemed to raise my available credit limits, as I am now being offered or given cards with a min of 8,000… so them dropping my account down to 124 dollars makes no sense to me, but I'm not a banker, so I'm not on the unemployment line yet.
You know how to get an investment banker off your front porch? Pay him for the pizza. 
From on Eylat, Norfolk, Virginia I use my credit card for all muy purchases and hsave for years and I always pay the balance in full, have never paid a penny in interest but Chasehas called me repetedly to lower my interest rate and thretebed me because I refuse to respond.I bwlieve that ALL credit card companies's top management aecriminasls who belong in high security prisons for LIFE:They are sabotaging the eonomy and the attemps tto fix the problems.I've come to believe that we need ourown Hugo Chsvez to elliminate these scoundrels(I'm being polite)Too bad we dont apply the death penalty for such crimes against our country:These monsters of greed deserve the gallows.
From John, Wiggins Ms I have heard of one trick to paying off a credit card without as much intrest. About half the intrest I have been told. Make the regular payment but pay half every 2 weeks. The intrest is compounded daily so there for it screws the interest rate all up when you do that.
From Alejandro Sandoval, Mesa Arizona Are credit counselors really helpfull? i wasnt able to make any payments for months and im almost into collections with the Bank Of America Credit card ive had for 2 years. I dont want me being laid off mess up my credit. So id like to know if these credit counselors are worth it.
Peace,
Alex
From John, Wiggins Ms Thats the way the world works now days. Know one wants to except responsability and point fingers in all directions except where it should be pointing,"YOU". Know one twisted your arm and told you to buy things you couldn't afford. Just admit that you are the one that made the mistake and just learn from it. You cant say you made bad grades becouse the teacher couldnt teach. You have the tools, WORK HARD!!!!!! and Study it yourself. Its the same principal with credit cards. Duuuuu. Didnt your momma teach you guys to work for what you get and you will get what you work for.
From Linh, Alameda, CA My friend was a victim of these rate hikes. The funny thing is….he didn't even pay the bill late. When he saw his rates jumped he immediately called the credit card company. They simply told him the information was included in his bill and after looking at it closely he noticed it in fine print. BUT by that time it was too late to contact them to close the account. So he is currently paying the new rate and his account is scheduled to close after it is paid in full.
From Steve, California It is NOT the credit card companies fault that YOU can not balance your spending. If you use a credit card to make a purchase, make sure that it is less than what you make annually or hourly. Not very hard is it: look at your pay check and spend less. Don't blame others for your mistakes. Figure out where you messed up and learn from it. Don't complain like the credit card told you to spend money you know you wont have.
From David, Miami FL The group of credit card holders who are likely most vulnerable to interest rate hikes are college students. It is relatively easy for students attending four year colleges and universities to obtain a credit card even though their income is low. When interest rates increase it affects these students more as their debt to income ratio is proportionality higher than the average consumer.
http://www.studentcreditcards.com/blog/
From Davec Kelseyville california We have become a service economy not a manufacturing country over the last 25 years. Th last 16 years the US public has been living on credit and at the same time voting for those who are destroying the US economy (democrats and republicans). There are 6 people who ran for the presidency in 2009 and most people only know two of them. They are the two that are completely bought by the rich Republican and Democrats and so it is no wonder that they get alot of media attention
From Gimme a Break, Puget Sound,WA The ROOT of this problem is CONGRESS: both Parties (Dem & Repub) take TOO MUCH MONEY FOR ALLOWING banks to screw the pants off you. As to reducing availability of credit – the banks want/DEMAND you get all the credit you can choke on! Flush the 20, 30, 40 year career thieves in Congress in 2010 and 2012; Barney Frank, Chris Dodd, Hairy Reid are the best to flush.
From Nola, Pottsville, PA Irresponsible spending is the root, not the credit cards; they are simply contributing to the problem. Too many people have thought for too long that just because they want something they can't afford to pay for right now, they should be able to get it, and so they overextend themselves financially and then cry about the problem. If you can't afford to pay cash for something, that means you can't afford it. Blaming someone else for taking advantage of your stupid decisions is irresponsible.
From Tanya Credit card companies are the root of our financial situation. The interest rates on it's current consumers is astronomically high. This is just the beginning. I will pay off my credit cards and then cut them up…never will I use them again forever. If we all did the same, they would go out of business. Just don't use credit cards again. USE CASH!!
From warren, la jolla, ca. I experienced the same problem with b of a. I made a $9,000 one time payment to reduce my credit card debt.
b of a showed their appreciation by reducing my credit line to what I owed and raising my interest rate from 9 to 29 w/o warning letter. I called everyone I could think of and was told can't be change. Then a friend told me to call the retention department at the same 800 number. They reviewed my account and my credit bureau and reversed everything and raised my limet another 10k. Case by case basis.
From George, Rochester, NY If I do use a credit card, I pay the balance when the bill arrives so there is no worry about rate increases. It is a shame to see unfair business practices from any business. Imagine how much the banks would lose in revenue if we all paid cash. They make 2-3% of every sale paid by credit/debit card. Retailers pay this fee for every credit card transaction that is likely passed on to the consumer in higher prices. I remember when you could get a discount for paying cash. Now stores give discounts for using their store credit cards. Do yourself a favor. After your purchase made using that store card to obtain a discount, get back in line and pay the balance.
From ray, sarasota, florida I have lived without credit cards for the last 20 years. I was issued a card by my company, who took usually 6 weeks to pay my expenses–but American Express wanted their money in 4 weeks. After receiving multiple calls at home from AE, I swore never to use one again. I haven't missed them, just use debit card, and live fairly within my means. I try to use my grandmother's philosophy and not buy it if I can't afford it. ( what a concept)…Helps me sleep better at night…
From Anthony Tulsa OK Everybody copy this comment board and send it to your State Represenative.
From Geo. Loda Ill. I guess I am confused, why so much complaining, about cc companies, nothing about payday loan companies? I learned a hard lesson 25 ago about cc cards and that was don't trust them for more than 25 days, use other sources before using the cards and FULLY read the contract, and amendments as they are mailed to you. Shame so many have to learn the way I did with high balance charges, yes they did exist in the 80's too, but I must say that this incident did teach me soooo much about credit handling, that I can now look back and say the experience was worth it. I do hope we as credit users in this world learn more to assist us so that more and more of use will become financially stable and not rely so much on these short term fixes.
From Len, Washington, DC Well, it's people like you, Larry in San Jose, who make responsible consumers pay the outlandish interest rates that lots of people have been complaining about in this chain. Congratulations on your $60K windfall paid for courtesy of American consumers!
From Roy I hope that the new administration reigns in these greedy and immoral credit card companies. They set usurious rates that force people to be late or default. What kind of logic is this? Why turn a good customer into a failed one? This needs to stop.
From Alfer33, Chesapeake VA Like most everyone else I just got a notice in the mail that my Wachovia credit card's rate is going to be raised along with ever other rate that can be applied to the card. Needless to say I'll be paying this card off as fast as I can as the balance isn't that bad and never using it again. Luckily I'm retired military and applied (and just received) a new card from USAA who gave me a good rate as I have a good credit score.
From kmnj I have had it with all these banks, their mismanagement, their legalized loan sharking.
Welcome to 2009- I will no longer stress. I am now going to do things my way starting January.
I will pay off the credit cards who were good to me first & ignore all the rest until I am ready finacially to pay them on my terms.
I need to live and eat & take care of my own basic needs first. Just like the banks have always done for themselves. And if they push me, I will just declare bankruptcy & have no more debt. Case Closed. The credit market is screwed for the next 10 years anyway, so 7 years of my FICO score getting trashed won't really have an impact anyway.
It's now going to be all about me.
From Jaye Reno An effective consumer revolt is for Everyone to STOP paying their credit card payments. They gave capitol One bail out money for God's sakes!! And the credit bureau FICO scores are as artificially deflated as the S&P scores were inflated. If we all just quit playing their dirty little game they deserve togo under and instead we are allowing them to push us under water to save themselves.
From L Fla These banks and CC don't care if you are a good customer or not. Why are they are not required to explain where our bail money has been spent on. The post of people here on this web site are good paying customers that are getting screwed by the banks and CC. I hope Obama goes after these evil CC and banks that only want to destroy your credit at all cost. How can you say as a CC that you asumed that a good customer will default. I guess now they have a crystal ball or are throwing cards to know the future. These CC and banks are now become Loan Sharks…
From Ann Stambo Biden has recieved more donations than anyone else on the hill from Credit card companies as many of them reside in Deleware where the laws give them more flexibility. Also Sen Dodd is a leader on the banking commision. Maybe letters to these guys can help – Maybe not.
From Joey, Ames, Iowa Creidt Card companies are out of control but they have been for years most people just hadn't noticed it. I realized it several years back and wasn't personally having a problem with them but quit using them anyway. You can live without credit cards. Have been for 2 and a half years.
From Frank Vukov ,New York, NY 10006 Advanta raised my purchase and cash advance rate to 37% .Ive never been late or missed payment. Theres gotta be a law Where can I go to protest this.?
From Robert Mehl Congress won't do anything as they are in bed with the finance companies. They would not help auto workers but Wall Street got 700 Million so they did not have to cancel they retreats with $1,000 massages
From Don Jackson See http://www.madashellnetwork.org. You should all check out the growing anti-bank sentiment expressed on that website.
From cl dickinson sparks nv Mom (85 yrs old) was a BOA customer for over 50 years. She had a 12% interest rate. She fell, broke her shoulder, missed a payment (was in hospital under morphine), interest rate jacked to 34% (plus late charge = 64% apr). I tried my best to get BofA to see the light. They would not budge (darn sorry that when she died, with no assesst's, she owed BofA over 10 grand) HECK OF A WAY TO BEAT 'EM BUT….
From cl dickinson Sparks NV They are not morons. THey will jack up your "lifetime" rate. Trust me… they will find a way! I went from 2.99% to 27% (still fighting). Have paid 12 payments in 11 months (where is the late one?) Late charge & interest jack-up now at $550 (yes I am taking them to court)
From ricky,oceanside ca Wanna have some fun people?? Use the following link and let the azzholes at Advanta hear from you.
https://www.advanta.com/ADV/Corporate/CustomerService.page
From Mozart, Florida My interest rate was raised on all my credit cards to over 30 percent!! I cant afford to pay these and eat. I stopped paying so I can eat and I am not alone. Wait until the middle of 2009 we haven't seen anything yet!!!
They stole everything from the middle class Home equity pensions 401k anything they could get there paws on. Remember when it all breaks down you can't eat dollar bills or plastic cards!! Good Luck
From Mike, NYC, NY Larry – you are part of the problem and you credit score will take 7 years to earase the bankruptcy.
How about being responsible with your money and not charge things you can't pay for.
From C. Thomas, Columbia MD Does anyone remeber the movie Fight Club?
Does anyone remember why it was started?
Does anyone remember the end of the movie?
If these companies insist on using they system only to their advantage, then the system will have to change, or be removed.
Our lawmakers can do better, by making the provisions to control the credit card companies' behavior immediately effective, rather than waiting for the companies to scalp us all for a year or more before doing anything about it. And they should check back through the law, with our consumer watchdogs' help, to purge any corporate giveaways out first- and revise as necessary.
This crisis was started as a financial crisis. The credit and banking industries are perpetuating it through their current behavior. We have the ability to limit the damage, if Bush, Obama, the States and Congress all actually want to do something about it.
From Craig, St. Louis, MO I have an excellent credit score. My wife and I live very respectable economic lives. If a credit card company pulls that rate increase on me, they will be receiving their card back, in pieces. Credit cards are a convenience for me. I can just as easily go back to cash and checks.
From Ilya Bodner, Columbus OH Credit cards are going to be just the same as they were last year – hungry for our payments. The bigger problem is that more and more people are going to turn away from paying off their credit cards. And even worse….small business owners will start maxing out. This is a problem because our country is driven by the small business owners, and to obtain small business financing you need to have low credit card ratio.
Very few yet know about strong business credit, but in a few years we should see this push cause a greater increase in business, versus personal credit.
Sincerely,
Ilya Bodner
Small Business Owner
Initial Underwriting Group
From Brady, Boston, MA These rules will basically eliminate all 0% balance transfer offers, I write a blog that compares all available low/no transaction fee 0% balance transfer credit cards, get these low interest offers before they are gone:
http://www.myawesomecard.com/blog/
From R. Keyes, Malden Mass some states have anti-usury laws. Massachusetts is one. See Chapter 271, section 49, crimninal usury, and 255 section 12H. Interest rates, including fees, are capped at 15%. All of these credit card companies are in violation of it and the CEOs of these companies would be carted off to jail – if prosecutors were will to do their job and enforce the law. Credit card companies claim they are not subject to massachusetts law because they do not operate in mass – yet they very much do operate in the state, regardless of the south dakota addresses they use.
From Nishan Urkumyan, San Jose CA They did the same thing to us. After being a good standing customer over 30 years they JERKED us with interest rate hike with no reason. This time they barked on awrong tree. These hard heade need a good lesson. I have sent them a letter, told them paying the darn credit card off, closing my business checking account, closing all my personl account, closing all interet bearing account and closing my CDs and taking the business to anotehr bank. This is the lesson they need, if everybody does the same thing, they will collaps. They know by rasing the interest rate sup for people with a very good credit rating they can get away with, they know we cannot default, but they are not smart enough to understand people with good credit have other alternatives to terminate with them. Basically, I cannot make business anymore wit BofA they have just become a loan shark with their act of doing business in bad faith.
From ben, rogersville, tn It is time to admit it. After reading all these comments, being a small business man and hearing many local stories and expecting this situation for several years, it is time to admit it. Americans have been spoonfed lies, big lies and montrous lies. Believing those lies and looking for a truthful answer to those lies is futile. Debt does not and has never built wealth for anyone except the ones who print the money and give the credit. We are all being taken for a wild ride that will last a generation. Get ready, we are only on the first loop of an odyssey that streches far beyond our wildest fears.
From Angela Birch, Woodland Wa It matters because there are people who are unable to pay every month. It matters because the US congress gave them the right to do this exact thing in the bankruptcy bill, this is an indication of whose side they are on. It espacially matters because when people are unable to pay bills because of excessive interest rates it reverberates throughout the economy causing unemployment, business failures, and deepening depressions. It also matters because I, as a taxpayer have sent them millions in bailout money.
From .Angela Birch, Woodland Wa I have one credit card for emergencies. I carry no debt on it. When I do use it I pay it off withing the month. Own my home outright. Retired with no debt and a secure steady income of over $80,000 per year which more than meets my needs. Citibank raised my rate from 6.99 to 17.99. I called and asked why and they said I was a risk of default. I asked them based on what and they said my over all debt ratio. I pointed out I have no debt at all and their response was that I might incur too much debt at some time in the future and not be able to pay it. I cancelled my account since I haven't used it in 2 years. I am of the opinion they are crooks
From Sapphire in FL. Yea…Ok folks here it is. The credit card business is trying to rack up as many losses as it can, by forcing people to default on the bills. they know that the next big problem is going to be large scale defaults, as the economy bites it and people lose jobs. The card industry is attempting to hasten these defaults so it can whine to the government for bailouts, while there is still willingness to give such bailouts.
far fetched? Of course it is ^_^. But why else would the credit card issuers punish their GOOD customers, as well as the ones who cant pay?? This is a business policy that will result in people just not using the cards any more. The people who use them and pay them off will stop using them, and the people who use them and NOT pay them off will be forced eventually to stop using them…And then what? No new revenue for the card issuers.
I use my cards as a form of small time commercial paper (barrowing to pay business expenses and purchase materials for jobs) If they jerk me around like this, Ill quit using them for this convenience, because thats really what it is. Convenience. I know many people have no option about weather or not to use credit, but many others do. It is these "others" who are the safest bet right now. They have the money to pay, they are glad to pay for the convenience, they realize the card issuers have to survive, as all businesses do…BUT THEY DONT WANT TO BE JERKED AROUND. Jacking the rates for good customers up by 10 percent without any reason is called JERKING THEM AROUND. TO THE BANKS: TRY THIS ON ME AND I WILL CUT UP MY CARD THAT I HAVE HAD FOR 20 YEARS SO FAST YOUR HEAD WILL SPIN.
And then where will you be?
From Nance, Moorpark, Ca. Ben, what did you do then? That's what started happening to me yesterday. I called the BOA "Help Line" to see what options were available so I didn't have to hire someone to tell me, and they closed my accounts! I've been a customer for 40 years, have a good credit rating, paid on time, over minimum, etc. I don't know which way to go now. What did you do? I run a small luxury business and have had an injury, my husband was forced into retirement,and we're trying not to go under in this economy.
From PT, Evansville, Indiana I was on the board of a non-profit that found itself with a non-authorized Advanta account that had been taken out in the group's name by a manager. If you want sleaze, jacked-up interest rates, and arrogant, unhelpful employees, Advanta is your company. Thank God we are now rid of them.
From Bobby, Palm Coast, Florida Advanta also did the same thing to our small business card. We went from a Fixed 7.99% which was a purchase using a convenience check supposed to be that fixed rate for the life of that balance, to 28%. We were carrying a relatively small balance. We immediately transferred it to a new Discover Card at a Fixed 3.99%. We'll see how long that rate lasts!
From Anne, St. George, UT WAMU is the worst of all my credit cards… and the really sad thing is they won't work with you… they keep tacking on more fees and higher interest! Just a few months ago I had a good credit score (over 700) – now thanks to these banks and their unregulated tactics my score has gone down and no fault of my own!
The new bill is great – but to late if you ask me… how is it going to help those of us who have already been subjected to the criminal practices by the banks!
From Tony, Long Beach, Ca. Hi Bonnie, I really got into it with Advanta. They raised my rate to 37% because I was several days (not 30) late. I hoppe people just stops paying them. Then what? Tis is wrong!
From Tony, Long Beach, Ca. This is so unfair! I have an Advanta account. The way I found out about my interest rate increase to "37%" was on my statement! I was a week late with the payment. NOT 30 days! There is no way I can pay off my balance at that rate! This makes a person opt in not paying them out of frustration. I'm not there, YET!
From Sean, Jersey City, NJ One thing people should also realize is that credit card companies make money even on your 0% promotional purchases. They charge (I think 5%?) to the company that accepts your credit card for payment. They make money on both ends.
They take into account human nature/behavior on their predatory rates and fee policies. They also use that against people in the way they disclose information.
I would love to see an actuary assessment of the current credit card industry which include reasonable adjustments for profit and growth of capital. Has anyone done something like that for the public?
From Bonnie Maine Advanta did the same thing to me, they just keep upping the interest rate, mine right now is at 35.81%. Best part is though, I have a lock in convenience check with them at 6.90%. It said for as long as I owe it that rate will stand!! So far, so good!! As if I would use that card at that rate!! They just hurt themselves, the morons!!
From Robert, Dallas TX It's worse than loan sharks – legalized robbery…..and we wonder why folks are in bad shape in the world. It's more of what the banks and wall street have been doing for years – CALLED GREED…..the folks with the money have the power….No real way to payoff a credit card with more than 15% interest rates. It's called usery. Arkansas limits such stuff.
From Arlington Heights, Illinois What the credit card companies are doing to its customers is what the MOB used to do. Just because they don't use a gun or break your bones does not make it any more palatable.
From Liza One of my Bank of America credit cards went from 2 to 18 per cent because the low interest offer expired. Unfortunatly,I am no longer working due to an illness. I called to see if they could reduced the interest rate for a few months and they told me that I should talk to a credit counselor. I told them that I always pay all my bills on time and have had no credit problems and going to a credit counselor would be silly since my credit would rocket down. They told me that since I was not working my debt ratio was way to high thus they would keep it at the high rate…Again I told them that it would be challenging to be making those high payments right now and they basically told me to hit the road. Since then I have gotten several new checks from them urging me to take a vacation and just write the check…what is going on with this companies..maybe I should write the check and tell them to sit on it when the bill comes.
From BellaVon, New Hampshire My BOA credit card just jumped from 7.9% to 29.9% because I was one day late ona payment that's due date was pushed ahead do to Thanksgiving. After talking to some very rude and unhelpful "customer service" reps, who claim NO one has the power to reverse this, I ended up just crying. I never wanted credit in the first place, and all I bought was heating oil and gasoline out of desperation. Now we are paying for it and at this rate, no consumers can ever ever EVER pay off their debt.
From Eaglejay,PA. "These protections will allow consumers to access credit on terms that are fair and more easily understood," Federal Reserve Chairman Ben Bernanke said in a statement.
So are you admitting it wasn't fair?
"The Board has given banks another year and a half to continue indiscriminate interest rate increases on consumers with historically high credit card balances. When they can least afford it, cardholders will be vulnerable to the piling on of unconscionably high finance charges. This may be the straw that breaks the camel's back," Sherry said.
Plunkett said he hopes Congress will pass more sweeping credit card reforms next year that address a number of other "abusive practices" including "reckless lending to young people and high fees."
So where were the feds PRIOR to this crisis? And let's not blame 1 political party, they're ALL crooks!
I call it legalized stealing with the approval of the federal government.
The credit card companies have had a license to do just about anything less taking you in a back alley and working braking your kneecaps in a back alley.
Oh,I wonder if I was late with a car payment would my electric rates be raised?
From Elon M., Phoenix, AZ After being a loyal, responsible customer for 10 years and you have to go through that? Has our society sunk so low? Don't bother answering that, it's apparent that business is just another word for criminal activity.
Let's see if we can slide this 5% rate increase in on this guy. If we're lucky and he isn't paying attention we're in the clear, more money, more money. If he is, we'll say we're sorry and drop it back down. Give me a break, is that how most people expect businesses to behave now days?
From Elon M., Phoenix, AZ And the moon is made of blue cheese.
From Elon M., Phoenix, AZ The bad thing is the credit card industry and the banking industry are one in the same. All that bailout money was supposed to free up credit instead they're just evidently pocketing it, probably giving a little back to the politicians for helping them out.
From Elon M., Phoenix, AZ As much as I don't want to see anyone lose their job you and people like you are prime candidates for job loss due to outsourcing. In case you haven't realized it "real income" is a disappearing thing in this country. One thing for sure is, if you do your job sitting at a desk pecking on a computer or talking on a phone it can be sent overseas just as easy as so many manufacturing jobs have for less cost to the company. There are wonderful multi billionaires like Bill Gates, who don't have enough money already, screaming how they need more H1B visa workers. That is tapping into a cheaper college educated group of workers. Why hire expensive U.S. grads when you can get cheaper foreign ones who can do the same job or better? The same song and dance that's decimated the blue collar manufacturing workers.
From Elon M., Phoenix, AZ Open your eyes and read Steve's statement above. It isn't always about people buying things they can't afford for the hell of it. There are quite a lot of people in our wonderful economy who are literally having to survive by their credit cards, as sad as that is.
From Larry L. San Jose, Ca. Well – I am stopping the Bastards (Credit Card Companys) in their tracks. I am filing a Ch 7 BK AND SHEDDING OVER $60K IN Credit Card debt. Serves them righ for jacking my rate to a point that I was no longer able to make the payments.
My attorney and a credit counselor says that I will be able to re-build my credit score back to the low 700's within 2 years
From Elon M., Phoenix, AZ You hit the nail on the head! Isn't it amazing how blind and/or ignorant some people are? I think they must be the type of people who have a "look at me, I'm so perfect and wonderful" syndrome. What these companies are doing is way out of line and disgusting and only an idiot would be defending them. And look at all the people here defending them.
From Elon M That doesn't bother you the least bit? Frankly in my opinion if you kept that credit card you're an imbecile.
Some guy walk up to you on the street, sticks a gun in your back and demands your wallet. Out of the corner of his eye he sees a cop so he puts the gun away and tells you he was just wanting to see what he could get away with. He walks away and you let him. Hah, unbelievable.
From Elon M Some people evidently didn't lose their job or at least are too dense to realize the possibility. Then again only some people are so smart and wonderful and have to come on here to boast about it.
From Diane Daniels, Rockwell, NC Citi just sent me a letter stating my interest would increase from 8.99% to 15.99%. I have never been late, and pay my balance in full every month. I'm outraged even though it costs me nothing paying that way. I'm reading the fine print, watching for them to sneak in fees to get me. Consumers need to be told; you can opt out, your rate will stay the same, but you can't add any charges to the card.
From Dee Royston, Sacramento, CA By waiting to implement these new rules till 2010, the new rules are completely USELESS. In the past week, a card my husband and I have used for over 30 years, charging and paying back thousands and thousands of dollars raised our rate to over 20 percent, as did another card we use regularly– on this second card, we charge up a few thousand and PAY IT ALL OFF within a month or two on a regular basis. At the time of the raising of the rate on this card, our balance was ZERO. For the record, our mortgage is fine and we owe less than 1/2 what our house is worth, even after its huge decrease in value.
If they are doing this to us, the credit card system is broken, and the credit card companies will destroy what is left of the economy. I think every penny of the bailout money that went to these banks should be repealed–the money was given to them to make credit more available, NOT less.
CNN…please keep up the reporting on these issues.
From Elon M That is plain ignorant! Tell that to the person who just lost their job and is in panic mode doing everything they can to save what they have. Oh yea, and isn't as smart or wonderful as you. Wake the hell up.
From Dee Royston, Sacramento, CA By waiting to implement these new rules till 2010, the new rules are completely USELESS. In the past week, a card my husband and I have used for over 30 years, charging and paying back thousands and thousands of dollars raised our rate to over 20 percent, as did another card we use regularly– on this second card, we charge up a few thousand and PAY IT ALL OFF within a month or two on a regular basis. At the time of the raising of the rate on this card, our balance was ZERO. For the record, our mortgage is fine and we owe less than 1/2 what our house is worth, even after its huge decrease in value.
If they are doing this to us, the credit card system is broken, and the credit card companies will destroy what is left of the economy. I think every penny of the bailout money that went to these banks should be repealed–the money was given to them to make credit more available, NOT less.
CNN…please keep up the reporting on these issues.
From Bozo The Clown The amazing thing to me is the number of people who respond in favor of these greedy bastard credit issuers. I pay what credit balance I have off every month, so you can definitely say I'm not spending what I don't have. My bullshit credit rating is excellent but I'm beginning to wonder why I even bother. Regardless, what these companies are doing is disgusting and criminal! To all the jerk offs saying the problem is strictly the card holders you need to get your heads out of your butts. There are quite a lot of people who are only surviving by their credit cards due to our screwed economy. Lets outsource more U.S. jobs so some horse shit company can be the darling of the den of thieves, Wall Street. After all some companies profit margin means more than the shape of our economy and country. Personal gain over country sure ain't very patriotic, I guess there aren't as many patriots as there claim to be.
From G from Tucson, AZ Joe from Milwaukee has it right. We need to send thousands of e-mails to the Obama organization protesting the "loan sharks" that call themselves banks and credit card companies. Our country desperately needs credit card laws like they have in Canada; that force the companies to have rates that are reasonable and just.
From Ema, EGF, MN Not only are credit card companies raising your rate if they deem you a default risk but if you do the right thing and turn down a credit increase. I tried to do this in 2005 when CitiBank increased my limit to $16,000+. I wrote them a letter turning down the increase they wrote saying call us and we will return your card to the lower limit.
I called and got swore at, called names and told if I still insisted on rejecting their “kindness” they would ruin my credit rating. I insisted. I did not want nor needed the increase (my only income was welfare payments for disability of $500 per month). They never decreased my limit and I stopped using the card and in 5 months they raised my interest rate from 12% to 35%. The interest alone was more than my monthly income. I called them and got laughed at for being so “stupid” I should have kept my mouth shut about the increase and do as told and use the card and none of this would have happened. Within a year the company had the card over the limit with charges and increased interest (I did opt out each time a change was made) and now in default. Over 65% of what they saw I owe is punishment for “not accepting their kindness” as told to me by the last operator I talked too and there was no “higher management” person to get me out.
The hard part to accept is that Congress has given Credit Card companies the right to do this. And then bailed the company out for their stupid business practices.
It is legal "loan sharking".
From Larry, Tucson AZ "The Federal Reserve Board, the Office of Thrift Supervision and the National Credit Union Administration approved the regulation…" My question is why do they have to wait a year and a half to activate the regulations. We need help NOW. By 2010 we may all be broke. I just got a notice from B of A (Crooks of America). Effective February 2009, the rate will go from 9.9 % to 20.9%. The notice said nothing about the option to opt out. Well, you can bet that we will OPT OUT. I hope that everyone that gets such a ntoice will OPT OUT. If we all did that soon Crooks of America would be out of the credit card business.
From jerry, bristol ct Bank (Crooks) of America did the same to me, they wanted to change my rate from 7.99 to 23% and I have never missed any payments on any of my CC, I send them a letter telling them to go stick their rate were the sun don't shine. Next month I get my bill and guess what , its 23%, thank god I send the letter register mail with proof signature, those low lives had to change it back. If I had not kept that paper work, those jerks were not going to change it.
From Tina Emilia Why would you call someone that used a credit card that 'guaranteed' a fixed rate at 7.9% and then got jacked to 20-30% through no fault or action of their own a whiner? If you took out a loan for a car at 5.9 and then your bank said oh we decided you should pay 35% interest… if you didn't like that would you be considered a whiner?
From Renee, NY, NY I have credit card debt due to medical expenses that I had no other way of paying. I resent people assuming that all credit card debt is due to irresponsible frivolous shopping.
I could not predict that I would become ill, and even with insurance, the cost was incredible.
Some people here need to open their minds a tad more and a better understanding of why many people go into debt.
Not all of us go on shopping sprees!!!!
From MB Billings MT How many of you have written or called your congressmen about thes abuses …. beat on their doors untill they aknowledge your complaints.
From CG Dunne, Milwaukee, WI Steve from Edmondton, AB CA – I'm moving to Canada! No Brainer!
From JG, Marietta GA It isn't about the big bad companies forcing people to go to stores and buy stuff, it is about those same companies raising interest rates and locking down on people that actually never miss a payment.
They give people credit at a certain rate and then punish them for using it. This can force some people into a situation where they can't pay it. Then the card companies will charge late fees on top of the extra large interest rate. They could pay it just fine with the original rates both parties agreed to, but not after the rate is tripled.
The problem is, these credit companies have absolutely no accountability and can do what they want. They are just like adjustable rate mortgages and take advantage of the same people.
From Tyler Durden, TX This should come as no surprise. I've heard stories where the act of purchasing particular products or shopping at a particular store flags you as a potential risk for future default. These banks invest millions of dollars into data analytics that find a relationship between buying a wifebeater t-shirt at a Tenessee Walmart and never paying your credit card bill.
From Ron San Diego, CA I think there are a lot of things aboout Canada that are much better than this wonderful "capitalist" arrangement in the US. Here, only the rich get richer and rest of us can go pound sand.
We are getting ripped off at every turn.
From Susan, San Diego, CA We are a small business company, paying our credit card on time and we also got hit with high interest rates. The only choice we have is to pay off these cards, which at this time we will not be able to.
The thing that bothers me most is that the taxpayers bailed out these financial institutions, then turn around and squeeze the same taxpayers to the ground with high interest rates. What is this?
From Tracy, Sacramento Metro, CA WRITE to your representatives, please! The credit card companies are taking bailout money to "increase liquidity" and responding by reducing limits, raising rates, and otherwise REDUCING liquidity. And now, as they push peoples' credit scores down (by lowering limits, making the "credit utilization" ratio soar) and tick off the best credit risks, their default rates will continue to rise – justifying yet another bailout.
If you don't want your tax dollars going to support profits at credit card companies, write to your representatives. Tell them what the credit card companies are doing. Tell them that you'll remember their votes on these issues when you make YOUR vote in the next election.
My credit score was over 800 when citibank lowered my credit limit for "underutilization." So I closed the account. They're right – I don't use it. But they pushed a customer out the door, who has repaid them every penny for 17 years, who has a combined net worth roughly 200 times the credit limit with a debt ratio of .06, who doesn't carry a balance. It's like they WANT to raise their default rate. Why would they want to raise their default rate? Can you say "free government bailout money"?
From Doug-Salem-OR You say "Raising your interest rate at any time, for any reason, is perfectly legal".
It might be legal (which is the real shame), but it is far from perfect.
From Mike, Deposit NY Kudos to John! I am glad some people remember this!
From david, st pete fl Welcome to the club! AMEX took away 70k of our available credit with no warning. No lates, 700+ score. What they are doing should be against the law. I wrote a blog with some things I did to fight back:
http://amexcreditreduction.blogspot.com/
The funny part is they are also asking for BILLIONS from the bailout bill. The same bill that was passed by congress to INCREASE lending!
Once again, they little people get the shaft, while corporate america gets a bailout. Shameful. Shameful Shameful.
From Kevin, Debt Free in Illinois 2 years ago, I was nearly $20k in credit card debt. Today, I have NO credit cards & pay for everything in cash. I won't ever borrow money again… if I don't have the cash for it, I won't buy it. This economy is rough, no doubt. But when you're debt free, you can coast through without panic. Get an emergency fund built up, pay off your debts (sell stuff if you have to!) and save up for the things you want, budget (on paper) for everything & start telling your money where to go. You can do it… most definately, you can!
From Jerry // Ohio With a ton of medical bills and 2 kids in college…Bank of America was raping me, so I sent 2 letters…help me with lower interest rate or I would stop paying. They didn't; I did.
From Dean, Mechanicsville MD "These people are robbing America of everything and no one is doing a thing."
Yes, the big bad credit card companies forced people to go to the stores and buy stuff that they couldn't afford.
From Dave, White Plains, NY I too had a little run in with Advanta.
Running a small business cash squeezed lately, I acquired a 7.9 % interest rate card from them. I think in the last year and a half, I had one payment a few days late and an overall solid credit history.
Recently I got the letter telling me that they were cranking up my interest rate to almost 30%.
I called – got the standard BS, that I am likely to default. poor economy, etc. In almost 20 years of business, I have never defaulted on anything – crazy for them to say this. Even crazier is that my monthly minimum payment about tripled as a result. SO the theory is – if a business is in trouble lets make their payments higher – could be a self fulfilling prophecy.
That said, knowing that I had in fact accidently sent a payment in a few days late (when I did they told me not to worry)and that they had the right to do anything they want, I tried to negotiate with them. Nothing doing they would not split the difference or even take off a few % points, nor let me talk to anyone with any decision making capability. Thats the absurd part of the system – it seems there is no real service going on and banks will do whatever they can legally get away with.
Fortunately, I still have very good credit and just moved the balance to a 0 interest company and closed the Advanta account.
As for all know it alls who say the only way to use credit cards is to pay off the balance, that might work for you, but dont be smug about it. There are people who take risks and make business run in this economy and often times we have to lean back on some credit that if it was not there – would make survival tough. The problem in is the credit card companies make those risks even tougher to try anymore.
Other are forced by personal circumstances to use credit – stop judging.
From JOHN , WHITE CLOUD,KS Before credit cards, every freaking store in town let you run a ticket, or had charge accounts. Even the likes of sears.
Hell people even took out bank loans for washers, dryers and such.
So dont tell me that "before credit cards" People only bought what they could afford. thats crap.
Credit cards allowed people freedom from local store owners and local bankers that took pleasure in controling what you did or did not have in your home.
From JDR, Orlando, FL Not everyone spends money they "DON'T" have!!!!! It's called building credit!!!
From JDR, Orlando, FL My girlfriend just went through the almost the same thing last year. She had a Visa card with Fleet Bank with a "fixed" rate of 7.99% for the life of the card, and this was true for about 25 months, until Bank (Crooks) of America bought Fleet Bank. Although, she was never late on any payment nor did she ever go over the limit, Crooks of America decided to change the rate from a fixed 7.99% to a variable 17.99% and it just continued to go up from there. They stated they sent her an opt-out letter, but neither one of us ever saw this letter. So, to make the story short, she quit paying them and their ridiculously high rates, and filed bankruptcy. Now, we will go hungry before we ever have another credit card!!!!!
From Jim, Fort Worth, TX I can't believe waht I'm reading! One writer talks about being a "lucrative customer" of the cc company. HELLO! That means THEY are the ones making the money! How about WE make the money. Try this….Citi (among others) sends special offers all the time. We like the airline miles, but there are options. So about once or twice a year we ditch our card and sign on to a new one, get 25,000 free miles (enough for 1 round trip ticket) and ditch that one before the first annual fee payment is due. We pay the full balance every month….never a fee, never any interest and never a late payment. Just one or two free airline ticket each year. Then, we charge EVERYTHING and I mean everything! Every dollar is another airline mile. I think you can do the same with a cash back card. Just don't spend what you can't pay back at the end of the month….you know, like if you didn't have a credit card and had to use cash….oh my God!!!
From John, Detroit MI I agree that we must live within our means, but I think most people have come to accept some level of debt. Most people have car loans or home loans. Why is it so different to have credit card debt. My wife ran up credit card debt while going to graduate school. Is that a bad investment is that living outside her means? At the time it was 7.9% now we are being told it is going to be 28%. What if the bank did that with your car payment?, or your house? The banks are complaining about the amount of people who are defaulting while they are doing this to their customers.
From Frankie,San Diego,CA. I called Advanta after my rate went from 7 to 27%. No notice. I called and just got the runaround. after reading articles like this one I learned about opting out, when i checked with Advanta they said ya, but you only have 15 days and my dated passed. I have excellent credit have never been late nor gone over my limit.
From Dartanon, Eunice, NM From what I have heard so far. I can't understand how the government can call there actions "Cracking down on banks." Waiting till 2010 will surely give them sufficient time to change all there "screw you" sceems. I can't believe this cra…..
These people are robbing America of everything and no one is doing a thing.
From Ted, Boston, MA Once upon a time, people only bought things they had the money to pay for…say what you want about the system, but if people only made purchases that were within their means to begin with, "debt" would not be as big of an issue as it is…Americans shouldn't buy things simply "because they can". Sure, credit allows us to put off payments for things we purchase today, until tomorrow…but when tomorrow comes and the balance is due, it suddenly becomes an issue…pay your bills people
From mark, huntington beach ca Here's a novel concept- don't spend money you don't have. "It's not my fault" is what got us into this mess in the first place.
From Steve, Edmonton AB In Canada, your interest rate is fixed and they cannot jack it up. Payment dates are fixed and do not change. If you have a line of credit, it is usually 1-2% above prime. There were laws passed in Canada to protect consumers from the practices people are complaining about in the States. The problem is you let the fox guard the chicken coop. As long as the credit card companies pay off politicians to let them get away with these practices, nothing will change.
From Stan Spolowich, White Haven,Pa. Not carrying a balance may not work either. There have been numerous reports of cards being cancelled when customers pay on time and pay off balances each month. Banks have taken federal bailouts and their credit card operations should be more closely regulated. Why are they permitted to charge loan shark level interest rates when treasuries are going for less than o% interest???
From ganymed7 can it be that the whole desaster in the economy is part of a scheme?
can be people sitting in representative positions really *that* stupid?
i know many would answer with a yes.
and maybe that is true – but maybe if you allow lousy rules, it all
will come to that where it is now – sooner or later.
be aware, it is a multinomial failure: politicians,representatives of the economy and "independent" rating agencies etc etc ..
and maybe it is all true – and it should look like an "accident"
sure, this is not the first crisis – but almost all state-of-the-art
companies equipped with modern computers and fast information in real-time are failing .. ?
it is a well-known scheme to let parts of the economy collapse so that
they become virtually worthless, then you can start buying them.
Not by "you* of course, that would be too obvious – but using companies
which behind 10 corners are owned by you. It would take years to find
that out.
forget national "proud" … they just use *your* proud to achieve what *they* want
From G Bryans, Ventress LA Opt out of the interest rate hikes, your card will die on it's expiration date, and switch to cash.
Your business may suffer, but your bank will die!
After 27 years of spotless (and profitable for the bank) use of my credit card, I did just that.
I got a return call begging me to come back as a customer – too late.
From Linda Morgan, Los Angeles, CA WE THE PEOPLE, need to take our credit back into our own hands, WE THE PEOPLE need to send a message to Credit cards Companies that w/o us, there's no you. WE THE PEOPLE need to skip a payment in January to send the message that lowered interest rates is demanded not requested anymore, WE THE PEOPLE need to take a stand for all Americans.
From Sam, San Antonio Texas Another Credit Card to watch out for is the GE Money Bank Chevron/Texaco card. Chevron Credit Bank, the original card I signed up with, has been sold or renamed GE Money Bank. My intrest rate was increased from 15.99% to 30.99%. When I called GE Money Bank to request a lower rate, I was simply told "we do not currently have the tools to reduce interest rates". I have since close this account.
From Albany NY I know everyone is looking to blame the credit card companies for high interest rates and this so-called scheming. I don't support the un-ethical strategies these companies use to drain our wallets, however people can't blame them. I for one recieved a letter from Discover Card, along with my friend who lives close by. We both always pay on time, never over spend our limit and have great credit ratings. This letter looked like every other CC ofer you recieve in the mail, no "urgent" message on the envelope, nothing. That letter which both of us failed to read, stated our rates were to jump from 7.99% to 14.99%. Two months later we were both shocked. We both called and successfully reduced our APR.
I didn't blame them… I agreed to the CC rate, and terms, even if those terms were rediculous, and I failed to read the letter they sent me.
I have since paid off my balance and canceled the card. I took out a personal loan from my local bank for 10,000 with a FIXED APR, and use my Debit Card now in place of the CC.
These companies are going to try everything to make a profit, and as long as they have customers willing to accept these rediculous terms, they will continue to enforce them. Pay off your cards and take out a bank loan. At least you will know exacly how much you owe each month, and when you will have it paid off.
Eric R.
Albany NY
From Rob, Carrollton, VA Just a question about this. Why do you care what your interest rate is if you pay your balance in full at the end of every month? Doesn't pass the common sense test if you ask me. I didn't really know what my AMEX rate was until I just looked it up online, it's 16.9%. That's a little high, but you know what, I don't care, because I do pay my balance in full. I have two cards and last year I paid a grand total of $87 in interest to the cc companies. That's how you control credit, not run up bills you can't afford to pay and then whine and complain about the rates.
From dave, orlando, FL once the "hike" exceeds 11% fixed APR one can, and should, just get a loan from a bank at 11% and toss the credit card into the garbage
From Chuck Evans Colorado Springs CO For me don't care if thay charge 1000% I use my card only for what I can pay back each billing cycle. There should never be a need to carry a balance if you are carefull and plan things out. Hell let them charge 10,000%
From Kyle, Akron Ohio We'll if people didn't live beyond their means nobody would have credit card debt… simple as that.
From Bob Duh.. and then they'll get a bailout from taxpayer money to cover the insanely high amount of largely fictional (due to loanshark rates) loans that consumers have defaulted on. Ta – Da. Its going to be essentially the same argument as with the foreclosures.. oh noes, they can't make the insanely huge payments that they obviously couldn't afford in the first place – help!!11!!
From Michael FYI – AMEX Blue raised my rate from 8.49 to 26.9% I then paid off the account and wrote to them that I would not use a CC with such a high rate.
They wrote the next day and changed it back to 8.49%. All things are possible and "asking is free"
"It's not what you say… it's how you say it"
From Bryan, Tampa, FL i'm being charge 17% per day! for cash advances. That's absurd and should be illegal
From A. Pettit The banks/credit card companies are deplorable. A customer told a story about Citibank raising his CC interest rates to 37% because they were late. So, here's guy that working and paying taxes, whose tax dollars are used to bailout a junk company (Citi) and whose reward is 37% increase??!! It's time for a modern day Boston Tea Party because our so-called leaders are taking us right down the tubes while they pad their own pockets with our money. It's absolutely disgusting what's going on in Washington.
From Jim Lefeber, Grants Pass, Oregon Dear Mr. Lefeber,
Thank you for contacting us about the terms of your Advanta account.
A customer''s rates are based on our assessment of the likelihood that the customer will default in the future. Your new rates reflect that higher risk.
We regularly evaluate all our accounts to ensure that the rates we are offering are in line with our current lending criteria and credit risk tolerances. As a result of a recent review, we determined that this is the rate at which we can continue to extend credit to you and your business at this time.
Your Annual Percentage Rate is now LIBOR + 27.59, currently 32.180%, for purchases and balance transfers. The cash and convenience check rate is now LIBOR + 30.59, currently 35.180%.
We are sorry but we are unable to lower your Annual Percentage Rate at this time. While we are unable to guarantee that a lower rate will be available, if you would please contact our Customer Service Department at the toll-free number indicated below in approximately 90 days, we will be happy to again review the Annual Percentage Rate for your account.
We appreciate the opportunity to serve you and your business needs. If you have any other questions or concerns, please feel free to contact our Customer Service Center. You can visit us online 24 hours a day at http://www.advanta.com or call us toll free at (800) 705-7255, Monday – Friday 8:00 am to 8:00 pm and Saturday 8:00 am to 5:00 pm Eastern Time.
Carol R
Account Manager
Advanta
On Tue Dec 16 20:19:53 EST 2008, jim@rio.com wrote:
> I think that you are penalizing me for no good reason. 1) I have never been overlimit; 2) I have never been late on a payment; 3) I have always paid more than the minimum due. Yet, you have increased my interest rate into the loan shark stratosphere. I really do not want to hear the excuses about "computer review" etc etc. I want a lower interest rate. BTW – What are you guys doing with your share of the 700B bailout paid by us taxpayers? Oh yeh – charging us (more) higher interest rates!
>
> I want a reasonable interested rate. How about what my own bank offers me? Prime + 1.5% with a 6% floor.
PD_Y
From Jim Lefeber, Grants Pass, Oregon Below is my recent inquiry and reply from Advanta. Note: I have been an Advanta customer since 2001 and I have NEVER made a late payment.
From Mike Jones, Denver CO The problem with credit cards is the woefully inadequete contribution of payment to the principle each month. This traps those making the minimum payment into carrying a balance for an exceedingly long period of time.
My recommendation for credit card reform: Force the issuers to make the monthly minimum payment sufficient enough, assuming no addition contribution to the balance, to pay the card off completely in 24 or 36 months. This will allow the issuer to charge whatever interest rate they deem appropriate for the risk. They can also set whatever credit limit they deem appropriate. Yes it will result in higher montly fees which should, in theory, contain spending.
From Steve, Washington D.C. Robert, not everyone with credit card debit is irresponsible and living off of their credit likes its extra cash. Some people have been laid off of their jobs and have been out of work for months – wiping out their savings and emergency funds. These people need their credit cards for emergencies like this and rate hikes have a serious & negative impact on their ability to survive this crisis. So talking about them in such a callous and spiteful way shows how ignorant and unsympathetic you are of other people's situations. Do some volunteer work for the poor and maybe, just maybe, you'll see they are not all the irresponsible whiners you claim them to be.
From Nick L Stamford CT the solution is to not charge anything you know you can't pay off. If you so fixated on getting credit and 'accumulating reward points' — get an Amex Gold. Yes there is a fee however I have gotten it waived for the last 3 years.
The thing is you need to pay in full every month. Then you aren't a slave to the credit card companies.
of course much credit card debt is due to addiction and spending money to keep up with the joneses.
the person who is saying the best solution is to ride the balance transfer merry go round is out of her mind. Not everyone will be approved and transfering balances from one card to another wont make the debt go away
From MJ Hirl Houston, Texas Credit card structures and business should be thoroughly investigated by Congress. Interest rates generally provide a "cost of money" barometer on borrowed funds with an imputed risk premium. However, with interest rates falling and Fed funds rate near zero, the cost of money is NOT an issue. Nor is the risk premium necessarily – at least not to the extent seen by many.
What CC companies merely do is take advantage where they can and no laws or rules control it. Not only that, but the irony is that if you cancel that card due to the rate change, it will negatively impact your credit score. So too if you start calling around to a lot of other card companies and they start checking on your credit score. That will be a "sign" and you'll have a ding on your credit score for that.
If this is not a conspiratorial scam – I don't know what is. Too bad 'ol AG Spitzer isn't around anymore. He's the only one with big enough *(&$(* to go after companies like this.
[Please withhold name and email. as it is confidential.]
From Nick L Stamford CT credit is now treated like an entitlement. maybe these crybabies should instead spend some money for a therapist and psychiatrist for an addiction control disorder.
when has credit become a replacement for real income and why do people feel they are entitled to a $15,000 unsecured credit line with no collateral backing it up and no guarantee of future repayment??
Don't worry, a bailout in coming. How dare ANYONE live below their means?
Just do the new American thing — charge up your credit cards, whine you can't pay and blame the 'bad economy' and wait to be bailed out
From Jack, Aston, PA I had a advanta car once and they raised my rate to 25+…for no reason. I paid the balance in full the next bill and will never do business with them again…the real shame is that many don't have any options available to them and the cc companies exploit it.
From joe, Milwaukee, WI This is exactly why the country is in the situation it's in. The credit card industry. Washington's first and foremost job should be to regulate these company's. The country has less money to spend because the credit card companies are getting richer, taking all the money from the public. I say the banks should step up, make credit more affordable and easier to access for the public. Doing this would put less reliance on credit card companies and make them much more friendly and competitive. If they aren't, then they go out of business when everyone switches their debt load. GOOD RIDANCE- those companies are snakes and the government just sits by and watches (and collects their kickbacks from them). This is criminal in my mind and should be treated as such!! And, no I'm not one of the people who is being affected as I have zero credit card debt for that exact reason. Rape and robbery are illegal acts punishable by prison, how is this any different?
From Mark, DeLand FL Don't you people understand what is going on? America is going into receivership. The middle class is going to be wiped out and eventually the US will be part of a North American Union. Fractional reserve banking is a scam. Our system is being imploded just like the buildings were blown up that morning back in September 01. This is what the globalists want. Things to look for in the next couple of years:
The military being used as police.
Food shortages.
Millions of bankruptcies.
Riots.
The elimination of the middle class.
Loss of all personal rights.
The centralization of all real power in D.C.
We're going through a finacial coup. Buckle up ladies and gentlemen. Things are going to get nasty. Buy a safe, guns, storable food and get as much of your cash out of the banks that you can.
Unfortunately, most people are in debt up to their eyeballs. But you have a great credit score. How laughable!
From Teresa, Concord, CA The author of this story neglected to include the obvious fix for this problem. These people aren't trapped in bad credit card deals. All they have to do is transfer their balance to another credit card. They may even be able to get a 0% rate on the new card.
From Ben, Dallas TX One issue that I see overlooked in these discussions, is that once a consumer "op's out" of their rate increase then their account is frozen and their credit limit reduced to the balance owed or just closed. Either way, this then triggers a flag on a consumers credit report…showing yet another credit account that is "maxed out" and therefore the credit agencies lower your credit score!!!
In such cases, the consumers are once again not doing anything wrong, trying to mitigate a rate increase they didn't deserve and which was unexpected, but by following the advice of the credit card company they're getting their credit scores hit and lowered.
I had a similar incident with HSBC. They sent me a letter one month telling me they were reviewing all consumer accounts and lowered my available credit to my balance. Within two months I get a another letter from HSBC stating that because I have open credit accounts that are at limit that they are closing my credit account. I then start getting notifications from a couple other credit cards, ones with large open lines of credit, noting that they've received credit agency reports that I was at limit on other credit accounts so they lowered my avaiale credit. Thus, the web was created.
Congress needs to step in and fix this problem of credit banks and the credit agencies "theories" in practice, as those theories helped get us where we are now and are just making matters worse.
From Robert Don't try to live off of the credit card like it's extra cash. Pay it in full at the end of each month, and you shouldn't have to worry about the increase. The problem is that most people are too irresponsible to use credit wisely, thus getting them into jams, and then they end up whining like the auto-makers… Oh poor me, I ran up my CC, and now I can't pay it..Bleh live with it. This is the reason the rates are so high.
From Andrew, Oxnard CA As the contributing writer pointed out, Advanta's loan defaults are at 11%. If Advanta wants to stay in business, they will have to pass on the losses to the current cardholders. Here's my attempt at their rate pricing: 11% to recover losses + 4% cost of funds + 5% for operating expenses (office rent, advertising, utilities, employee salaries, computer software & hardware, etc) + 5% investment return to shareholders. As a consumer, what can you do to avoid paying for other consumers' loan defaults, that 11%? Take a look at local credit union's credit card programs. They don't do teaser rates but most offer fixed, lower rates. They do have a higher lending criteria which a lot don't meet but that should give some comfort knowing there won't be as much losses that will eventually be passed on to you in a form of much higher interest rates.
From Mark, Lewisville,TX I just got off the phone with Citibank because they raised my interest by 5%. I've been a customer for 10 years and have never been late. I threatened to transfer the balance to another bank and they dropped my interest rate back down.
From Chris,NE PA I learned in college that cc's are bad for you. Bus. owners are a different story because they need them for a variety of reasons, and I feel for them. People who use them when they have cash in the bank are just fools. For those who spend well beyond their means were just asking for this…and sure enough the time to pay the piper is here.
From Mike Jones, Denver CO To everyone who has an excellent credit score and pays off their balance every month: The credit card companis don't like you. Their name for you: "Deadbeat". You are their worst customers because they only make the discount fee (i.e. the fee paid by the merchant on a purchase). They make no interest off of you. They make no fees off of you. The people the want are those who cannot afford to pay their balances off every month. Those who send their payments in late. Or exceed their credit limits. Those are the people they want. Those are the people they make money on (but I have a feeling that's about to change as more and more of them default).
From Anonymous the only way to teach these companies a lesson is to just stop paying them.
From Oilengineer, Houston, TX READ. None of these companies do anything but follow the rules outlined in your contract. People complaining about credit card rate changes are the same as those complaining about adjustable mortgage rate changes…READ WHAT YOU SIGN OR DON'T USE IT AT ALL
From Jay, RI Citi raised my rate from fixed 8.5 to a variable 18.99. I like many other people on here pay my balance in full and have never been late. I called the CS # on the back of my card and got someone in India and they basically would do nothing for me. I asked to speak to a rep in the states and after 5 – 10 of talking to the rep my rate is now 7.75%.
I tried the same thing with AMEX, they wouldn't budge so I ended the call with a please close my account. After being a customer for 10years they could care less about losing a customer…
I'm now down to 2 CC's and in 2 months it will be down to 1. Another good book to read is You're Broke because you want to be written by Larry Winget
From Bill, Lynbrook, NY And, being from NY i hate that the DEMOCRAT govenor is sontemplating raises taxes on virtually everything. all i have to say is say to go America!! you want your money, yet, you put democrats in office and all tehy are going to do is take it from you. maybe you will wise up in 2012!
From Bill, Lynbrook, NY Re:gary,west linn,or
you realize that Obama has no power to do anything right now, right?? he is not a Senator and he is not your president YET! i hate it when people think that he has any authority to do anything yet.
From Madoff Just do what I do..I charge up the card then report it stolen! I live like Donald Trump now baby!!
From Eric, Portland, OR I too have an Advanta card. I had a 6.99% promotional rate for one year. The regular rate was 18.49%, which is extremely high… I have always had problems with Advanta so I only use the card to take advantage of their promotions. "Coincidentally", the day the promotional rate expired they jacked my regular rate from 18.49% to 34.99%. I have a 780 credit score and have never been late. They told me they raised the rate because I was only making minimum payments. (Of course I was, it was the lowest rate on any of my debt.)
From Alain, Irving, TX In the past our creditors have held the iron fist. Now, the situation has reversed where consumers will walk away from creditors just like they have been walking away from their negative-equity homes. If the debt has no value, then there's no reason to maintain it or pay it all back. More money in my bank account has greater value than a good credit score with little to no money in the bank. In the end, the credit card companies will be the next petitioners for a bailout. For the consumer: Never, ever cash out your savings, 401K, and/or investments to maintain a depreciated asset.
From R. Chambers — Tucson AZ This country was not built on credit, but it will die from the use of it!!!
I stopped using "plastic" twenty-five years ago and have never looked back.
America must break the addiction of
credit card use. Believe me folks — pay your credit cards off and you'll never be happier or sleep better!!!
From Jeff Straw Milw, WI 53235 First things first Julian. A crash coursr in English would suit you. Secondly, as RIA's, we have put our clients first for 30 years and have never taken a nickel that didn't belong to us. And our practice has taken the same hit everybody elses business has taken. We are as well down nearly 25%.
We've never paid a bill late in 30 years but rest assured Julian, I'm sure our credit card rates will climb as everybody elses has.
From John Clark Phx AZ I have a Chase card and got an offer to write a check for 2.99% interest until paid off.. I enjoyed that rate for about a year… Just got a letter that there will be a new $10 account fee added every month.. But they are not raising the 2.99% rate.. Sure.. whatever you say.. I will never believe another thing Chase says and they have lost me as a customer.. !
From V. Murray, UT in our business we used to have Advanta credit card for over 8 years. you can not find more horrible customer service and ripping off credit card company. please, stay away from Advanta, they will take advantage of you one day
From gary,west linn,or Bailout money should end up going to the tax payer. BofA who is one of the worst banks on jacking rates for no reason and then not working at all with the consumer and is now laying off 35,000 people got 25 Billon from us. Obama needs to step in and make sure we see our money.
From Phil K Discover Card is ridiculous, I recently got rate reduction notice that said 23.95%, so when I checked the original rate was 28.99, I have had this for 20 year at limit of $15k. Although, I have not used in a while this sure gives me incentive to use the card, especially when I am getting less than 10% from Chase with straight 1% cash back (3% on gas and others.)
From Christopher, Colo Spgs, CO I also have an Advanta card for business inventory expenses. About a year ago the due date fell on a Sunday. I realized it and paid the payment one day late on Monday. Six months later without warning, I received the bill and they had raised the interest rate to 34.99%. I called and they gave the spill about how I was late on one payment and they were forced to raise my interest rate. I told them to close the account, and I paid a majority off with another card. They never mentioned an Opt-out period. The only written confirmation I received was confirmation I had closed the account and the remaining balance ($900.00) would be locked until payoff at the 34.99 % rate.
From Julian, Maple Shade, NJ The credit card companies are just as bad as "investors" they have license to steal main street money, and do it legaly. They dont care about anything or consecuenses, They Just want your money. they have not regulations they are legal bandits.
From Raleigh, nc You are the customer, you have the power to fire your credit card company and hire a new one.
From Larry D Magee My Credit Card company raise my rate to 14.99%. Explaination: General Business decision. I have been a good customer and have managed to pay down my account to almost no balance. This is the encouragement that I get to use credit. A lot of good the government funds have done for the general consumer. They should have given the money to the BIG Three – could not have done worst with it than the Financial sector.
From Dan, Round Rock, TX If you don't like their rules, then take away their funding by paying cash and saving a cash emergency fund. Plenty of business (and people) are debt-free. Even Apple is debt-free. Guess what? If you pay cash, then you have more money that you're not spending on interest.
The rich rule over the poor and the borrower is slave to the lender. Proverbs 22:7
From Michael, Cleveland Ohio This is interesting seems like people have yet to learn that credit card debt is not a reliable form of capital. Although a proper business plan should incorporate some debt unreliable credit cards are not viable. A fixed equity line of credit for small business owners could be much more reliable.
From Mount Holly, NC All the Credit Card companies are the same, they are all jacking up the rates to 25-35% but you can opt-out but you cant use the card again. I opted out to keep my rate at 8.99 and have cut up the card this was through Citi, Bank of America jacked mine up from 9 to 26% so I opted out of that one as well. Discover is the only one that has not done this yet. As soon as the others are paid off will never use again!
From Marc Sigler. Allendale. Nj My Advanta business card rate went up to 36.49 percent. Never use this company!
From Kim Adams, Muskogee, OK Credit cards raising interest rates will force more people into bankruptcy resulting in credit card companies losing money.
From Petered, Montreal, QC Amex is doomed. I'll laugh when they go bankrupt. They will not be around the same time next year. They are nothing more than crooks! You get the same service and rates with your local loan shark.
From Marty, Tallahassee, FL Citibank is one of the companies many bloggers have said is notifying customers of soaring rate hikes while the country is bailing them out and offering them money at 0%. Remember Citibank was bought out by the Saudis so now the U.S. people are subsidizing their poor money practices AND giving them money at 0% so they can loan shark it back to the American people. What is wrong with this picture? Is our gov. really that dumb?
From L. Tullos When enough people are fed-up with the predatory practices, we can recall a few congressmen on the House and Senate Finance committees unless they reintroduce legislation to enact nationwide usury limits. As banks and brokerage firms have been the #1 contributor of these people (both Reps and Dems); it's not that difficult to take some control back if you want to do something more than complain.
From Kentucky I find it astounding that people can be so blatently "naiive" to think it makes any sense to accumulate credit card debt. I have payed my credit cards bills without accumulation of interrest for 25 years. Of course, on occasion, I have sent the check too late and incurred some fees but my balances were never so high such that I couldn't pay them every month. Please, your first priority should always be to pay off your credit card first before any other bills. It may "hurt" to do it at first but you'll be wealthier in the end.
From Stefanie from Chicago, IL This is interesting! My husband and I have credit cards with Chase and Citibank. Chase never sent us anything and never raised our rates. We are very happy with them. Citibank on the other hand is a big pain in the behind. We have carried balances on their card for the past 3 years, were never once late and always used that card vs. the Chase card. Like many other people, we received the letter in the mail that they are raising the rate up to 24.0%! My husband and I were livid! We called them right away and of course the agent on the phone who was Indian and barely spoke English couldnt help us. So we asked for her Supervisor who was a very helpful individual. My husband argued with him about the letter, telling him that we were never late, have always carried a balance over the last 3 years, and that we are a lucrative customer to them as it is. So why would they raise our rates that much after they just received a federal ballout. He told the guy that if that is what they are going to do, he will transfer all of his balances to the Chase account which is not playing those games and just leave Citibank all together. The Supervisor put us on hold for about 5 minutes and when he came back, he assured my husband that he will take care of us. We ended up getting 2.9% interest rate for the next 8 months and kept our initial interest rate of 8.99% thereafter.
Basically what I am trying to say with my story is that even if you get the letter, call Citibank and argue with them and threaten them that you will leave (this will only work if you have another credit card). They will work with you. Like my husband told them, if that is what your doing, good luck, because you are going to loose more customers than fix your business.
Good luck!
From Donna Fitzgerald, West Columbia, SC This rate-jacking happened to me as well. I have an excellent credit record, no lay payments, not close to my limits, pay well over the minimum every month — and I get rewarded by having my rate jacked from a "fixed 7.99% for life" to 28.99%. The big banks inability to handle their money properly requires us to pay more all of a sudden. I closed the account and I will never do business with Advanta again.
From joel, dallas TX I am sorry, but thats your mistake. If they don't especified the interest rate you should have call them before making a desicion. As an advice go to lendingclub.com and check what rate they offer you, this may help you coupe with a lower ineterst rate and is a peer-to-peer lending so you arer not getting money from banks, you atre going to get it from real people that invest in you. good luck
From Ralph Waldo, Houston Texas Don't shed too many tears for AMEX. Although they just became a "bank" so they could get TARP money, they will be bankrupt before Q1 2010
From Beth, Florida I recently recieved my Citicard statement and found my rates going from 8.99% to 14.99% or more. I called and after moving up the ladder( telling them they would lose my business, FICO over 800, etc), found out I could opt out and get 7.99% for the next 9 billing periods then my rate would go back to 8.99%. I asked them why not just leave it as is and they blamed it on the economy. Then they asked if I had a carloan and if they could do better. They could not. Why would I want to switch my car loan to a company that needs to be bailed out and has ridiculous lending practices?
From Eric in Algonquin, IL haha.. And Citi received bail out money, 3.1 billion. I would like to know who is doling out this money because I need some bail out money too.
From tim, charlotte nc I have a BB&T credit card, I have not seen any rate increase (or decrease in my limit). you people who have credit cards with the banks run by criminals should come over to BB&T, they know what customer service is. of course, i do pay on time and in full every month.
From Michael Summerfield, Cornwall, NY This is why this downturn is going to be so ugly. Credit is a commodity. These short-sighted financial institutions will soon rediscover that fact as we consumers find alternatives to their greedy madness. We have a long memory and won't get sucked into their schemes again. A responsible administration would enforce limits tp the rates consumers pay given the 0% funding cost we are subsidizing!
From Dr Bill Toth, Houston TX Buyer Beware. Consumers can learn about credit card abuse – which is normal business operating procedure for the creditcard companies – by renting "Maxed Out" from their local video store, or reading 'DEbt Cures by Kevin Trudeau or any of Dave Ramsey's financial books, or David Bach's finanical books or Suze Orman's financial books. The same kkind of abuse can be found in the fine print of cell phone contracts too.
I dug my way out of a mess and now I teach others do the same.
Live with Intention,
Dr Bill Toth
CreateYourFate.com
From Steve Lenzen, Lincoln, NE The current financial mess and the way banks increase credit card rates to ursuary levels is proof the vast majority of the people running the banks and financial industry are just plain stupid. How can anyone think raising the intest rates from 8% to 27% will make someone a better credit risk is beyone me. People in this country need to band together and drive some of these banks into bankruptcy by a coordinated run on the bank.
From Frank Hummel, Dallas, TX Citi send me a letter advising me of a rate increase by 4%. I called them back and told them usually businesses who are going under are lowering prices not increasing them.
I was also advised of the opt out option. I advised them I'll opt out of the opt out. My Citi card is a dividend card and i pay it in full every month. Usually I get the max $ dividend out of it, about $300/yr. There you go Citi. Happy now?
From Ron Fournier, Rochester, NY I received a letter from Citibank
indicating that they are increasing
my APR from 10.490% to 24.99% with
an OPt Out clause. I wrote to them
that I am Opt out of this increase.
The credit card will be closed on
the expiration date which is Feb. 2009.
This credit card is paid avery month
on time and above the min. required.
As a credit card holder it appears that
we have very little to say about what
Citibank or any other bank does to the
indivual. There has to be some action
set in place to stop this.
From M.L.Kelkar, Pune, India True, Credit Card companies can increase the interest rates. However, they cannot do it with retrospective effect for one, and also have to give some minimum notice to the card holders to afford them a chance to reduce their outstanding amount.
If you look at the basics, this and most other Financial troubles that US is facing today arises out of the American mentality of "borrow and enjoy today, & pay tomorrow" and the excessive enthusiasm that comes with it. Only if the Americans had been a bit conservative in spending, this problem would not have arisen in the first place.
From Ricky Adkins, Maysville nc 28555 With this type of low mentality type thinking. It is time for a revolt. Cards like citi group are crooks. The people should run the risk as a group and all default and refuse to pay. Let them go bankrupt for a change. All they are doing is making the few that was able to pay go to the unable to pay catagory. The most they can do is get a judgement on you since they are unsecure lines of credit. This will mess up your credit. In the long run we could start doing more busines in cash.
From keith roesch clementon n.j. i transferred my capital one dept.to wamu before reading the fine print! there's a $69.00 transfer fee plus interest rate is 28% or 36% i still am not sure!thease companys are crooks that suck you in with deals before reading the very fine print!they will loose in the end as people cut up these cards!i am one of them!
-
Arson. Scrappers. Blackouts. It's part of business for the last tenant in Detroit's Packard Plant. More -
Inventing is the easy part. Marketing? Trickier. Experts tell how they'd advertise 5 hard-to-tout products. More -
Every restaurateur knows about Cursed Locations, the addresses where no venture survives. More -
Detroit's churches are plowing millions into redeveloping local housing and businesses. More -
Winepod attracted a wait list of eager buyers and millions from investors. Then came the recession. More
Be careful with these debt relief companies and your credit cards! I have heard they get your debt reduced, then the bank will issue a 1099-A, forcing you to pay income taxes on the amount forgiven as income for the year. Is this true?