[KCrosbie]

They're raising their rates astronomically! I just received a notice from Chase today on my credit card stating that effective Nov. 1, my rate will change from a fixed 7.99% to a variable 19.99% + prime rate! Are you f'n serious?! I have been a loyal customer for over 7 years with no warning signs of being a high risk. I have excellent credit, I have always paid on time, and have maintained a low balance compared to the credit limit. I can understand they can jack the rate up on customers who pose a high risk, but for good customers who pose little risk? Come on!

I spoke to a supervisor stating all the above and her response? "Due to the economic situation and that it's unsecured debt, we're raising rates across the board." Really? Seriously? She said in order to remain in business and to stay competitive they have to make this change and hopefully they'll lower the rates again someday. So basically, they made s#it loans that are defaulting left and right. They're trying to raise capital to offset these loses to make it look good to the shareholders who they have to pay dividends to. What's the best way to raise capital? Jack the rates up so the good customers will pay off the credit card debt in order to avoid paying that ridiculous rate!

So we give these damn banks billions in bailout money, which we pay for and what do we get in return? Higher bulls#it rates! Can we bend over backwards anymore for them?

I'll finish up my rant in a little while. What do you guys think? Fair or foul?

[olePigeon]

Exact same thing happened to me. I have a Washington Mutual credit card with no awards points or anything, but it was super low interest at 4.89%. After Chase bought Wamu, it skyrocketed to 19.99%. Should I default on a payment, the interest is 48%.

I can get better interest from the mafia.

I have zero balance on my cards now, I'm afraid to use them.

[Big Mac]

When you're too big to fail (and Chase is even bigger now!), you don't have to be responsive to your customers. It sucks, but maybe people will wise up and stop carrying substantial credit card balances all together.

[Rumor]

A co-worker was telling me of how his neighbors checking account with Chase was cancelled because his balance was never over $200. He only used it to pay bills. He also has had it a few years and never bounced it.

[Uncle Skeleton]

Basically, all the issuers have given out too much credit and they need to reduce their exposure (this is called being responsible, something they weren't doing during the boom, and exactly what the taxpayers paid them to do). Some are doing this by reducing limits and canceling accounts. Others are doing it by souring their terms, so the customers will do the reduction for them (or if they choose to stay instead, they end up paying more in interest and fees). What she told you is true, they are doing this across the board (I got one too), and in fact all issuers are doing it. The credit climate actually is changing, and just because you had gotten complacent and accustomed to the last so-many years of unbelievably easy free-flowing cheap credit, that doesn't mean you're going to get to keep it, when no-one else is.

Look on the bright side, maybe they did you a favor. 7.99% was too high to start with, and they had the right to change it as soon as you needed it anyway. Consider this a lesson, that if you're worried about the APR on your credit card, you're doing it wrong. You should never carry a balance on a credit card, unless the APR is lower than the APY on your savings account. I don't even know the APR on any of my cards, except for the ones that are 0%.

[Uncle Skeleton]

Originally Posted by Rumor 

A co-worker was telling me of how his neighbors checking account with Chase was cancelled because his balance was never over $200. He only used it to pay bills. He also has had it a few years and never bounced it.

That's hard to believe. Zero-balance, or less than a dollar, is pretty common. I suspect that at this 4th-hand iteration, the story has changed somewhat.

[hyteckit]

Originally Posted by olePigeon 

Exact same thing happened to me. I have a Washington Mutual credit card with no awards points or anything, but it was super low interest at 4.89%. After Chase bought Wamu, it skyrocketed to 19.99%. Should I default on a payment, the interest is 48%.

I can get better interest from the mafia.

I have zero balance on my cards now, I'm afraid to use them.

I think the law caps the interest rate at 32%.

It's usury rates. There are usury laws.

[reader50]

I tend to pay off my balance each month, and got such a notice from Capital One a few months ago. I declined the change of terms, and let the card die when the changes kicked in.

[hyteckit]

Originally Posted by Big Mac 

When you're too big to fail (and Chase is even bigger now!), you don't have to be responsive to your customers. It sucks, but maybe people will wise up and stop carrying substantial credit card balances all together.

I though the new bankruptcy law pass by Pres. Bush in 2005 would lower interest rates.

Ends up with banks just making more riskier loans and mortgages.

[olePigeon]

Originally Posted by hyteckit 

I think the law caps the interest rate at 32%.

It's usury rates. There are usury laws.

Are you sure? I'll double check my statement.

Edit: Nope, but not as high as I thought, 33.24%. Not sure where I got 48% from.

[OldManMac]

Originally Posted by hyteckit 

I think the law caps the interest rate at 32%.

It's usury rates. There are usury laws.

It depends on the state. In Michigan, previous Gov. Engler signed legislation just before leaving office, eliminating ceilings on credit card rates. The thought behind it was that it would help convince card issuers and banks to move their headquarters here. There are no limits in MI.

[hyteckit]

Originally Posted by OldManMac 

It depends on the state. In Michigan, previous Gov. Engler signed legislation just before leaving office, eliminating ceilings on credit card rates. The thought behind it was that it would help convince card issuers and banks to move their headquarters here. There are no limits in MI.

Yeah, depending on the state.

WTF, no limits. That's nuts!

[hyteckit]

Chase hasn't raised my rates.
BofA lowered my rates.

My limits on some cards have been slashed though.

[finboy]

Originally Posted by KCrosbie 

So we give these damn banks billions in bailout money, which we pay for and what do we get in return? Higher bulls#it rates! Can we bend over backwards anymore for them?

I'll finish up my rant in a little while. What do you guys think? Fair or foul?

Yep, it's happening to a lot of people via JPMorgan Chase WaMu.

Here's the poop: They lost a lot of money on the subprime stuff, so they're making up the losses this way. Also, they're tired of Congress telling them that they are irresponsible lenders, so they're fixing it now.

Fire up the word processor and send a letter to Barney Frank -- that's who's running the show on telling banks what to do. And don't bank with Chase anymore. Go to the credit union and get a loan to pay it off at a reasonable rate of interest.

[hyteckit]

Originally Posted by finboy 

Yep, it's happening to a lot of people via JPMorgan Chase WaMu.

Here's the poop: They lost a lot of money on the subprime stuff, so they're making up the losses this way. Also, they're tired of Congress telling them that they are irresponsible lenders, so they're fixing it now.

Fire up the word processor and send a letter to Barney Frank -- that's who's running the show on telling banks what to do. And don't bank with Chase anymore. Go to the credit union and get a loan to pay it off at a reasonable rate of interest.

BS.

I knew the bankruptcy law in 2005 will lead banks to make riskier loans. Turns out to be true.

[dowNNshift]

Absolutely, positively boycott Chase. I used to be a loyal Wamu patron, but when Chase took over they've jacked with our business and personal rates. Rather than play games with them, we've closed all accounts with Chase.

The only way Chase will get the message is if people stop doing business with them. You want to know what they're spending that interest money on? It's terrible here in Texas seeing a Chase branch nearly every mile on each corner. Each of those buildings costs like over a million to build and probably costs $300K a month to operate. There is zero reason to have 17 branches in a 10 mile radius. It's disgusting... go to Google Maps while zoomed to your metro and type in "chase" and just watch all the dots appear.

Tell me, what advantage does having a branch on every corner achieve vs my locally owned bank that has 12 branches system wide? I get better service at my new bank, interest checking, and they didn't take any bail out money.

Chase sucks!

[turtle777]

Originally Posted by dowNNshift 

Chase sucks!

Chase is no different than all the other banks.

Bottom line: it sucks to carry a credit card balance these days. You're better off w/o.

-t

[Andy8]

Originally Posted by turtle777 

Chase is no different than all the other banks.

Bottom line: it sucks to carry a credit card balance these days. You're better off w/o.

-t

Exactly.

Do without them, use a debit card if you need plastic or cash.

[KCrosbie]

Originally Posted by finboy 

And don't bank with Chase anymore. Go to the credit union and get a loan to pay it off at a reasonable rate of interest.

I never banked with Chase thank god. I only had a credit card with them. I actually work as an assistant manager for a credit union. I may actually apply for a credit card and do a balance transfer. I just prefer to keep my personal business away from work which is why I didn't apply previously. I may change my mind now.

Originally Posted by Uncle Skeleton 

Look on the bright side, maybe they did you a favor. 7.99% was too high to start with, and they had the right to change it as soon as you needed it anyway. Consider this a lesson, that if you're worried about the APR on your credit card, you're doing it wrong. You should never carry a balance on a credit card, unless the APR is lower than the APY on your savings account. I don't even know the APR on any of my cards, except for the ones that are 0%.

Originally Posted by turtle777 

Bottom line: it sucks to carry a credit card balance these days. You're better off w/o.

-t

Some of us don't have that luxury. There are many reasons to use credit cards. I'm ok with paying interest at a "reasonable" rate because sometimes I have to use them when I don't have enough cash flow. I don't carry more than a $1500 balance at any time, thank goodness. The problem is keeping your credit score up. If you don't use credit and don't carry a balance over on a monthly basis, the credit bureau agencies can't see it and think you're not utilizing credit. I know a lot of people who pay off their credit cards within the grace period and thus have a 0 balance. Well that's a negative factor for your credit score and it shows on their credit scores. It thinks you're not using credit. Your score is based on a few things. A ratio of your balances divided by available credit (good to not be over 30% utilization), length of credit history with a creditor, payment history, inquiries and a variety of types of credit accounts open (i.e. credit card, car loan, etc.) I'm looking to buy a house so I need to keep my credit score in the high 700s. I don't want too many credit inquiries either, but I'm probably going to transfer it to a credit union credit card. I need to continue using credit to show a good score, but now I have to pay a higher price for utilizing it if I were to stay with Chase. If I were to close my credit card, that'll negatively affect my credit because 1) I've had the relationship over 7 years and 2) it has a high available credit limit. If I were to close it out, I would lose all that available credit and history. Credit score is so important when buying a house.

Ugh, it's how the game is played.

[turtle777]

Originally Posted by KCrosbie 

I know a lot of people who pay off their credit cards within the grace period and thus have a 0 balance. Well that's a negative factor for your credit score and it shows on their credit scores. It thinks you're not using credit.

This is wrong.

I use credit cards (mainly Amex), and pay off the full balance each month.

Since the credit rating agencies take a snapshot anytime during the month, my card *ALWAYS* shows a balance, even though I always pay it off in full.

-t

[turtle777]

Originally Posted by KCrosbie 

Credit score is so important when buying a house.

Well, I don't do that. I rent.

Buying a home right now is grabbing for a falling knife.

-t

[Art Vandelay]

Originally Posted by turtle777 

This is wrong.

I use credit cards (mainly Amex), and pay off the full balance each month.

Since the credit rating agencies take a snapshot anytime during the month, my card *ALWAYS* shows a balance, even though I always pay it off in full.

-t

Exactly. Credit bureaus still see the activity on the account even when no balance is carried forward. They will either see the billed balance or a snapshot balance.

Second, having a card with a zero balance is not a negative either. I have 5 credit cards. I only use one. The other ones are not a negative, they are actually a positive. They increase the debt to available credit ratio and provide credit history. If they were a negative, I wouldn't have a 800+ credit score. Plus, a credit report analysis even states they are a positive for those very reasons.

[Rumor]

Originally Posted by Uncle Skeleton 

That's hard to believe. Zero-balance, or less than a dollar, is pretty common. I suspect that at this 4th-hand iteration, the story has changed somewhat.

Checking account, not credit card.

[turtle777]

Originally Posted by Rumor 

Checking account, not credit card.

I disagree. Too risky for POS transactions.

If someone scams you with your debit card, you'll be in much more trouble than if it happens with a credit card.

Just imagine all the overdrafts and the proofs that you need to bring.
With credit cards, it's not a problem at all. Heck, with Amex, it's easy as pie.

I actually refrain from using debit cards as much as possible.

-t

[Art Vandelay]

Agreed. Credit cards are so much better for fraud than a debit card. If someone commits fraud with a debit card, they've actually taken your money. With a credit card, you just have a charge on your account. Some banks can be slow to reverse fraud on a debit card. In the meantime, you may be out of money to pay other bills. With a credit card, they reverse the charge and within a day or two, your available credit is restored. You're out of pocket for zero money.

In short, credit cards are almost painless when fraud occurs.

[CreepDogg]

I agree, although I have to say I use my debit card a lot for lower-risk transactions at 'trusted' sites (like the local grocery store, etc.). In part because it helps me be disciplined about spending, and in part because those types of places also offer free cash back. My account is with a small local bank, so there aren't many ATM locations, so that's the best way to get free cash.

I actually had a fraudulent transaction appear on it recently (my wife also has a card on the account and unfortunately isn't always as cautious, as much as I cajole her). It wasn't a lot of money - my guess is it was someone 'testing the waters' - and the bank closed/reissued her card and credited the fraudulent transaction within a couple days. I strongly prefer small local banks!

I do have a credit card with Chase that gets used for other transactions (web purchases, other 'non-trusted' sites, etc.) that gets paid off every month. I don't even know what the APR on it is, but I know I've gotten notices that it changed. The unfortunate reality is that credit at what many would consider 'reasonable' rates isn't very available in the market right now. The truth is, before recent events, rates were probably artificially low as the market overreacted to the credit boom, and it's likely that now they're artificially high as the market overreacts to the credit bust. That's just a reflection of the way greed and fear drive capitalism. Over time, we'll see rates on unsecured credit stabilize, but I don't know that we'll get back to the days of 4.99% APRs for all any time soon.

[CreepDogg]

Originally Posted by turtle777 

Well, I don't do that. I rent.

Buying a home right now is grabbing for a falling knife.

-t

I don't know about that. I think it's a great time to buy, so long as you're willing to hold on to the home for a while. Selling is another matter.

[phantomdragonz]

I am glad I was not the only one getting that letter.

one card going from 7.24% to 13.24% OUCH!
and another card going from 13.24-16.24% (I will close this one)

I RARELY use my cards for more then $500 and that is payed off within two months!

I have an un-secured line of credit that is at 12.5% and I have yet to receive a letter about that one!

I fortunately have ZERO debt...

-Zach

[finboy]

Originally Posted by hyteckit 

BS.

I knew the bankruptcy law in 2005 will lead banks to make riskier loans. Turns out to be true.

Huh? As we used to say in college "that must be some good sh*t you're smoking."

In fact, bankruptcy reform stuff led directly to this, because there's been a lot of noise about making banks accountable (after all, we bailed them out......) for not asking for big enough minimum payments, debt slavery, etc. Here we go!

Treasury/OCC/House Banking issued this little gem a few years ago, giving credit card companies some time to comply:

http://www.occ.treas.gov/ftp/bulletin/2003-1a.doc

See page 3 under minimum payments and negative amortization. That last term means being "underwater." Folks such as Barney Frank and Chris Dodd and Lucky Chucky Schumer were pushing this since the late 90s. It's just now going into effect, as part of the reform of bankruptcy laws (in this case, to keep consumers from hanging themselves if given enough rope).

Chase is being more heavy-handed than most, but this is what we should expect when Congress starts sharpening the axe for the scapegoat. All the BS about "predatory lending practices" has got to get SOME response, and this is part of it.

Believe what you will, but Congress has only made this worse over the past few years. Looks like it's not getting better yet.

[hyteckit]

Did 2005 Bankruptcy Reform cause world financial collapse?

EconFinNews - Dec 1, 2008 - Did 2005 Bankruptcy Reform cause world financial collapse? | ePluribus Media

We argue that the 2005 bankruptcy abuse reform (BAR) contributed to the surge in subprime foreclosures that followed its passage. Before BAR, over-indebted mortgagors could free up income to pay the mortgage by filing bankruptcy and having their unsecured debts discharged. BAR blocks that maneuver for better-off filers by way of a means test. We identify the effects of BAR using state home equity bankruptcy exemptions; filers in low-exemption states were not very protected before BAR, so they would be less affected by the reform.


Seismic Effects of the Bankruptcy Reform

[KCrosbie]

Originally Posted by turtle777 

This is wrong.

I use credit cards (mainly Amex), and pay off the full balance each month.

Since the credit rating agencies take a snapshot anytime during the month, my card *ALWAYS* shows a balance, even though I always pay it off in full.

-t

Originally Posted by Art Vandelay 

Exactly. Credit bureaus still see the activity on the account even when no balance is carried forward. They will either see the billed balance or a snapshot balance.

Second, having a card with a zero balance is not a negative either. I have 5 credit cards. I only use one. The other ones are not a negative, they are actually a positive. They increase the debt to available credit ratio and provide credit history. If they were a negative, I wouldn't have a 800+ credit score. Plus, a credit report analysis even states they are a positive for those very reasons.

This is some good info. I always thought a balance was needed to be carried over to show activity. I'll give it a shot and see what happens.

Be careful of leaving a credit card dormant for a while. Credit card companies tend to like to close out accounts if they're not being utilized after a certain time frame. I had a friend who didn't use his card for six months with Capital One and they closed it out without notification. It can negatively affect your credit score.


You know, I wouldn't be surprised if credit card companies did away with the grace period and started charging daily interest immediately upon purchasing. That and implementing an annual fee. I just hate it that they reserve the right to change the fees/rate at their discretion.

[KCrosbie]

Originally Posted by finboy 

Believe what you will, but Congress has only made this worse over the past few years. Looks like it's not getting better yet.

Agreed. This credit card reform act that's supposed to protect consumers from increasing rates and fees is only going to backfire. Banks will find a way to get their money. I know that they made changes to Regulation Z that now requires banks to send out statements on all open ended loans 21 days before the due date. Some banks were sending them out at the last minute so by the time the customer received it, the payment was due. This would cause late fees and viewed as unethical business practices.

[Art Vandelay]

Originally Posted by KCrosbie 

Be careful of leaving a credit card dormant for a while. Credit card companies tend to like to close out accounts if they're not being utilized after a certain time frame. I had a friend who didn't use his card for six months with Capital One and they closed it out without notification. It can negatively affect your credit score.

Right. However, I've yet to have one closed by the issuer even though I haven't used them for years. I do check them online periodically. Maybe that's enough to count as activity. IIRC, if they close an inactive account, you have the right to have them reinstate it.

[Rumor]

Originally Posted by Uncle Skeleton 

That's hard to believe. Zero-balance, or less than a dollar, is pretty common. I suspect that at this 4th-hand iteration, the story has changed somewhat.

Originally Posted by Rumor 

Checking account, not credit card.

Sorry, seemed my phone decided not to quote earlier. This is what my statement was applied to.

[BadKosh]

if you pay off the card just try CANCELING the card. They won't. I had a problem with USBank. I had an outstanding balance of 1200 bucks. They wanted to raise my rate from 15 to 27 percent, so I paid them off and explained to them that they won't make a profit with no customers? I sent the details to my congressman so he could ask some questions. USB sent out an apology letter. I crumpled it up and sent it back. They lost a customer Who will tell anybody who will listen how crappy the banks are treating people. I think rudeness and bad attitude should be returned in kind to these banks.

[turtle777]

Originally Posted by KCrosbie 

Be careful of leaving a credit card dormant for a while. Credit card companies tend to like to close out accounts if they're not being utilized after a certain time frame. I had a friend who didn't use his card for six months with Capital One and they closed it out without notification. It can negatively affect your credit score.

I charge all my credit cards once a year with a nominal amount.

-t

[Uncle Skeleton]

Originally Posted by Rumor 

Checking account, not credit card.

Yes I know. They will often close your checking account if you have zero balance for too long, Chase especially, and sometimes <$1 rounding down. But more than a dollar or ten, I'm highly skeptical.

[turtle777]

Originally Posted by Uncle Skeleton 

Yes I know. They will often close your checking account if you have zero balance for too long, Chase especially, and sometimes <$1 rounding down. But more than a dollar or ten, I'm highly skeptical.

Most checking accounts are only free if you have direct deposit and/or a certain activity level (like paying bills).

A bank that just closes checking accounts is stupid. They should charge a fee, and if the user doesn't like it, he should close it.

-t

[osiris]

There's a big difference between you closing a credit card account, and the creditor closing the account - you closing it is a good thing, when they do it it's a very negative mark on your credit history.

Careful with this too - I closed a sears account years ago. Last month I received a letter indicating an interest rate increase on this supposedly closed account.
I called - the account was still open! The bastards didn't close it.

anyway, careful with the credit cards, they are evil money cards for the most part, though we need them for some things.

[ort888]

Originally Posted by osiris 

There's a big difference between you closing a credit card account, and the creditor closing the account - you closing it is a good thing, when they do it it's a very negative mark on your credit history.

Careful with this too - I closed a sears account years ago. Last month I received a letter indicating an interest rate increase on this supposedly closed account.
I called - the account was still open! The bastards didn't close it.

anyway, careful with the credit cards, they are evil money cards for the most part, though we need them for some things.

Is this true? Yikes. When I was young and dumb I applied for about 15 different credit cards. I never even used half of them, but I still had open accounts. I got a letter a few years ago about a card I didn't even know I had, and had not used in about 6 or 7 years... telling me they were canceling my account.

Did I take a credit hit for that?

[osiris]

Originally Posted by ort888 

Is this true? Yikes. When I was young and dumb I applied for about 15 different credit cards. I never even used half of them, but I still had open accounts. I got a letter a few years ago about a card I didn't even know I had, and had not used in about 6 or 7 years... telling me they were canceling my account.

Did I take a credit hit for that?

I'd get my credit report and look at what the creditor said. You can contest items and request changes you disagree with. I think closing an account due to inactivity is different than, say, not paying them. But you have to look at the wording and see what was said about you.

When I was 18 I received my first credit card - JC Penny. I closed it years later, but on my credit report JCPenny reported that my account was closed because I was delinquent over a matter of $13 (which I wasn't!!!) I straightened that out, dag nab it.

[turtle777]

Originally Posted by osiris 

There's a big difference between you closing a credit card account, and the creditor closing the account - you closing it is a good thing, when they do it it's a very negative mark on your credit history.

I don't believe this is true. As long as the account is in good standing, it doesn't matter WHY it gets closed. At least not for FICO score calculation.

-t

[ort888]

What's that gubment website where you can get a free credit check?

[The Final Dakar]

[turtle777]

https://www.annualcreditreport.com/cra/index.jsp

Yu don't get the FICO score for free though. It'll cost a couple of bucks.

-t

[osiris]

Originally Posted by turtle777 

I don't believe this is true. As long as the account is in good standing, it doesn't matter WHY it gets closed. At least not for FICO score calculation.

-t

Well, that was my accountant's wording. It may or may not be true, but he explained that the creditor may not properly explain why the account was closed, thus leaving an exposed question mark on your report. When other creditors or new creditors see this, is raises an unanswered question. Unanswered questions are bad.

[osiris]

Originally Posted by The Final Dakar 

That poor, poor man and his traveling merry makers.

[olePigeon]

Right now is an awesome time to buy a house if your job is secure and you have the 20%. I'd buy a home right this second if I had the 20%.

[olePigeon]

My credit score went down when I closed my secure credit card, which is impossible to have an unpaid balance on.

[KCrosbie]

Originally Posted by osiris 

Careful with this too - I closed a sears account years ago. Last month I received a letter indicating an interest rate increase on this supposedly closed account.
I called - the account was still open! The bastards didn't close it.

All the more reason to periodically check your credit report. I do it at least every 6 months.

Originally Posted by turtle777 

Most checking accounts are only free if you have direct deposit and/or a certain activity level (like paying bills).

A bank that just closes checking accounts is stupid. They should charge a fee, and if the user doesn't like it, he should close it.

-t

That's usually why they have fees on checking accounts. I've never heard of a bank closing an account due to inactivity. I don't even think they can legally close it unless it's due to account abuse or fraud.