money/credit/finance question for DUers:

[islandmkl]

have any, or have all, of you with good, let alone outstanding credit, just had your credit card interest rates jacked up? My wife and I have great credit ratings, have never been behind or late with payments, pay off the cards in a timely and prudent manner, and generally are getting offers to 'transfer balances' and 'increase credit limit' all the time...

until recently.

Chase and Citi (yes, I am aware of where they are with the bailout $$$) have basically made our interest rates DOUBLE in the past two weeks. I mistakenly thought that the increase would be for any card usage going forward, but i have discovered the increased interest rates apply to the balances...

i am pissed. these companies just got billions, and have done nothing except CHARGE ME MORE for money i have already spent with them. i know the routine: reject the increase, the card stops immediately, etc. It is 'funny' that at this same time, the 'offers' to transfer, etc. have seemed to quit coming...

My main question is: what course of action have any of you with these circumstances taken? any links to advocacy groups or citizen-complaint groups? I am in the process of writing my congressperson (uhhh...) and sending something to Barack...i expect little response from either...

thanks in advance

[AlCzervik]

1. No and my BOFA MC rate actually went down to 9.24%.

yes, the rate went down, i'm not going to question it. As for credit line increases, yes i was offered one and said no, it was an absurd amount.

[Fresh_Start]

2. yes, its happening to many people with good/great credit

And I know its not personal. They aren't targeting me. They are dealing with their new reality. Solve the problem for yourself, don't revolve.

Realistically, they aren't making a decision on you either. THey are making a decision about 100,000-1,000,000 of people with similar characteristics: risk score range, profitability to them, likelihood of default. Every risk score range has increased probability of default today. Obviously the highest score have lower probability than the lowest scores but its still historically higher than their decisions were based on.

Risk scores don't know about income or employment or assets. And people who were earning $300K last year are earning $24K this year. The risk score doesn't reflect that change until they stop paying their bills ontime.

[Joe Chi Minh]

3. Oh, that's all right, then. As long as it's not personal.

[MajorChode]

4. Maintaining a credit card balance with Chase, Citi, etc. is for suckers

Generally your best rates are through local credit unions, and their lending practices are far less predatory.

I have an equity line of credit with my credit union that I use for short term loans. The rate is currently 4.25% and the interest is tax deductible.

Even credit cards through the credit union have some of the lowest rates around. The only way you could beat them was with an introductory rate with one of the big banks, only to have your rates jacked up to loan shark levels later on. Cash back, airline miles, etc. are are ripoff if you maintain a balance.

The moral of the story is don't do business with big banks, ever.

[Venceremos]

5. Best Buy did that to us several years ago

so we paid off the balance immediately and never bought on credit from them again. And we don't use any credit card anymore except in emergency.

If you don't have enough cash to pay off the card right away, could you get a fixed low interest loan from a local bank or your mortgage lender to pay off the balance? Other than that, I don't think there's much you can do.

[aikoaiko]

6. My credit score is in the mid 700s and my rate just went down 3 points.

Whatever is happening is weird.

[Mojorabbit]

17. Ours is in the mid 700s

and my husband is a physician and citibank just doubled our rate. Our Chase card is at six percent. It is weird.

[SmileyRose]

18. Mine is low to mid 800's and Citi jacked me from 6.9 to 24.9

I fired their asses.

[T Wolf]

7. An individual (or a group, for that matter) cannot have any effect on a large institution like

BoA. Do not waste your time trying to stop their actions.

Their only vulnerable point is the individual people who work for the corporation, from the teller in the corner branch to the CEO. That is the target that must be attacked if you want to have any impact.

If the CEO had to worry that a pissed-off customer might show up on their doorstep and "do something" there might be a small chance of impacting their decision. If the tellers in the corner branch were fearful of going into work because of an "incident" at some BoA branch, they might be less willing to take the risk of working there.

Until people who object to a corporation's policies take their complaint directly to the source, not a god damned thing will change.

[hamsterjill]

8. Serious question

There are a couple of up posts saying that rates have been lowered.

Does anyone suspect that the banks are using some type of formula (also mentioned) that is giving better rates to those individuals who the Banks feel will SPEND more on their credit card accounts at this point in time?

Perhaps the banks are targeting (with higher rates) those customers who they believe will not be using their credit cards in this economy. Penalizing those who are trying to pay off debt, etc.

Any thoughts?

[AlCzervik]

11. in my case i don't usually carry a balance and if i do it's not for very long.

We were in deep trouble about 10 years ago and we dug out, since then credit cards are used for airline tickets and car rentals.

[MajorChode]

13. They will use any excuse to raise rates

I had a co-worker that was late by ONE DAY on a payment and they raised his rate to over double to 28% (after they charged him a late fee). He said he called them up and complained, but they told him they would only lower his rate after 6 months of on time payments.

He told me his balance was around $10K. I did some math and assuming his original rate was 12% (going by his "over double" statement), that amounts to a $800 late fee (in addition to whatever late fee he paid initially).

[hamsterjill]

16. No argument on that point!

Oh, they will use any excuse. They are the modern day mafia in my book.

[SoCalDem]

19. Banks are running scared.. They are afraid people will just not pay anymore

so they are trying to grab all they can ...while they can..

once a person defaults, they "write-down" the losses, so it makes sense on their part to jack it up as high as possible, if they are going to have to "eat it" anyway, somewhere down the line..and they can collect for as long as they have that sucker on the line...


Actually, this is a good thing, in a way, because as they drop the available credit lines, people will have access to less credit, and may be in better financial shape once they pay off the damned things..

too many people have too much credit, that they don't deserve/don't need/can't afford..

Would you (or anyone) walk into a store and spend $500-600 if you had to hand over cash? could you?

Every time that card is swiped, you are taking out a high-interest loan..it;s just that simple..

Everyone PLANS to "pay it all off, every month", but most do NOT...and that's where the trouble starts.:(

[Bunny]

9. I just paid off my Lowe's card, and they dropped my available credit by

92%!! I've never been late with payments to them, and never exceeded my limit. I recently paid off the entire balance, which was only around $200. When I checked my available credit after the payment cleared, they had dropped it to 92% of the previous maximum, which was pretty low to begin with. No explanation given, and I don't really care because I don't use the card that much. But it's kind of scary.

[Coexist]

10. yes.

[Fresh_Start]

12. I think that Congress already passed legislation which

will prevent the practice of increasing the APR on existing balances. BUt I don't believe it becomes effective until some time in 2010.

It wasn't legislation it was new regulations. THe effective date is July 2010.

[tcfrogs]

14. My rates have gone down or stayed the same

Although I almost never pay interest, since 99% of the time I pay the balance in full every month.

[sybylla]

15. Nope. But we gave up giant corp-whore credit cards years ago

We have three credit cards (2 for business) through our credit union and all three are still at 9.9%.

As for a course of action, look for something different. In your shoes, I'd try to find a local financial who manages their own credit card program. If my rates went up, so long as they weren't unreasonable, I'd try to ride it out. I've been a member of this credit union for 23 years and they've always treated me well - especially in regard to loans and credit cards.

[RebelOne]

20. Clark Howard, the conumer guru,

said that if your interest rates are jacked up to close down your credit card account.