Credit card holders livid about 'rate-jacking'

[PleaseBlitz]

But increasing even your available credit, makes lenders second guess (as far as I know) potential loans.

For example, They ran my credit when buying this house and asked me about the 8000 dollar due to AMEX. I explained it was Xmas time and that was well within my budget. I didn't need the loan, I paid cash, but they still do that type of crap anyways.

They werent worried about your credit score, he was asking about it for your debt to income ratio.

[Dictator]

Defult rates on C/C are VERY high. It's unsecured debt. Its not like the C/C owns your home if you default. They won't come take back your TV. They are left with $X in bad debt. They are going to find a way to make their money back from somewhere. It's going to be APR/Fee increases.

-If you rarely use your card then quickly pay it off after the purchase, you can expect any rate/fees to be increased.

-If you revolve a balance that might be high based upon your income level, you can expect higher apr/fees.

Of course, you can always opt out of the increase.

I did credit collections for years. I'd talk to people who were in financial trouble who wanted help. "Ok, we can help...we can lower your apr and stop fees but the account will be closed." Oh people didn't want that to happen. They still wanted to charge on their accounts they could barely afford.

People also don't realize it costs money for a C/C to maintain an account..even if it isn't used. If you apply for a C/C because of the pretty picture on it and never use it, that costs the company money.

I'm not saying this to defend the industry. Their sole purpose of existance is to make money. They will do everything the law allows to make their money. However, the consumer is not being held by the short curlys. There are options out there.

[Ellis]

All I'm gonna say is.... It pays to DISCOVER.

Best card I've ever had.

[JetSkins]

all you have to do is ask for a lower rate and they give it to you. unless your delinquent with your payments.

[Kosher Ham]

They werent worried about your credit score, he was asking about it for your debt to income ratio.

But even without any substancial debt and a great history ? I think I just had a dummy. He asked me why there was no stated limit on my AMEX. I explained to him that even a regular AMEX has no limit. I think I had some gas or groceries on another card because I didn't have my AMEX (I left it next to the computer during Xmas). :doh:

My bank statements should have made it a non-issue.

[PleaseBlitz]

But even without any substancial debt and a great history ? I think I just had a dummy. He asked me why there was no stated limit on my AMEX. I explained to him that even a regular AMEX has no limit. I think I had some gas or groceries on another card because I didn't have my AMEX (I left it next to the computer during Xmas). :doh:

My bank statements should have made it a non-issue.

He very well may have been a dummy, but AMEX's have to be counted as a debt that has to be paid off THAT month. So an $8000 AMEX bill is counted against your montly debt. An extra $8000 per month in debt is pretty significant.

[Kosher Ham]

He very well may have been a dummy, but AMEX's have to be counted as a debt that has to be paid off THAT month. So an $8000 AMEX bill is counted against your monthly debt. An extra $8000 per month in debt is pretty significant.

I just thought it was stupid, since I was paying cash for it. What does my AMEX have to do with any of this was one of my questions ?

And it wasn't per month it was Xmas. It did end up being irrelevant, I just never understood why it was even questioned.

[PleaseBlitz]

I just thought it was stupid, since I was paying cash for it. What does my AMEX have to do with any of this was one of my questions ?

And it wasn't per month it was Xmas. It did end up being irrelevant, I just never understood why it was even questioned.

It was questioned because an $8000 amex bill counts as $8000 worth of MONTHLY debt. You likely had to show that it was paid off right?

[81artmonk]

Yeah, they all did this to me. Discover went from 9.9 to 27% and my capital one card went from 5 to 24%.

Luckily I paid them all off and haven't had a balance on them for over a year.

Funny story, about a week ago discover called me and said that I haven't used thier card for a very long time. I told them yeah I know, and that I paid off my debt and I don't use plastic unless I absolutely have to.

They replied, that's too bad, what can we do to make you use your discover card more?? I laughed out loud on the phone and told them,

Well, if you let me use the card and not have to pay back the balance, you'd have a deal.

As you can guess, it didn't happen. They are just rich. screw me with a ridiculous interest rate than wonder why I don't use your card!! Idiots

[Larry]

Best way to punish a credit card company?

Pay them off. Then go someplace else.

[Kosher Ham]

It was questioned because an $8000 amex bill counts as $8000 worth of MONTHLY debt. You likely had to show that it was paid off right?

No, they actually, never said anything else to me about it. It was just that one instance. I explained it and that was the end.

[zoony]

Call them and tell them to **** off. Money is getting cheaper, not the other way around.

That's the big problem I have with all this. The Free Market isn't working if the prime rate is at 0 and rates keep going up for the consumer.

[techboy]

Good question. If you do a balance transfer to a new account, it's not like your increasing your debt. So, I wouldn't think it would have an affect. Maybe someone on this board in the credit industry could answer this.

Part of your credit score is age of accounts, and part of it is percentage of debt to available credit. So, closing the card reduces that percentage (since you have less of the denominator), and you might also be eliminating one of your oldest cards, which can also hurt.

In reality, though, closed cards stay on the report for 7 years, so any effect is delayed until then, anyway. Of course, after 7 years, the age is really good.

Still, from what I've read, the effect is fairly minimal, especially if you don't do it too often. I wouldn't worry too much about it.

Far more important is a consistent (longer is better) history without any negatives, like reported late payments or bankruptcies or the like.

Of course, the credit score is an (intentional) proprietary black box of Fair Isaac, so exactly what happens is anybody's guess.

[Redskins Diehard]

Citi told CNN that anyone unhappy with the new rates can opt out and continue paying the lower interest, but they must close their account when their card expires.

All you credit debt junkies just opt out...granted one day you may have to buy stuff with money you ACTUALLY have....but you don't HAVE to take the higher rate

[Corcaigh]

CapitalOne seems to have jacked up the rewards they give me.

I don't know what the interest rate is on any of my cards 'cause I've never paid a penny of credit card interest in my life.

DiscoverCard actually called me asking to use my card more and saying that I could get 5% rewards on purchases of certain items. They didn't tell me that the reward at this rate is limited to $20. :doh:

[JetSkins]

isn't very easy to transfer your balance to a different lower rate card?

[TrumanB]

There still needs to be usury laws. Is 24.99% not enough profit for a bank getting a $400 billion subsidy from the taxpayers?

Well, how about we don't give them a subsidy? Perhaps, we wouldn't feel a need to then regulate them.

[Mickalino]

**** YOU Capital One.

Just got my notice that my rate is going to 30%, due to "economic changes"

BS !!

You have got to be kidding me !

You guys are shooting yourselves in the foot, because

The majority of people are either

1) Going to cancel their account like me.

2) Going to default on their loan because they can't possibly pay that rate.

3) File bankruptcy.

Either way, credit companies will be worse off than before

[Mickalino]

Call them and tell them to **** off. Money is getting cheaper, not the other way around.

Telling a low-paying customer service rep for a credit card company to *** off over their interest jack-up probably won't do much good.

[Dictator]

**** YOU Capital One.

Just got my notice that my rate is going to 30%, due to "economic changes"

BS !!

You have got to be kidding me !

You guys are shooting yourselves in the foot, because

The majority of people are either

1) Going to cancel their account like me.

2) Going to default on their loan because they can't possibly pay that rate.

3) File bankruptcy.

Either way, credit companies will be worse off than before

I'm going to put this as nicely as I can.

1. Mick, YOU are a risky loan right now to CapOne based upon what you've told ES about your situations.

2. C/C have loss built into their projections.

3. C/C DO work with people who cannot meet their obligations.

4. You can file BK, but that doesn't mean it'll be granted...especially if you have recent charing on the account.

all the C/C are doing this. They are trying to remove potentially bad debts.

Just yesterday AMEX offered people $300 to CLOSE their accounts.

[Mickalino]

I'm going to put this as nicely as I can.

1. Mick, YOU are a risky loan right now to CapOne based upon what you've told ES about your situations.

2. C/C have loss built into their projections.

3. C/C DO work with people who cannot meet their obligations.

4. You can file BK, but that doesn't mean it'll be granted...especially if you have recent charing on the account.

all the C/C are doing this. They are trying to remove potentially bad debts.

Just yesterday AMEX offered people $300 to CLOSE their accounts.

I'm going to put this as nicely as I can. I just don't buy that argument.

I've had this credit account for 3 years, and I've NEVER been late on a payment, regardless of the hardships I been thru. And Capital One knows NOTHING of my personal situations which I revealed on ES.

They are punishing reliable customers who are already in a bind because of the economy, and pushing them over the edge.

And I dont need to hear about how I need to be more responsible with my debt because jacking up to 30% is CRIMINAL, plain and simple

[Dictator]

I'm going to put this as nicely as I can. I just don't buy that argument.

I've had this credit account for 3 years, and I've NEVER been late on a payment, regardless of the hardships I been thru. And Capital One knows NOTHING of my personal situations which I revealed on ES.

They are punishing reliable customers who are already in a bind because of the economy, and pushing them over the edge.

And I dont need to hear about how I need to be more responsible with my debt because jacking up to 30% is CRIMINAL, plain and simple

No it's not criminal. There's no laws against it.

And don't be so blind as to think they don't know. one way or another they might have gotten wind that you have become a riskier loan.

Like I said though, they are playing a numbers game. They are trying to remove debt from their books. This is one way to do it.

Not all customers are good customer per se. some people have cards that they never use. They feel that makes them a good customer. No. They are only costing the c/c company $ every month.

[Zguy28]

I use Discover for most things. I called them about six months ago and asked them to lower my rate and they lowered it to 11%.

I did the opt out thing with my Citi card.

Either way I barely use them except on travel.

[Kosher Ham]

I think I see Mick's point though.

If I was a high risk client that you wanted to get off the books...why not lower my interest rates so that you can get more of your money faster for the short term, and then if I deem myself to continue to be a risk...raise them up.

[81artmonk]

Yeah this happened awhile ago. Most of our cards went to 26%. So we paid them all off and never use them unless we absolutely have to. Which I can say that maybe we have twice in the last 2 years.