BEWARE credit card holders! You're getting screwed.

[Gerry]

Just this past couple of days (Saturday and Yesterday), I received notices from two separate credit card notices of Staggeringincreased rates.

Here's the deal:

Congress passed laws limiting what Credit Card companies can charge, fine, increase etc. The changes were supposed to take effect last fall. But the Credit Card companies needed more time. They were extended until February 2010.

Two cards I use and carry for business purposes are American Express Blue and a Chase Visa Platinum. As you know many places do not take AmEx so I use the Visa heavily for business and travel. I don't carry a large balance nor do I have a very high limit, per my request.

I normally use the regular American Express card my wife and I have for every day stuff and we pay the balance off every month.

Well, My Amex Blue card jumped from fixed 7.99%, then 11.24% and to a new 17.49%. I was talking to my banker about this card and transferring money around to pay it off. She related that her and her husband also have one. She called AmEx to find out what was going on and basically she was told "because we can". I have never been late and it is an automatic bank draft going directly to AmEx.

Visa - wow! I have had this account for seven years, again -never late as it is an auto bill pay draft. They must hate that I have been a good customer all these years as my interest rate is FIXED 5.99%.

A simple book keeping error on my part - something I THOUGHT I had paid for in November was not actually billed in November's cycle but hit in December when the item shipped.

I ended up being about $26 over my limit. I had set myself a limit of $5000 on a card that had a line up to $35K. But I requested $5K limit.

Guess what. Instead of an overdraft or increasing my limit, this is what I got in the mail yesterday.

"...because account recently went over the credit limit, you will no longer receive the introductory, promotional and/or standard APR's on outstanding balances on your account...

"The Default APR of Prime + 26.99% will be applied to all purchases and balance..."


Folks, the current prime rate is 3.25% making the new APR applicable to my card at 30.24% on a card I had been paying 5.99%

Well, needless to say I am not going to play that game. I paid off and cancelled that card.

Although I doubt much can or will be done in the long run, but I did sent this to NC state attorney general's office as a consumer complaint.


Just be sure to look at your CC statements as these banks try to find ways to jack you up before the new restrictions take place next month.

[Banned: theinvestor]

Cancelling credit cards is not a smart move IMHO.

[Gerry]

Cancelling credit cards is not a smart move IMHO.

When they jack the rate up from a fixed 5.99% to 30.24%, you better believe that one is getting canceled.

[Credit]

Thanks for sharing. I talked about this with my business banker a few weeks ago. He said the credit card industry was undergoing a huge change, because it was too easy for people to get cards and $$$ in the past. The rates are going up significantly and much fewer people are accepted.

[JuniperPark]

This is part of the big overall plan....

1) Make it so easy to get credit that most people will go deep in debt, and it will seem "normal" to be in revolving debt that is a multiple of annula income.

2) Further the "every is rich" feeling with a real estate bubble, and openly encourage re-mortgaging paid-off homes and deepen existing mortgages with 2nd and 3rd deed loans.

3) Put an end to bankruptcy, so debt stays with consumers for life (thanks for that one, Bush!)

4) Claim an "oops", get hundreds of billions of dollars directly from taxpayers

5) As inflation takes hold and mortgages come due, increase interest rates on all consumer debt by draconian levels, since there is no limit and most "credit addicts" as so deep they have no choice but to pay pay PAY.


You are witnessing the end of capitalizism. Greed won in the end.

[Banned: theinvestor]

That's one of the reasons if you have a credit card now you shouldn't be cancelling. It will be much harder to apply and get approved in the future with the new Credit Card Act. They will actually start verifiying information and use that data to determine if you are even eligible for a credit card and what your limit should be.

Another reason that you shouldn't cancel is that it appears on your credit bureau that you cancelled a card and if you have a long history with a credit card this can actually affect your credit rating.

To each his own...if you use a credit card wisely the interest rate is irrelevant.

[axeman]

Cancelling credit cards is not a smart move IMHO.

Why would you not cancel your credit card if they imposed 30% on you? Are you a banker or something???

Makes perfect sense to me, pay any balance ASAP, chop it up and throw it in the bin.

[JuniperPark]

Why would you not cancel your credit card if they imposed 30% on you? Are you a banker or something???

Makes perfect sense to me, pay any balance ASAP, chop it up and throw it in the bin.

I think he's suggesting you keep the card AFTER it is paid off.... with $0 balance, a 30% rate costs $0 (assuming no annual fee). And that may be better than trying to get a card down the road at 40% or 50%.

[Gerry]

I am not at all worrying about keeping a great credit rating or getting another card (which I don't want to do but sometimes you just have to use one to book hotels, flights, etc.)

My wife and I are in very good position. We are carrying no debt except a house payment (which we just refinanced yesterday at 4.875% - saved nearly $500 per month). We were at about 7.5%.

Closing out and paying off a credit card looks fine on the credit report.

But the jacking up of rates is something I had been hearing about but did not think I would get caught up in it. These banks are trying anything to recoup all the defaults.

[axeman]

That's one of the reasons if you have a credit card now you shouldn't be cancelling. It will be much harder to apply and get approved in the future with the new Credit Card Act. They will actually start verifiying information and use that data to determine if you are even eligible for a credit card and what your limit should be.

Another reason that you shouldn't cancel is that it appears on your credit bureau that you cancelled a card and if you have a long history with a credit card this can actually affect your credit rating.

To each his own...if you use a credit card wisely the interest rate is irrelevant.

I cannot believe i am reading this, you shouldn't cancel your credit card!!!

What kind of retarded system is this that punishes you for NOT having a credit card?

No wonder the country is stuffed. Do you have any idea how wrong this sounds.

[Banned: theinvestor]

It sounds ridiculous to you but U.S./Canada is based on Credit. I can't check into a hotel without a credit card. I can't book a flight without a credit card.

I have no choice but to use it. So in what way is this ridiculous ?

[Gerry]

My bank and a credit Union I belong to have rates hovering around 9.90%. That's higher than my original 5.99 but lower than a 31%.

[Banned: theinvestor]

Why would you not cancel your credit card if they imposed 30% on you? Are you a banker or something???

Makes perfect sense to me, pay any balance ASAP, chop it up and throw it in the bin.

Why are you worried about 30% ? You are using money that doesn't belong to you. You agreed to the terms.

Yes my point was if you aren't going to use the credit card you signed up for in 2000. It is better to not use the credit card rather than cancel it. Be smart about it...no one cares if you cancel the card...the direct affect is only on you.

[draggar]

My wife and I filed for the big B last year and the greatest feeling was getting rid of our credit cards. We have not gotten any since then and I do not plan to (I only have my Visa Debit card and I MIGHT get a PayPal card, but that's it.

I did catch my wife with a pre-approved aplication filled out and I gave her what was on my mind about it - if she runs upa debt she can't file for another 10 years meaning she's in their trap for 10 years I ripped it up right in front of her. Yes, we get a $h!t load of pre-approved applications and I shred every single one of them. They know some people who do what we did will feel "free" to do whatever they want and I'm sure some are gullible / stupid enough to just go right back into what they had before.

I saw the same thing - one late payment and your percentage goes from the 4.9%-12.0% range to the 24.9%-35.9% range. Screw them.

We keep a stash of cash for emergencies (car repairs etc..). So what if my TV is a 9 year old 36" CRT TV - it works and we don't need a huge one. So what if I don't have a Benz, my Kia gets us to where we want to go and still gets great mileage (and it's paid for). SO what if I don't have the top of the line PC, I don't need that. Nor do I need a Wii (but I'd like one), a PS3, an xBox 360, and whatever tpys you can think of.

It sounds ridiculous to you but U.S./Canada is based on Credit. I can't check into a hotel without a credit card. I can't book a flight without a credit card.

I have no choice but to use it. So in what way is this ridiculous ?

My Visa debit card (linked to my checking account) is perfect for this.

[Banned: theinvestor]

My bank and a credit Union I belong to have rates hovering around 9.90%. That's higher than my original 5.99 but lower than a 31%.

Great, or you can get a loan from a bank for cheaper. No one asks anyone to get a credit card and only make the minimum payments. There are alternatives to getting low rate.

The fact of the matter is most americans can't afford the credit cards they get. They use them for emergency and then they don't pay them off. How is that anyone's fault but theirs?

[Gerry]

It sounds ridiculous to you but U.S./Canada is based on Credit. I can't check into a hotel without a credit card. I can't book a flight without a credit card.

YOu are right about that - you have no choice. That is why we mainly carry and use the basic American Express card. The balance is paid off each month. That's the way that card is set up. But there are many places that still will not accept AmEx.

I might just go with a bank Visa/debit card.

But chase is out of their mind if they think I am going to pay 30.24.

Now, as for paying it off and leaving a zero balance - in many instances this is NOT a good idea if you are actually applying for credit somewhere else. What the granter will see is an open account with $0 balance but a $35,000.00 credit limit. This makes the lender very, very nervous. Yes, you have credit as far as credit goes. But they are weary of this as being capable of suddenly run up a $35,000.00 bill on one card, running up a large amount on a new card, and defaulting on both.

[axeman]

It sounds ridiculous to you but U.S./Canada is based on Credit. I can't check into a hotel without a credit card. I can't book a flight without a credit card.

I have no choice but to use it. So in what way is this ridiculous ?

You are being completely scammed, that's why it's ridiculous, I pity you all.

[Gerry]

Great, or you can get a loan from a bank for cheaper.

Like you said though - sometimes you need that card for business and business travel.

I just booked flights for me wife to visit her family in Orlando.

[Banned: theinvestor]

My wife and I filed for the big B last year and the greatest feeling was getting rid of our credit cards. We have not gotten any since then and I do not plan to (I only have my Visa Debit card and I MIGHT get a PayPal card, but that's it.

I did catch my wife with a pre-approved aplication filled out and I gave her what was on my mind about it - if she runs upa debt she can't file for another 10 years meaning she's in their trap for 10 years I ripped it up right in front of her. Yes, we get a $h!t load of pre-approved applications and I shred every single one of them. They know some people who do what we did will feel "free" to do whatever they want and I'm sure some are gullible / stupid enough to just go right back into what they had before.

I saw the same thing - one late payment and your percentage goes from the 4.9%-12.0% range to the 24.9%-35.9% range. Screw them.

We keep a stash of cash for emergencies (car repairs etc..). So what if my TV is a 9 year old 36" CRT TV - it works and we don't need a huge one. So what if I don't have a Benz, my Kia gets us to where we want to go and still gets great mileage (and it's paid for). SO what if I don't have the top of the line PC, I don't need that. Nor do I need a Wii (but I'd like one), a PS3, an xBox 360, and whatever tpys you can think of.



My Visa debit card (linked to my checking account) is perfect for this.

In Canada they won't accept pre-paid cards for bookings. I am surprised you can there.

By the way Draggar, no offense...but the reason people have trouble with credit cards is because they have trouble with money management. It has nothing to do with the credit cards themselves or with the interest rates. Even if you froze the interest rates i bet you there are people out there who still would have trouble making payments. The problem is with the spending ... aka impulse buying.

---------- Post added at 12:22 PM ---------- Previous post was at 12:21 PM ----------

Like you said though - sometimes you need that card for business and business travel.

I just booked flights for me wife to visit her family in Orlando.

Exactly Doc Com and from your initial post. I can tell that you are one of the few that actually know how to use a credit card. Many don't...that's why they fall in the trap and then with higher interest rates they become so locked in that they are unable to dig out.

[stock_post]

As long as one understands the difference between what they want and what they need it would be a perfect world.

If I was just buying what I need .. wait what would I do with all that money?