Credit card companies screwing the consumer.

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~sudsshane

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Boy, was I shocked today to learn that my interest rate on my Barclay's Bank Mastercard was being raised from 8.9% to 14.99%, effective May 1st, 2009. I have had this card nearly 3 years with a perfect payment history, never exceeding the limit, etc.
Hell, just last year they increased my credit line from 5,000 to 7,000 dollars due to my payment history. I never asked for the credit increase,they automatically gave it.

So, what was I told when I called Barclays Bank customer service to verify this?

"Well, sir, yes I understand your frustration, and yes, you have been a great customer, but everyone's interest rate is going up due to the bad economy, and people defaulting on credit cards payments. I swear I wanted to reach through the phone and choke this guy. I pay my bills on time and do everything right,and in the end, we all are getting screwed by irresponsible people who defualt on their credit accounts.

It is infuriating!

Has anyone else experienced this?
 
Has anyone else experienced this?

Why yes, yes I have. American Express just increased my card from 7.99% to 17.99%. Never late and always pay more than the minimum and it was a card that I did a balance transfer to at that rate. When I called to ask about it they told me that it's in the agreement that they can increase the interest rate at any time.
 
oh great...

Which American Express card do you have?

I have the American Express "Blue" card which allows you to carry a balance, or pay it off in full each month with no interest. My interest rate is 8.99%.

Did they say they were doing this to all customers?
 
Balance Transfers.

I am looking online to see if any banks are offering a 0% interest rate on balance transfers for one year.
Since I owe a relatively small amount to Barclay's, I will transfer the balance if I can, and just keep the account open and at zero.
 
Well, for once I agree with you on something, PeterH.

I have never carried a balance on my credit card, unless I accidentally forgot to mail in my monthly payment on time (this has happened about twice in some 25 years). My credit limit is nearly 50k, but I've never gotten even close to that. Never have figured out why it's so high, but I'm not gonna complain about it. I pay off the bill each month in full. I regard it simply as a convenience when shopping, and a bit safer than using a debit card. Debit cards are final, and there have been cases of people hijacking the card info and PIN number with rigged readers, and then draining checking accounts. Never bought a vehicle on credit. Did take out college loans many years ago, paid those off in full. Only debt is the home mortgage... and can't wait until that's done. After that it's taxes and insurance that will be the big hits.

I remember, just for the heck of it, calling my credit card company and asking if they could give me a lower rate. They wanted to get detailed information about my income, job history, purchasing habits (as if they didn't already have all that), etc. I told them it wasn't that important to me. Not really sure what my credit card interest rate is, cause I never intend to use it for anything more than a short term interest free loan of less than 30 days.

If everyone paid off their credit card balance in full each month... the system would collapse. Probably would be a good thing, too.
 
I hope they do collapse! Then the bastards will get what they deserve. I have grown to HATE credit cards and in the past have carried more on them that I should. I'm still paying down some credit but within a year or so should be debt free. I wish I had thought more wisely in my 20's and utilized less credit.
 
Welcome To The Club!

Received a letter last week from Capital One stating interest rates on my credit card will increase from about 8% to nearly 18%. Like yourself, never pay late and always pay more than the minimum required. Indeed often pay the balance down to near zero.

Apparently this is happening all over the United States. Consumers are being hit with all sorts of rate increases, and or credit limit decreases, along with assorted fees and surcharges. All are happening regardless of a person's history with the company and or credit rating/score. Excellent, good or bad customer the only difference is in how hard one will be hit. And even then it is not that much of a difference.

Basically several things are going on:

The credit crisis has cost banks dearly in terms of profits. Not only are persons defaulting and or paying late, they are finding it hard to sell off consumer debt in the form of bonds, and even when they can the rates offered are much higher than before.

Banks have also seen their stock prices fall through ground and need to raise cash to increase their reserves any way possible, this means turning to their cash cows, deposit bank accounts and consumer credit accounts.

Finally the federal government issued rules several months ago which will ban certain now common credit card processes. Thing such as "universal default" raising interest rates at anytime for any reason, even on balances charged before the rate increase, and so forth will not be allowed by May (forget the month, but it is sometime next year), so banks are getting while the getting is good.

In their defence banks say they are offering consumers who do not agree with these new interest rates a choice: they can simply decline to accept and close their account. While they will no longer have access to the account for credit, consumers can pay off the balance at the old rate.

American Express by the way is actually paying some customers $300 to close their accounts.

Citibank is now charging credit customers something like $10 per month surcharge on their accounts, in addition to any interest rate increases.
 
I too always pay my credit card bills in full each month.

A couple of years ago, I bought some furniture at Macy's. They gave me the option of financing it on my Macy's card -- at zero interest -- if I paid it off within a year. It took 11 months. I probaby should have taken the money out of the bank and paid it off. Having this unrelenting bill really got on my nerves. (They kept showing what the interest would be if I didn't pay it off in time. I think the interest rate would have been 21%. Yikes. That was scary.)

Mike
 
Oh And By The Way

Do not think you are safe from this because you have credit cards with no balance due, but do not use it for long periods.

Credit card issuers are not missing any beats, inactive accounts are being closed without notice and or being charged fees per month. While at first glance closing out an account you rarely use may seem like a good thing, but it can do serious damage to your credit score.
 
My experience

Hi guys,kinda glad this has come up as a discussion,this is what happened to me recently, my Mastercard with I.M.B. Building Society for some reason is administered by Citibank here in Australia,don't really know why perhaps because I.M.B. is still a smaller building society and not a full bank,anyway when I was approved to get my card it came with an incredible $17000.00 credit limit,(I did not ask for, nor did I expect such a huge limit,especially when you consider I only earn $750.00 per wek gross salary.),it started with $5000.00 limit to begin with,now I was planning an overseas trip to Canada later this year and upon doing my sums, I needed an increase to my limit,and I thought this would be okay as they had already pre-approved the $17000.00,now I did not want the full amount just an increase by 2-3 thousand to cover spending money etc,well when I asked they refused saying I had not been with them long enough and I would have to wait 9 months before they would even consider an increase!!!!,(why then pre-approve $17000.00),I was going to Canada in May this year and have now had to cancel my trip because to pay for everything out of my savings would leave me with very little money in the bank, fortunately because I have given the travel agency and the tour operator plenty of notice, I will get most of my money back,(you see I had already booked and paid for sightseeing tours,but not airfares,thank goodness.).
I sent Cardservices a nasty email about this basically telling them I will be looking for an alternative card, and they simply did not care,they gave sosme platitudes about wanting to keep me as a customer etc,but were not going to break rules because it would lead to an avalanche of similar claims????,mind you like most of you good people. I always make more than minimum payments each month and paid of a personal loan a few years ago, in 15 months, more than 3 years before I had to.
They could not give a reasonable explanation as to why they preapproved $17000.00 dollars, but won't actually give it to me until it suits them.
Maybe it is time to return to the past a bit and save for things one wants,whereever possible.
Cheers guys.
Steve.
 
Here in the Netherlands credit cards are not so popular. Most non-cash payments (the popular Dutch word for this is "pinnen") and money withdrawals from your account are done using bank cards that come with your bank account and cost nothing extra to use. I do have a credit card, but I only use it for some internet purchases. The cost of a bank account with bank card and credit card is ca. 30 euros per year. My credit limit for the credit card is 1500 euros and when I pay my credit card debt within 14 days (which I always do) I don't have to pay any interest. Otherwise the interest is 15%.
 
Theo,

I think what we use for payments are called debetcards in the US. Our creditcards work sort of as extended debetcards. Only when you don't pay the bill at the end of the month it's turning into a real creditcard debt.

If I read threads like this I'm very happy not to have a real creditcard, life gets pretty expensive with them!
 
Indeed, mainly in the United States does one see what is called "credit cards". France, the the rest of Europe has mainly what are called "debit cards" in the USA.

France has "Carte Bleu" which basically is a debit card.One pays for items with it like a credit card, but funds are withdrawn from one's checking account. If the funds are not there,the transaction will be declined. One can however set up a "Carte Bleu" account to bill monthly, say in order to manage cash flow, but there will be a limit on how much one can "charge" per cycle.

Europe,being an older place than the United States, still has some "old world" ideas in places. One of them is the advere to "credit" and being "in debt". One lives within one's means and buys what one can afford.
 
I've had a Discover card for years, never charged more than a $1000.00 or so on it, paid it regularly. It seems to me about every 6 month's or so I get a letter where they're changing their agreement or interest rate. Next statement, I pay it off, and close it.

I've alrady closed a Chase card I haven't used in years, that will leave me a Chase Amoco card for emergencies. Debt free, is the way for me!
 
Louis,

As I understand it, I have a bank card (debit card) and a credit card. The debt limit for my bank card is 250 euros and the interest on debt is 14.2%. I can't use the debit card for credit card payments. For the credit card the limit is 1500 euros and the interest on debt is 14.9%. The credit card is only used in case there is no alternative as it is generally an expensive option. Many use it only for internet purchases and when on holiday. It seems that only with a credit card you can rent a car in the USA. One of my colleagues applied for a credit card just for this purpose.

en.wikipedia.org

Debit card - Wikipedia

en.wikipedia.org en.wikipedia.org
 
Citigroup has done the same thing- my rate went from 4.9% to 13.99% for no explicable reason - when I called, I got the same answer about the number of defaults, etc... And I don't think any lectures about not having debt are appropriate here. Congratulations if you haven't, but a responsibly used credit card isn't a crime and we should not be penalized by institutions like Citigroup. The overriding issue here isn't that I shouldn't carry a balance on my card. The issue is one of ethical responsibility - Citigroup for example has already received multiple billions, and I do mean multiple billions in federal bailout money and is still looking for more. Then they turn around and pull a stunt like this on their credit card customers. Legal? Yes. Ethical? No. And don't get me started on the resident genius CEO Vikram Pandit. What a mess!!!

And just so you know, I called Citigroup card services and refused to get off the phone until I got a service manager who agreed that this was ridiculous and agreed to keep my rate for another year. But guess what I will ensure within the next few months? NO debt of any kind. But keep in mind that even if you don't use a card it may damage your credit score to close it. Then you have less credit available and it screws your ratios.

While we are on the subject - if credit card companies can do this, then why shouldn't Audi Financial SErvices just decide to increase the interest rate on my car loan from .9% to 13.99% as well? Or perhaps the mortgage company should make everything variable rate? I realize there is a difference between secured and unsecured credit - but since all bets seem to be off just imagine what could happen...
 

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