credit card interest rate doubled

17 years ago

Capital One doubled our interest rate! We've NOT paid late--we've been making lots of extra payments lately 3-4 times the minimum payment. The letter said it was "due to economic conditions" basically because others are defaulting on their credit cards, those of us that pay on time have to make up the difference! GRrrr! Now we're trying to find a way to get it paid off before April 17-when the rate increases. Unfortunately, our small tax refund is held up due to an error in a ss#! Another Grrr!

I guess it will be a good thing to get the card paid off quickly, but stressful to try to manage! We actually have 1 more credit card with a balance and low rate (5.9%)--if that rate goes up, we'll be in trouble! (I know it's bad to carry balances on credit cards! DH used the cards to purchase parts to renovate 2 classic cars. The cars are done and have value, so his reasoning was he could try to sell the cars to pay off the debt in the case of a job loss or other major catastrophe.)

Any other cc companies increasing rates on good customers?

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Comments (22)

cearbhaill (zone 6b Eastern Kentucky)
17 years ago
last modified: 11 years ago
All.
Bank of America, Washington Mutual/Chase... all.
Sell the cars and pay the cards!
hendricus
17 years ago
last modified: 11 years ago
Any time that Capitol One changed the terms on us we received a notice that we could opt out. This would kill the card but still allow us to pay off the card on the old terms. No rush to pay off but you can't use it anymore.
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Anyone experiencing this with credit card companies?
Q
Comments (22)
I don't think that there's been much change in the parameters relating to my cards (one recently signed up for) in recent months. It's the old corporate game - while they love competition among their suppliers ... and among their customers ... they hate it on their own level and work to get rid of their competition at whatever cost: buy the competitors, squeeze them out, start frightening rumours about them or whatever. There aren't a lot of card companies ... so they can pretty well set their own rules ... and we can take it or leave it. They offer unsecured loans ... and have been suffering losses, as people die owing, go bankrupt, etc. And, the economy being what it is, with so many becoming unemployed, they likely anticipate more such losses in the near future. Plus many of the banks have been left holding the bag on many of those stinky loans, mortgages, etc. - I own Canadian bank shares, which got stuck with a number of them, and the value of my shares are now less than 40% of what they were in early summer 2007. Good wishes for increasing skill at managing your money effectively. ole joyful
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Maybe cut your 'credit' card interest cost by 1/3 ... or more???
Q
Comments (6)
Greg H, Your message tells me how you are managing ... debt. Wisely, yes. To your advantage, yes. It's still ... debt. D-E-B-T - a four-letter word! Cut it whatever way you like, it's still debt. Which can be become a *serious* problem when it's misused. That you are obligated to pay - even if you get a temporary lay-off, or with certain specific skills no longer in demand, a pretty well permanent one, or suffer permanent disability, or have a kid who subsequently develops a need for $50,000. worth of uninsured medical care - or even die. There's only one way you can avoid it - go bankrupt. Which steals from other folks who gave you services in good faith, from which you walked away. Some do that several times - walk away ... smiling. The message was, as I said earlier, not directed to the likes of you or people anywhere near as smart as you when it comes to managing money. Like, maybe, your friend's kid who, though s/he was in college, wasn't too smart when it came to money management. A local Canadian financial consultant complains that they don't teach much about it in school. If the corporations, including the financial ones, get their feet more heavily into the schools, there'll probably be even less. In his book, he offers advice on how to make a rate of return of 40% or better on your money - guaranteed. Proviso - you can only make that (before-tax) rate on store-issued credit cards whose balance you pay off. Maybe, had your friend's offspring not been willing to pay attention to his/her parent, as being out of the dark ages when it came to instructions as to wise ways to live, s/he'd have listened to you had you offered some advice. The reason for making the point about it actually being a debt that was being incurred when you use the card was to try to get some people who know much less than you about money management to begin to think about it somehat differently. The point of the message was to show them how they might reduce their cost somewhat if they followed a different pattern than some may have started through following the easy path of signing up for a store-issued card. I approached it with some trepidation, for I was advising ... taking out an additional card. Which could (too?) easily have a major debt run up on it, as well - leaving the holder in a deeper hole than previously. Should I become aware of that result springing from advice which I had given, it would trouble me greatly. Much more concerned than I was about complaints such as yours - which I hear about half of the time that I make this point. By the way - you didn't say that I was wrong - you just said that everybody does it, right? By the way, elsewhere in the message, when I was not dealing with the specific issue of the debt aspect of the card, I referred to them without using the quotation marks. Your country - government and people - is drowning in debt. And digging the hole deeper, daily. The "value" of your dollar is dropping - had you noticed? Good wishes to you for wise management of your money - and assets, Greg. ole joyful
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Credit card minimum payment doubles!
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Comments (25)
(I know this thread is OLD, but didn't want to start a new one on same topic.) Sorry, this is long... I first heard about the CC's raising the "Minumum Due" from 2% to 4% about 2 yrs ago (give or take). I wasn't very concerned at that time, since I ALWAYS have paid more than the min due (at least double, sometimes even 4 times min due). Then several months later I read about it again. This time I was a little more concerned - since we'd had some "emergencies" which resulted in MORE CC debt. Once all the emergencies were charged to CC's, I sat down and analyzed ALL my open acct's, all my paid off CC's, all my "Balance Transfer Offers", AND, If I didn't have an offer on the other CC's - balance or not -, I called them to see what they could offer. I charted EVERYTHING: Name of CC's and acc't #'s and Customer Service phone #s (that I already hold), current APR's, Available Credit Limits, Current Balances, Method of Computing to get Min Bal Due on outstanding Balance- (some were a % of outstanding Balance, some were Outstanding Bal divided by 48, and one was a % PLUS whatever the last finance chg was), etc. Once I had all the info down in speadsheet style, I called all the rest to fill in the gaps - (like on the one's I hadn't used for a long time & didn't have current info) Once I had all the info, I analyzed it to death! LOL! I had some GREAT bal trf offers on a couple - BUT OOPS! I have an outstanding Balance on THOSE... I have THESE offers, not so great, not so bad either - OOPS! Have an outstanding balance there too! But HERE'S one I haven't used for awhile - no Balance. NOT IN THE SAME "FAMILY" - Fair Bal Trf Offer, high enough credit line, only good for 4 months! My goal was to get cards A B C D E trf'd (re-distributed) as quickly and cheaply as possible (without opening ANOTHER NEW CC) to cards A B C at the great rates. I had great offer for cards A B C, fair for D & E - but they had balances on them. Then, had that "other card - M." Trf'd D to M. Once D trf went thru (& had 0 bal), trf'd A & B to D...once THAT went thru, Trf'd BACK from D to A..., etc. OK, Now that I KNOW most are COMPLETELY CONFUSED and wondering what this crazy lady is talking about...haha... Anyway - it took me about 5 months to complete the process (a little long, but I'm slow these days). It's just a matter of "redistribution" - which can work in your favor if done CORRECTLY. (NEVER trf a balance to a card with a low APR if you have a balance on that card. And, once you do the TRF - DO NOT USE IT A AGAIN until that bal trf is paid off!) Which brings me to this - another problem: When all done, which card(s) do I need to have freed up for "other emergencies"??? That was a big factor in the redistribution plan also. NOW GETTING BACK TO THE ORIGINAL SUBJECT AT HAND... After all my "redistributing" went thru, I had 1 card with a high balance (for ME anyway). I had already planned out that I would pay "X" amount of $$$ towards each card every month, and they would be paid off in "X" amount of months. When I heard (AGAIN) about the 4% Min Due on outstanding balances, I took a second "look" at my balances - (again, pen to paper to analyze) - and I got somewhat concerned about that ONE with the big balance. I actually read a THIRD time that by end of 2006, ALL the CC's would be doing the 4% thing! I called that one CC company and asked when my minimum pymt would go up to the 4%, and they told me it would NOT! I explained I've been reading about this for a couple of years now, and the last report was by end of year, and I just need to plan for it. They actually told me not to believe those "scare tactics"! haha! I was told that this would NOT happen to me, as I am in good standing (pay every month on time, don't go over credit limit, don't bounce checks, etc.), and as long as I keep that up, it will not effect me. Now this info was told to me around the first couple of months of this year-2006. (Feeling like I need to call again! LOL!) It's not like I "CAN'T" pay the increase. The problem is that I would have to re-adjust my pay plan - meaning I would have to take some money from the "others" to make the min pymt on this - thus the "others" would take longer to pay off. (The BIG one is at the lowest APR "until paid in full".) OH WONDERFUL - Now I have to go re-analyze again! But then, I've been doing that for so many years now, that I feel like I am a "self-proclaimed/self-taught debt analyst"! LOL! Just wondering - anyone out there been HIT with the 4% Min Due on outstanding Balances yet????
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a warning about using credit union-issued credit cards
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I am a merchant who accepts credit cards. On this end it's pretty cut and dry. I get a notice of a chargeback and I must produce my copy of the credit card receipt with their signature on it. It must be either imprinted or through a terminal. With online sales I must produce the hard copy of the order. I have 5 business days to either send or fax my copy proving the charge, or the money is automatically deducted from my bank. Plus a $25 fee. I get chargebacks because I'm an artist who does art and craft fairs throughout the northeast and there are times people in say, New Jersey see a charge from a company they never heard of in Vermont. "I've never been to Vermont!" So they challenge. I produce the receipt and a note they made a purchase at such and such craft fair, and it's done. Go to your credit Union in person and talk to someone who can actually help you. Have someone with some authority help you. You're finding out phone tag doesn't work. Go up the chain of command at the CU to get things done. You have 24 months from the date of the alleged charge to challenge it. The merchant has 5 business days to answer.
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caavonldy
17 years ago
last modified: 11 years ago
Call them. Tell them to lower the interest charges or you will cancel the card. Can you get the lower interest rate on your other Ccard if you do a balance transfer? If so, do it. If you threaten to cancel your card, they will usually make a deal. If you cancel the card and/or do a balance transfer, they make nothing.
miscindy
Original Author
17 years ago
last modified: 11 years ago
We can opt out and cancel the card. However, it hurts your credit score a bit to do so. Even if we pay it off right away and cancel it, cancelling the card reduces our amount of available credit, leaving only 1 card with a full balance.

Our other card is a Lowe's Visa (not a Lowe's store card, confusing I know) which is affiliated to Capital One so we are not able to transfer the balances between the 2 cards. The Lowe's Visa is our lowest rate card, which is why we were working on paying down the higher card 1st.
annie1956
17 years ago
last modified: 11 years ago
We had citibank just do that with dh sears cards (2) and my home depot. Worth the phone calls - dh called sears and they actually LOWERED the interest rates to below the original rate (don't know how he did it). I called on my home depot - they only kept the original interest rate intact. Still better than going up.
tishtoshnm Zone 6/NM
17 years ago
last modified: 11 years ago
Is the hit to the credit score going to be worth paying double the interest? In other words, are you in the midst of anything major where the hit to the credit score will impact it. If you are trying to refinance right now or anticipate doing so in the future or perhaps buying a car, then you should worry about the score.
scarlett2001
17 years ago
last modified: 11 years ago
They are all doing it. These monsters have had their way for far too long and we have played into their greedy hands. I got a 3.99% on Discover card and paid off Chase. Left the card active just so they can see how they like the interest they will get at my new 0 balance. I plan to charge some small thing every month and pay it right off so they can't close the account.
bmmalone
17 years ago
last modified: 11 years ago
We have had this happen too. We pay all our credit cards off at the month. (we have an Amex for business expenses and a Citibank Visa for personal expenses and a Home Depot Card). We have a credit score of 800+. Citibank raised the rate to 29% - yes, 29%!! When I questioned this they said that we could request the old rate, but when the card expired they would not replace it. We have only 9 months left till expiration of that card, so not sure what to do. We have a ridiculous $60,000 credit limit on this card and they won't drop that either. Amex hasn't raised their rates yet, but they won't lower the credit limit they have given us either. Home Depot has topped Citibank for its new interest rate - a whopping 35%. Seems like they are just waiting for us to make a late payment or not pay off at the end of the month. This sucks!
turnage (8a TX)
17 years ago
last modified: 11 years ago
Careful scarlett - I read a couple of weeks ago that Chase is gonna start charging an annual fee of $120.00. The article didn't say if that's across the board or not. Same article said all interest rates are going up to cover cost of non-payers.

I will probably cancel my Chase card when they send out notice of fee and rate increase.
kframe19
17 years ago
last modified: 11 years ago
None of credit cards has been subject to a jump in the interest rate.

BMMalone,

Probably your best bet would be to let that card expire and then provide a written explanation to the credit bureaus to offset the expected drop in your credit score.
janemarie5
17 years ago
last modified: 11 years ago
My DH has Chase and he rec'd a similar card. He doesn't have a balance but he was annoyed as he has great credit. I told him to call also, but the fact is he will just not use it.. which is a good thing anyways.
laurielep
17 years ago
last modified: 11 years ago
We too received a letter from Capital one saying that next year our interest rate will go up to 22%...I think it's at 12% now. We have had ZERO balance on it for about 6 months now and the limit is only $1000 so we are going to close it ourselves.

My concern is my Citibank card. We just paid it off ($5000 credit limit) and I'm concerned they will close it because of their problems. We rarely use credit cards BUT like the idea of $5000 extra in case of an emergency or something. I feel like they will see a paid off card and wipe us out and close the account. Can they do that?? We were never late and never had more than $1000 balance.
dadoes
17 years ago
last modified: 11 years ago
I don't understand why the need to close a card that has no balance. Doesn't matter if the interest rate went up, you're not paying any interest. If you use the card, do so with the intent to pay the balance soon as the bill arrives, stick to that intent, and again the interest rate is of no consequence.

Run a small charge on the Citiback card once per month or so and pay it when the bill comes, just to keep the account active.
laurielep
17 years ago
last modified: 11 years ago
The reason why I want to close it is basically the point of it. Capital One let me choose my own interest rate a year ago when I applied for the card...and now they want it to almost double? Nah...don't want it!!
They just lost my business.
joyfulguy
17 years ago
last modified: 11 years ago
Don't just quietly let the card lie unused, folks, please - call 'em and let 'em know what you're doing ...

... and the reason(s).

If they don't hear from you and a hundred other disgruntled cuss-tomers ... there's almost no possibility that they may choose to make any change to, from your point of view, improve their service.

ole joyful
countryboymo
17 years ago
last modified: 11 years ago
I called HomeDepot credit services and let the person there know that since there is no option other than close the card that they sent letters to every cardholder with sexual harrassment and every American Consumer should file charges. I told him that I hope his company and every company involved in practices like these choke.
susan_v
17 years ago
last modified: 11 years ago
In my opinion raising rates as they are is only going to cause those of us that are able to pay to fall into the difficult to pay catagory. In essence there will be MORE defaults than are now.Makes no sense to me at all.I know I am so tired of my monthly payments rising yet my pay rate is the same. Bankruptcy look appealing somedays.
rich69b
17 years ago
last modified: 11 years ago
My Lowes/Capital One card remains at 4.99%. But I have a Citicard that I haven't used in prob. 3 years, and I made a payment by mistake last year, so they credited it back to me after 2 months. Anyhoo, Citi sent me a letter stating that they're lowering my credit limit from 9K to --- one hundred dollars! I imagine that would hurt my credit score:( Oh, well....
mariend
17 years ago
last modified: 11 years ago
Thank goodness, we are able to pay off our CC each month. I too have notice the interest rates going out of sight. Even our bank credit card is high. Check credit unions or smaller banks. We all need to let the companies we will not pay these fees.
sherwoodva
17 years ago
last modified: 11 years ago
Miscindy, do you belong to a credit union or some other organization where you can get a small loan? Normally, I would not advise borrowing money, but if you truly are close to paying off both cards, it would make more sense than paying an exorbitant interest rate. Other options are that DH gets a second job, or you sell things on Craig's List or eBay.

From now on, only charge what you can pay in full each month. Tell your DH if he wants more car parts or whatever to save the $$ so he can pay in cash. The economy is so different today, we all have to adjust our financial behavior.

PS It seems that DH got you in this mess. Shouldn't he be the one to figure out how to solve it?

Good luck!
imscattered
17 years ago
last modified: 11 years ago
Raising the cc rates on customers who pay on time and have no late record surely fits the phrase:
"cutting off your nose to spite your face!"
joyfulguy
17 years ago
last modified: 11 years ago
When you have four pockets ...

... and you know that there's no money in three of them ...

... into which pocket do you stick your hand when you need some?

... how often do you stick your hand into any one of the three pockets where you know that there's no money even when your hand gets all of the way to the bottom??

Memo ... to individuals, as to businesses (but most of the latter know it now) ...

... when you need money ...

... go where the money is!

Like the credit card companies do.

They may cancel the cards of folks who've been giving them a rough time, i.e., not paying.

But they don't mind your payment being late - look at the large fee that they charge ... for what ... waiting an extra day or two for the payment?

Suppose it's $100.00 payment ... at 10% annual rate, that's $10.00 per year, or about 3 cents per day. If your payment arrives 3 days late ... their cost is about a dime ... and they charge you a $20.00 late fee?

Think they're about to cancel your card?

Why would they??

They're making a very nice bucket of money off of you ... and others like you.

You go over your credit limit?

More of the same.

So why would they shut you down??

You're a profit centre for them!!

If so for them ... how about you??

If you blow an engine in your car tomorrow ... how will you pay for the repair?

Or ... if you get laid off ... what will you live on?

Have you ever had a pair of handcuffs snap around your wrists?

I haven't either ... and I don't want any: I have absolutely no hankering for such an experience! I love my financial freedom!!

If you don't have a financial cushion of some funds available in case of immediate drastic need, I claim that you have a pair of handcuffs lying on your dresser, right beside where you lay your wallet at night.

Just waiting for an emergency need of money ... or a layoff ... to have them jump up and snap around your wrists.

Financial freedom - that ain't!!

Hope you all have a lovely weekend ... and if you'd be sweating blood if you don't get a paycheque ... or two ...

... please - do yourself a favour.

Even though it may be a beautiful weekend, find a way to enjoy it while spending little or nothing.

Start that savings fund ... build yourself a financial cushion. Aim at a minimum of 3 months' income available in case of emergency. Six months' earnings, or 9 months' ... or up to a year's worth, is even better.

After 25 years or so as a personal financial advisor, I don't have it, myself, some of the time.

Some of the time I have money in the bank, money market fund, etc., immediately available ... but sometimes not. I have a credit card that I don't use much, that I can use to fix my car, fly me home in case the travel co. goes broke and the hotel says pay - again - or go to jail, etc.

And I have a Line of Credit at the bank, initiated several years ago at no fee, fully secured by stock or mutual fund certificates, in order to arrange a low interest rate ... and it lies there unused, most of the time (but there's no inactivity fee to pay).

If I use the card for emergency ... I pay off the full balance prior to the due date, using my Line of Credit if the amount in my bank account, money market, etc. are short.

Then ... pay off that loan (low interest - far lower than the rate charged on unpaid balances owing on the credit card) as soon as possible.

I want my money working for me ... not be forced to use other folks' money ... and pay rent on it while I'm using it ... especially if it's the kind where they charge very high rates!

I never want to have to darken the door of a payday loan company: their rates are ... *horrendous*!

(By the way ... have you read my thread about the differences between a paycheque and a pension cheque?)

ole joyful

credit card interest rate doubled

Comments (22)

cearbhaill (zone 6b Eastern Kentucky)

hendricus

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credit card interest rate doubled

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