Beware the credit card companies!

Discussion in 'The Watercooler' started by hearts and roses, Oct 19, 2009.

  1. hearts and roses

    hearts and roses Mind Reader

    I received a letter from citibank today informing me that, in an effort for them to cut costs, as of November 30th, they are raising my current APR from 9.99% to a whopping 29.9%

    WTHeck?

    I'm so annoyed. They tell you basically, if you don't like this new 'arrangement', you can close your account and cancel your card at your current rate but no longer have an account with citibank. They also tell you to earn interest back that you can pay your account every month on time.

    I pay every month EARLY and I pay EXTRA on my card. I am so annoyed because this is my emergency card - or, WAS my emergency card. Argh~I'm calling them tomorrow!
     
  2. DammitJanet

    DammitJanet Well-Known Member Staff Member

    Isnt this something that Obama was trying to stop? I thought he put through legislation to stop this kind of thing. That is absurd.
     
  3. slsh

    slsh member since 1999

    Jo - I got the same letter. I was *livid*. Like you, I pay ahead of time and have been fortunate to not have to carry a balance most of the time. Needless to say, I shredded both of our cards. I do have a balance to pay off on one of them, hopefully by next month, and then I'm calling them and telling them that they can cancel our 2 cards and kiss a 25-year *good* customer goodbye. Seriously - 30% interest? Are you kidding me?

    What they're going to end up with is folks with- bad credit who cannot go elsewhere, and who have bad credit for a reason. Guess they'll be expecting a bailout too.

    Honestly, sometimes I really worry about the state of the world given the lack of basic common sense.

    My understanding is that legislation is in place, but I think I heard somewhere that it doesn't go into effect until the end of Nov?
     
  4. rejectedmom

    rejectedmom New Member

    I haven't gotten that letter yet but did get a similar one for another card. I pay on time and pay more than the due but it is in the fine print that they can raise the rate for any reason. husband and I are seriously thinking of going back to cash only. -RM
     
  5. everywoman

    everywoman Active Member

    I got one of those this past summer. Except they cancelled a card I had just paid a large some of money to and had almost paid off.
     
  6. GoingNorth

    GoingNorth Crazy Cat Lady

    The thing is that the CC companies don't make money off of us 'good customers'. They make their money off of customers who carry balances and pay late fees, etc.

    ALL the CC cos are doing this now in order to squeak in under the start date for the new guidelines.
     
  7. klmno

    klmno Active Member

    A little different, but I saw on TV today that some CC cos are trying to get new customers by sending the typical offer out- but one has an interest rate of over 75% so- before accepting any new CC, make sure to check the interest rate and terms.
     
  8. totoro

    totoro Mom? What's a GFG?

    75%!!! How the #*$&@ could you EVER pay that off if you ever had a balance???

    I would cancel if I get that letter. Hate them...
     
  9. GoingNorth

    GoingNorth Crazy Cat Lady

    75 PERCENT interest? Holy Crud! What do they do if you miss a payment? Send out a 'fixer' to break your kneecaps?

    That's nearly as high as the 'payday' loan places. Pure and simple usury if you ask me.
     
  10. witzend

    witzend Well-Known Member

    You weren't a good customer. To them good customers owe them money and late fees.

    There are laws being passed, but they don't take effect immediately. The banks will push as far as they were given leave to until new laws go into effect.
     
  11. Mattsmom277

    Mattsmom277 Active Member

    Read a huge article about this last week. Seems many banks and CC companies are getting obscene with the new rates they are springing on their customers. They are, as already stated, doing it now before the new legislation is passed. I don't know how it is regulated here in Canada. But i do know that even our payday loan places have a cap on interest and it is about what your CC company announced your new rate is going to be. CC's here don't carry absurd interest like that unless you fall behind in payments and the higher rate goes into affect. Or unless it is a CC given to someone with very bad credit who is attempting to repair their credit.
    I have used only cash for years. I simply refuse to pay interest on purchases. I cannot afford to. If I can't afford the interest, I can't afford whatever I'd put on the card. That's the way I view it. I'd had one for "emergencies" only to realize that what seems a emergency at the time, often isnt actually worth the stress of paying down that high interest debt for such a long time. I have always found a way to figure things out since my only cash rule. I do have a prepaid Mastercard for online purchases. Still same as cash.
    At this rate, CC companies and banks are soon going to have ONLY those customers who can't make ends meet already, as customers. They'll be flocking and courting those who are desperate for credit. In the end, it bites the CC company in the butt, since over time, people won't be able to sustain payments. I think many long term up to date customers who pay on time etc are going to be rethinking the waste of much needed (in this economy) dollars. Those who pay on time etc tend to be those who value their credit history and have money sense and responsability. Thus, why would they be naive enough to hand over 30% interest?????
    I think Obama should set a federal law in this legislature you are all getting, setting a strictly enforced limit on interest rates. Not on raising the rates as he's doing, but also a mandatory maximum that can be charged. It is robbery.
     
  12. GoingNorth

    GoingNorth Crazy Cat Lady

    I lost my house several years ago after husband died. Needless to say, my credit was hosed by the foreclosure and subsequent bankruptcy (medical bills)

    Last year I took advantage of an offer of a Master Card with an unsecured limit of 5K and an interest of 15%

    I figured it would help me reestablish credit and would give me a cushion in case of emergency vet bills, car repairs, etc.

    I did use it once or twice a month for small things and for one major vet bill which I paid off in four months. I was recently informed that my Capitol One card was going up to 32 percent interest.

    I closed the fripping account. I had more than that limit in savings and figured I could hit that in case of emergency. Worst case scenario was that I'd have to make payments into my svgs account to cover the money I used.

    No different than the CC other than not being reported to credit agencies and I wasn't paying interest.
     
  13. timer lady

    timer lady Queen of Hearts

    This is all about the new laws restricting banks use of late fees & sudden interest hikes. These laws, I believe, take effect in February of next year & the banks are taking advantage until that time to raise rates like crazy.

    In the meantime, they are shooting themselves in the foot.
     
  14. donna723

    donna723 Well-Known Member

    Sounds to me like they're taking a big gamble! The amount of money they will make by raising their rates so drastically vs. how many customers they will lose! :mad:
    So even if you get a card that seems to have a reasonable interest rate, they can turn around in a month and jack the rate up to whatever they want to? So what they tell you the rate is going to be basically means nothing? Trouble is, there are so many things that you NEED a credit card for ... renting a car, reserving a hotel room, etc. Like some others, I am just out of bankruptcy myself after paying on it for five years. I thought I'd try to get some little card for 'just in case', just to have for the convenience if I needed it. But maybe not!
     
    Last edited: Oct 20, 2009
  15. slsh

    slsh member since 1999

    Witz, you make a good point. Though I have to say, for a good 18 years of those 25, I carried a pretty good balance with- them, LOL. They made their money.

    on the other hand, they're playing with fire, just like the mortgage companies did the last several years, in my humble opinion. If they get rid of enough good (or as you point out, "bad") customers, they're going to have to start dealing with- more bad debts. At some point, the costs involved in collecting those bad debts are going to cut into their bottom line. Meanwhile, the good/bad customers who use their cards for emergencies are going to be giving their business to someone else. And I gotta tell you - I hold a heck of a grudge. ;) This particular company does much more than just credit cards. Pigs will be flying before I ever do business with- them again.

    Nothing like being penalized for being a reponsible person.
     
  16. flutterby

    flutterby Fly away!

    Do you ever wonder how the economy will ever be strong and secure when the companies that are the backbone of our economy can't see beyond the end of their noses?
     
  17. hearts and roses

    hearts and roses Mind Reader

    Although Obama's administration had their hearts in the right place, because of the delay in the bill going into effect, they have effectively created a loophole with which the CC companies can nail us to the wall quickly before the bill goes into effect.

    I was completely debt free 3 years ago. Now I have a college loan payment every month and a personal loan. I don't carry a lot of debt on my CC's, but it is nice to have one handy for emergencies. Without this CC our dog Sophie would have died last winter because I just didn't have the extra cash lying around to pay the gigantic vet bill!

    Going into this winter with an H who has already had a very slow year, without the security of having a CC handy should an emergency arise, scares the bejeezus out of me. I'm cancelling the card today and I guess I will wait and see if Capital One sends me a similar letter. Ironically, I was going to call Capital One and ask them to lower my rate since Citibanks was only at 9.9% and theirs was at 13%. And considering I've never made a late payment and I always pay more than I owe, I guess I thought it was worth a shot. I guess those days are over and it's back to cash only. If I don't have the cash, the whatever the items are go onto my "wish list". Bah! Christmas will be very slim this year, once again. I sure hope business picks up for H!
     
  18. Lothlorien

    Lothlorien Active Member Staff Member

    We got the same letter. I think Citibank is going to have a lot of angry callers today. I don't even understand how this is legal. I think citicard will likely be out of business very soon.
     
  19. slsh

    slsh member since 1999

    :rofl: You should have heard them try to keep me. On the one card, they offered me 7.99% for 6 months, then prime plus 11%. On the other (the 30% one), she offered to lower it by 2%. Uh, no. No, no, no. And this was only after they transferred me *3* times. Argh...

    It's all funny money and bogus accounting. Apparently on the 30% account, I would have gotten 10% of my purchases back in cash. Sorry, that's just not going to cut it.

    husband is going to have a major withdrawl, poor baby. He loves his credit card. ;)
     
  20. DaisyFace

    DaisyFace Love me...Love me not

    A word of caution if you carry a balance...

    If you CANCEL the card because you refuse the interest rate hike....be prepapred to call the company each and every moth because they will raise the interest rate anyway!!!

    This happened to me many years ago. I had a credit at, I believe, 7.99% interest and I carried a balance on the card. They sent a letter that they were raising the rate to 12.99% unless I cancelled the card and "opted out".

    So...I cancelled the card in writing and refused the new terms of the agreement.

    Well, guess what? Every month the interest rate on the card would be different and every month I had to call to remove the excess interest charges and return the rate to my agreed-upon 7.99%.

    I was so relieved when I finally paid that card off!!

    Good luck!!

    --DaisyFace
     
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