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Free4Life11
03-27-2011, 03:18 PM
Credit card users are in for another surprise, and for a change it’s a pleasant one.

Banks are reducing some cardholders’ interest rates, thanks to a section of the credit card reform law that requires them to review any rate increases imposed since January 2009. Millions of consumers faced rate hikes that year, as the economy tanked, banks teetered, and credit card reforms loomed.

Federal Reserve data show the average interest rate assessed rose to 14.31 percent in 2009, from 13.57 percent in 2008.

“Most consumers believe that it was the new credit card law that caused the higher rates, but it was completely because of the economy,’’ said Odysseas Papadimitriou, chief executive of CardHub.com. He estimates between 91 million and 121 million cards got hit with a rate hike during the recession.

http://www.boston.com/business/personalfinance/articles/2011/03/26/review_prompts_banks_to_lower_some_credit_card_int erest_rates/

I can say this is TRUE. I had a Chase card (that was previously a Wamu card) and they lowered one of my rates by 5%...it's saving me $40 a month. :banana:

To digress...while the bank may be crying over the reform law and are now trying to screw with debit cards, THEY raised the rates of nearly 91 - 121 million cards because of the "poor economy" NOT the reform law. I'm so sick of hearing how the reform law hurts consumers...consumers got screwed WELL before this reform law went into effect!

jackskellingtonsgirl
03-27-2011, 05:25 PM
Chase dropped my APR by 4% for no apparent reason. :thumbsup2

Reddy
03-27-2011, 05:31 PM
hmmm I'll have to check my next bill

Purseval
03-27-2011, 06:01 PM
Who cares? Pay off your balance every month and the interest rate doesn't matter.

Charade
03-27-2011, 06:49 PM
Who cares? Pay off your balance every month and the interest rate doesn't matter.

Aside from the bit of snarkiness ;), no one is forcing (the majority) of people to run up their credit card debt. Credit cards are, for the most part, not necessary (unless you want to rent a car for example). The key is to be responsible with it because abuse or overuse, while very easy to do, can and will get you in trouble.

Having said that, what I don't like is, but accept it because I continue to use my CCs, is CC issuers (Amex for example) giving a grace period before charging interest unless you carry that balance over into the next month. Then they charge you interest on the current charges as well as the existing balance. So to avoid this, we pay off the balance of our SPG every month.

Free4Life11
03-28-2011, 10:35 AM
Who cares? Pay off your balance every month and the interest rate doesn't matter.

Obviously not you and your high horse, but people who have a balance and are working to pay it off care. I can tell you must be a joy to be around in real life. :rolleyes:

leadfootlevi
03-28-2011, 10:44 AM
Aside from the bit of snarkiness ;), no one is forcing (the majority) of people to run up their credit card debt. Credit cards are, for the most part, not necessary (unless you want to rent a car for example). The key is to be responsible with it because abuse or overuse, while very easy to do, can and will get you in trouble.

Having said that, what I don't like is, but accept it because I continue to use my CCs, is CC issuers (Amex for example) giving a grace period before charging interest unless you carry that balance over into the next month. Then they charge you interest on the current charges as well as the existing balance. So to avoid this, we pay off the balance of our SPG every month.

What is SPG?

Charade
03-28-2011, 10:50 AM
What is SPG?

American Express Starwood Preferred Guest. It's a great rewards card!

keishashadow
03-28-2011, 11:24 AM
Obviously not you and your high horse, but people who have a balance and are working to pay it off care. I can tell you must be a joy to be around in real life. :rolleyes:

i've worked in the industry, haven't seen reduced rate offer that applies to existing credit card balance, typically only for new purchases. Existing balance will carry the old rate and the that higher rate balance could likely be the last to be satisfied after the change in terms.

read the written disclosure as to other account terms that could be change via acceptance of the new rate. believe it or not you have the right to opt out or even cancel if rate increases & continue to pay it off as agreed under old terms.

Many times reducing interest rate on a card will switch you to a prime+ vs a fixed rate. Prime is low now, but if the economy rebounds it will segue back up quickly and you could be in worse position if you do carry a balance.

CowboyCO
03-28-2011, 11:35 AM
Discover lowered my rate from from 29.99%:scared1::scared1: to 6%!

Free4Life11
03-28-2011, 01:15 PM
i've worked in the industry, haven't seen reduced rate offer that applies to existing credit card balance, typically only for new purchases. Existing balance will carry the old rate and the that higher rate balance could likely be the last to be satisfied after the change in terms.

read the written disclosure as to other account terms that could be change via acceptance of the new rate. believe it or not you have the right to opt out or even cancel if rate increases & continue to pay it off as agreed under old terms.

Many times reducing interest rate on a card will switch you to a prime+ vs a fixed rate. Prime is low now, but if the economy rebounds it will segue back up quickly and you could be in worse position if you do carry a balance.

Thanks for the info. In my case I had a balance transfer check offer that I used and did not pay off that balance before it expired. That balance was at a rate of 21.24% variable, they lowered it to 16.24% to match my purchase APR.

Telcogirl
03-28-2011, 01:16 PM
Who cares? Pay off your balance every month and the interest rate doesn't matter.

Way to NOT add any value to a post!

Planogirl
03-28-2011, 01:23 PM
Those who pay off their balances every month should be grateful for those who don't. Sadly if the banks didn't get all of that interest they'd have to find another way to make money.

Purseval
03-28-2011, 01:24 PM
Obviously not you and your high horse, but people who have a balance and are working to pay it off care.

So you do something silly like use your credit card to buy $100 worth of groceries then celebrate the fact that it will take you 22 months to pay it off instead of 24 :banana:


I can tell you must be a joy to be around in real life. :rolleyes:

People without debt usually are. Perhaps not as exciting as thinking about which creditors to dodge but fun nonetheless.
Those who pay off their balances every month should be grateful for those who don't.

Yes and no. People who don't pay their balances subsidize those who do but people who don't pay their balances, roll up massive debts then default cost everybody in more fees, even the ones who do pay up on time.

Sadly if the banks didn't get all of that interest they'd have to find another way to make money.

And if more people managed their cards responsibly they could charge less interest for everyone.

Charade
03-28-2011, 01:33 PM
Those who pay off their balances every month should be grateful for those who don't. Sadly if the banks didn't get all of that interest they'd have to find another way to make money.

They'd still be able to collect transaction fees. If they didn't collect all that interest, many of the rewards cards would be gone. I don't take comfort knowing that others not paying their balances off monthly benefit me. It's the "Circle of Life".

Purseval
03-28-2011, 01:46 PM
I don't take comfort knowing that others not paying their balances off monthly benefit me. It's the "Circle of Life".

I would love to see data showing that people not paying off their balances is a net benefit for consumers as a whole. The average debt load for an American family surely can't be a good thing. America's debt as a nation is heading off a cliff.

keishashadow
03-28-2011, 02:28 PM
Thanks for the info. In my case I had a balance transfer check offer that I used and did not pay off that balance before it expired. That balance was at a rate of 21.24% variable, they lowered it to 16.24% to match my purchase APR.

that is rare, congrats:)

Free4Life11
03-28-2011, 03:54 PM
So you do something silly like use your credit card to buy $100 worth of groceries then celebrate the fact that it will take you 22 months to pay it off instead of 24 :banana:

Yes exactly. Having a lowered interest rate means someone can pay off their debt faster. It's not really complicated, that's a good thing for anyone who is paying off a balance.

People without debt usually are. Perhaps not as exciting as thinking about which creditors to dodge but fun nonetheless.

I'm sure they are, but what does carrying a balance have to do with dodging creditors?

bettymae1121
03-28-2011, 05:37 PM
People without debt usually are. Perhaps not as exciting as thinking about which creditors to dodge but fun nonetheless.

I hope you're not implying that everyone that carries a balance on their CC's also don't pay their bills on time, because that is certainly not the case.

People carry consumer debt for a lot of reasons, and it's not always due to irresponsible spending. Even if it is, so what? As long as the don't default on the debt, it's no one else's problem and quite frankly no one else's business. And the vast majority of those with consumer debt, pay at least the minimum and pay it on time.

I plan on being consumer debt free by mid 2012, however I certainly have no plans to feel superior to those still in debt, even those that are in debt due to poor spending choices.

deezeealum
03-28-2011, 05:43 PM
Citi lowered ours from 28% to 7.5% :cool1::

cruisnfamily
03-28-2011, 06:37 PM
Citi lowered ours from 28% to 7.5% :cool1::Did you request a lower rate or did they do it by themselves?

Purseval
03-28-2011, 06:57 PM
Yes exactly. Having a lowered interest rate means someone can pay off their debt faster. It's not really complicated, that's a good thing for anyone who is paying off a balance.

All the while completely missing the point of credit being used for things credit was never intended to be used for. It used to be that buying groceries with a credit card was used as the ultimate example of financial irresponsibility. Now it's so common people don't even remember or notice.

Interest should be high, ruinously high, so you think long and hard before you use it. I'm sure you're the exceptional person who is going to take this opportunity to pay off their balance but many more will just see it as an opportunity to charge more because it costs less.


I'm sure they are, but what does carrying a balance have to do with dodging creditors?

I didn't say that you just took it that way, which sounds like a personal problem. C'est La Vie.

hulagirl87
03-28-2011, 07:16 PM
I called and asked for a lower rate and was told that they couldn't do anything for me. :confused3 (it was the Disney visa) I was bummed! My interest rate is really high for that card. I would love it if they randomly just dropped it. They have randomly raised it in the past :lmao:

deezeealum
03-28-2011, 07:20 PM
Did you request a lower rate or did they do it by themselves?

They did it without me calling! I was shocked when I opened the email and saw our minimum was much lower!

cvrapclark
03-28-2011, 09:14 PM
Who cares? Pay off your balance every month and the interest rate doesn't matter.

Haven't read this whole thread, but wanted to respond to the above.

Sometimes things happen even if you do pay your card off every month. For instance, we were at Disney last week and I remembered leaving the park that my payment was due that day. So, of course, it was after the time deadline online to make payment post that day. So I called, and, luckily, they could make my payment apply that day with a $14.95 charge, of course. But, still, my interest would've been more and it would then set my card for charging interest for two months.

And the reason I didn't make my payment before I left was I forgot!! Plain and simple. Was getting ready for Disney!!