Investor · Mableton, GA · Member since 2009 · 1k+ posts · 465 votes
Seems to be prompted by the good intended consumer protection law, the credit companies keep raising interest rate like it was 1979... I just received a letter from Shitibank that they raising my credit card interest to 18.99%. About six month ago, it went from 11.99% to 14.99%. Now it's getting crazy. Needless to say, I've been paying them on time religiously and my FICO is way over 700.
Any ideas?
Well, they are shooting themselves in the foot since that practice would cause more to people default on their cards. It seems to me, from business perspective, that it is not how much they can squeeze the customer, but what is the customer's tolerance level. The "good" old days of taking a equity loan against you home to cover those credit cards debts are over. So what do they expect the average Joe and Jane to do?
For starters, people could actually spend less than they make. This would allow them to pay their balance in full every month. But this is the problem we have when we live in a debt based society.
u cant do much unfortunately. call them up and remind them you are a calued customer. pay it to a zero balance and leave it at that. my old employee wamu card went from 9.99 to 14.99 when i left the company. i called them up and told them to eff themselves (more or less). it is now at 12.24%. i still refuse to use it as my current employee card is fixed at 3.9% with rewards.
I have a B of A card that I’ve had for many years. It has a zero balance and I rarely use it. They sent me a notice saying that they were now going to charge me $29/year because I don’t carry a balance. Closing the card down will hurt my score but I’m not going to let them have the $29 for nothing.
u cant do much unfortunately. call them up and remind them you are a calued customer.
Well, I did it back when they raised it to 14.99%. I called them and threatened to close my account. I even paid off my balance which was $2,900 at the time.
They were not impressed. :boring:
Eddie -
That is what happens when our elected officials rush to push through legislation without considering the ramifications. Had they passed a bill that would take effect immediately, none of this would be happening. Since the banks are in the pockets of most of the Washington power players, the CC bill was designed to go into effect one year after passing (or so).
What did they think would happen?
Of course the banks would raise rates non-stop until the bill tells them they can't anymore. By then it'll be too late . . . we'll all have 25%+ rates.
Here's a BIG Thanks to Everyone who signed their name to that genius piece of legislation!
As for the old call the bank technique for dealing with these guys, that stopped working a few years ago. Check out this article I wrote in August '07 about Chase Bank and What Not to Do In Customer Service (note the 381 seething comments afterwards as well).
Well, they are shooting themselves in the foot since that practice would cause more to people default on their cards. It seems to me, from business perspective, that it is not how much they can squeeze the customer, but what is the customer's tolerance level. The "good" old days of taking a equity loan against you home to cover those credit cards debts are over. So what do they expect the average Joe and Jane to do?
Well, they are shooting themselves in the foot since that practice would cause more to people default on their cards. It seems to me, from business perspective, that it is not how much they can squeeze the customer, but what is the customer's tolerance level. The "good" old days of taking a equity loan against you home to cover those credit cards debts are over. So what do they expect the average Joe and Jane to do?
For starters, people could actually spend less than they make. This would allow them to pay their balance in full every month. But this is the problem we have when we live in a debt based society.
Well, they are shooting themselves in the foot since that practice would cause more to people default on their cards.
Probably true but in balance they still win even bigger - I believe they make far more $ on their masses of desperate customers who continue to pay the minimum payment month after month, no matter how high the APR goes. Their ideal customer has crippling balances, lives check to check, is vulnerable to overlimit and late fees, and probably has a declining credit score, while 'deadbeats' like myself that pay in full each month are barely tolerated.
My card, which was 5.9% fixed has been changed to 9.9% adjustible every 30 days.
I tried a bit of shopping around, couldn't do any better.
But my plan now is to wait until after the first when the law goes into effect and open a couple of new accounts AFTER they can't raise the rates for no reason. Then if I need to use a card, I will use whichever one is the best at the time.
I could not find a fix rate card anywhere.
I think that the banks are shooting themselves in the foot. If the average American has $5,000 credit card debt that they contracted at a fixed rate, that is what they are budgeted for. If you triple their payment by tripling their interest rate, many of them won't be able to pay.
One poor schmuck on TV had his rate changed from 7% to 33% and had never missed a payment. Well, I bet he misses one, now. And face it, if you can't make the full payment, it is going to ruin your credit and cost you fees. There is no reason to send any money at all. Your credit is just as ruined for a half payment as it is for no payment.
I'm not sure if things will be better after the 1st. Knowing that they cannot change rate for no reason, CC companies will continue offering new cards for higher rate, or will raise their standard for those who are granted lower rate. (FICO 849 and up?? :cry: )
I do agree, thought that they are shooting themselves in the foot and they are practically causing their market to shrink by putting their customers in a no-win position.
Hey, and guess what will happen next? Before we know it, the government will start baling out American Express &Co. :protest:
Eddie -
That is what happens when our elected officials rush to push through legislation without considering the ramifications. Had they passed a bill that would take effect immediately, none of this would be happening. Since the banks are in the pockets of most of the Washington power players, the CC bill was designed to go into effect one year after passing (or so).
I'd like to agree with the core of Joshua's post and expand it a bit. The main weakness in our system currently can be boiled down to one peg in a CNN story about the disaster sponsored by Bank of America - lack of consumer knowledge.
In order for any group of regulators all a part of the problem now offering solutions "market" to operate properly consumers need to understand the subtext of language crafted by corporate attorneys fantastic cc offers.
If we truly operated with a grain of mother f%?@
economic-identity, versus status-identity, we'd aggressively pursue dancing around the edges of urgent policy redress a single payer model of healthcare and save about $200,000 in costs for the average person.
Legislators who receive lifetime benefit-guaranteed retirement benefits while common laborers get to pay into cost-guaranteed 401K's largely fail to act with the approval of a largely silent middle and lower class, constantly defy all common sense using caravans of SUV's while attending "climate change" meetings plug a small drain while igoring a bursting dam.
When everyone thinks it's back to pie-in-the-sky fantasy business as usual more will drown. I'm already getting fitted for the wetsuit.