Credit Cards and Their Shady Policies

[Ash]

I've had a credit card through my bank (U.S. Bank) for about three years now.
When I first got it, my credit wasn't the greatest and they charged me a whopping 23% interest.
I had been doing well with it and hadn't missed or been late on a single payment when I noticed that my minimum monthly payment went down.  I called them and they said that because I was doing so well, they decided to lower my interest rate.  Apparently, they don't have to tell you when they raise or lower your rate.  They just do it.
For the better part of the last year I was paying 9% interest. 
Not too shabby.

I called them today to ask about getting my limit increased because I'm thinking about buying this Yamaha YSR-50 mini bike.  They're extremely difficult to find and are considered collector's items.  I found a guy here in my city who has this one for sale for $1300.  Not bad considering the majority of them go for well over $2000.



While I had the lady on the phone, I asked what my current interest rate was and she told me that it was 15%!
It had inexplicably gone up 6 points for no reason.
I asked her why and she told me that her computer didn’t give specific enough information but she gave me the "generic" reason.
Evidently, they checked my credit account, felt there was some sort of “risk” and then jacked my rate up without telling me.
I’ve made every single payment on time and have never been late on a payment…ever.  I’ve done everything that was expected of me in accordance with the credit card agreement.  I haven’t made any risky credit moves.  Heck, I haven’t even used my credit card in over a year and have done absolutely nothing to warrant them raising my interest rate.
What the hell is that about?
They told me they’d send me a letter that would give the exact reason why they raised my rate.  Yeah, I can’t wait to get that to see what BS reason they had for doing it.
I cannot wait for this credit card holder’s bill of rights to get approved by Congress.  The days of credit card companies’ shady practices will hopefully soon be at an end.

What about you?
Ever had to deal with shady credit card policies?

[ghouck]

I've had them in the past, but F-ed myself so I haven't had one in a decade or so. EXCEPT, when I bought my Quad, I didn't have anything on credit so I financed part of it through Yamaha. Turns out their 'loan' is a credit card. I got a half-decent rate, but as you know, You're only one 5-day late payment from having your rate jacked to the ceiling. I also NEVER make the minimum payment, I always make 3x or 4x, which cuts down on the interest immensely in the long run.

Not exactly a CC thing, but a bank thing I had: I had an account in Texas and I was transferred to Alaska. I was single so often I had <$20 approaching payday. So I get this statement saying I went into overdraft by $80 or so. As it turns out, I had about $10 in my account, and they charged me for no apparent reason $13. THAT put me into overdraft, which they charged me $13 for. THAT $13 put me further into overdraft which, , lather, rinse, repeat. . I was getting all this straight over the phone when they said "We just have something for you to sign, so come down and sign it and it'll all be taken care of". I didn't realize that they didn't know I was in Alaska, so I told them it was not possible, and that I'd get them a fax number to sent it to. Their entire tone changed, they knew that had me by the sack and now there was NOTHING they could do. They changed their tune to "unless you can prove otherwise, those charges are legit". I had to get the JAG office involved before they got me straight.

[Psycho Circus]

I've never had a credit card and I'm never going to get one.

I don't believe in spending money I don't have.

[Doggett]

I've never had a credit card and I'm never going to get one.

I don't believe in spending money I don't have.

Me too. 

In the old days people used to save up for things they really wanted.

[ghouck]

In the old days people used to save up for things they really wanted.

The problem with that is you end up with no credit score, so when you need to buy a vehicle or a home, you'll have trouble getting a loan and when you do, you'll pay a higher rate. A small amount of credit on a credit card can turn into a HUGE savings in interest when you go to buy a home. If you could save enough money to buy a home without financing, you'll still be better off financing it and saving yourself years of paying rent that you'll never get back. If you don't have anything on credit, and can't get anything on credit because you never have (retarded credit circle thing), then a CC is an easy way to build credit.

[Jim H]

In the old days people used to save up for things they really wanted.

The problem with that is you end up with no credit score, so when you need to buy a vehicle or a home, you'll have trouble getting a loan and when you do, you'll pay a higher rate. A small amount of credit on a credit card can turn into a HUGE savings in interest when you go to buy a home. If you could save enough money to buy a home without financing, you'll still be better off financing it and saving yourself years of paying rent that you'll never get back. If you don't have anything on credit, and can't get anything on credit because you never have (retarded credit circle thing), then a CC is an easy way to build credit.

No to mention a couple hundred thousand dollars can grow faster than the interest rate on a home.  And the tax breaks you get for having a home loan, etc. 

But yeah, home buying is the best exception.  It's one of the most consistent ways to raise owned capital in the USA.

[The Burgomaster]

A couple months ago, I was late making a payment on a credit card I have been using for 10 years.  First late payment ever (I was about 10 days late because my monthly statement was sitting under a pile of mail and I forgot about it . . . a very innocent oversight).  They charged me a late fee and raised my interest rate.  I called customer service and they showed no appreciation of me as a 10-year customer who had NEVER BEFORE made a late payment.  I told them if they intended to treat me like this for a first (and very minor) offense (I was 10 days late . . . not 10 months late!) I wanted to cancel the card.  They refused to take off the late fee or lower my interest rate, so I canceled the damned thing.  Never fear, I have others . . .

[trekgeezer]

I have a credit card through our Credit Union at work that is 8.5% all the time. If we get anything that will take us a few months to pay off we always put it on this one.

A few years ago I got a branded card from Bank of America.  It's for the National Space Society which I've been a member of for 20 years. They get some small amount of money for every purchase I make with it.  I do most of my online shopping with it and pay the balance off every month.

This thing had a credit limit of $26,500.  Well the other I got a letter from them telling me they dropped my credit limit to $14,000 because of the way I use my card.  I'm assuming they mean they're not getting any interest payments from me because I pay it off every month.

Dropping the limit doesn't bother me, but how will that affect my credit report and my credit score which is excellent.


You know Obama just had a bunch of CEO's up to the White House to badger them about this stuff, but I don't know how much good it did. The sleaziest thing they've been doing is raising the interest rates on balances you already owe. How the hell is that legal?

[The Burgomaster]

Here's some recent news:

http://www.comcast.net/articles/finance/20090430/US.Congress.Credit.Cards/

[ghouck]

A couple months ago, I was late making a payment on a credit card I have been using for 10 years.  First late payment ever (I was about 10 days late because my monthly statement was sitting under a pile of mail and I forgot about it . . . a very innocent oversight).  They charged me a late fee and raised my interest rate.  I called customer service and they showed no appreciation of me as a 10-year customer who had NEVER BEFORE made a late payment.  I told them if they intended to treat me like this for a first (and very minor) offense (I was 10 days late . . . not 10 months late!) I wanted to cancel the card.  They refused to take off the late fee or lower my interest rate, so I canceled the damned thing.  Never fear, I have others . . .

In these days that's what they want: The need money NOW, and the more people they can push into paying their debt off, the better. It's still the best move for YOU, but it's also what they want.

[The Burgomaster]

In these days that's what they want: The need money NOW, and the more people they can push into paying their debt off, the better. It's still the best move for YOU, but it's also what they want.

But I didn't pay the debt off completely . . . I just canceled the card.  There is no obligation to pay a credit card balance in full when you cancel the card.  They will still get my payments over the next 3 or 4 months (same as if they kept my account open).  But they lost out on my future business.  Makes no sense to me.  I've been a faithful customer and frequent card user for 10 years.  But they threw it all away for the sake of a small late fee.  They would have made plenty of money off me in the coming years, but now American Express will get it all.

[ghouck]

I thought one had to pay off a card to cancel it. I see what you're saying now, but, it means little to them considering they aren't looking to spend any money, they just want to take in as much as they can right now. Right now getting as much money as they can is much more important to them than future customers. What they want is either ALL the money owed to them as soon as possible, HUGE interest rates for those that can't pay them off immediately, or partial payment and the tax write off they get when someone files for bankruptcy or the account becomes a bad debt. 

[Rev. Powell]

I've never had a credit card and I'm never going to get one.

I don't believe in spending money I don't have.

Me too. 

In the old days people used to save up for things they really wanted.

I use a credit card for everything and I don't live beyond my means.  I simply pay off the balance every month.  I earn interest on the money I would have spent if I paid for things in cash, which adds up over years and years, plus my card pays me points which I frequently redeem for airline tickets or DVDs. 

Credit cards can be quite the scam IN FAVOR OF the consumer if you know how to use them.  Customers like me are a credit card companies worst nightmare.   Like Burgo, I was late once and paid their financing charges, but I still have made a lot more off them then they mke off me.  And I built a fine credit score, too. 

[Ash]

Well, I got a response from my bank regarding my credit card.

It said:
"The change was made as a result of a review of your account and your overall credit history.
1.) Payment amounts are low in relation to balance over the last 6 billings.

The primary reasons provided by Trans Union Corporation which impacted our decision were:
1.) Serious delinquency, and public record or collection filed.

2.) Proportion of balances to credit limits on bank/national revolving or other revolving accounts is too high."


As for the first reason they gave...  Essentially they're saying that because I only make the minimum monthly payment, they reserve the right to jack up my rate.
How is that legal or fair?

The serious delinquency they mentioned is an old phone bill for $70.  I had been planning to pay that next month when I get some more cash, so that won't be an issue here soon.
So, it's legal for them to raise my interest rate based on an outstanding debt from a totally different company that they have no affiliation with whatsoever?

As for the third reason...  I only have this one credit account and my limit is only $1000.  I've paid almost half of it and have a balance of just over $500.
How is the proportion of that balance too high?

Like I said before, I can't wait for this new bill to pass.  I'm not some stupid person who frivolously uses credit and has a terrible credit history.  I was doing great for a long time and they just all of a sudden raise my rate. 
I'm going to school full-time and getting by the best I can.
Raising my rate in this way only hurts me.
When this bill passes, these greedy corporations are going to get taught a lesson that they can't just step on the little guy whenever they feel like it.

[RCMerchant]

This is the reason I don't own a credit card. I use cash or a check. I won't pay big scumbag corporations cash to pay for stuff. If I aint got the money for whatever at the time...I guess I don't need it that bad.