Help! 3.9% credit card rate jumped to 18.9!

[jfulcer]

right after the new bankruptcy laws went into effect that make it much more difficult for the average credit card user to declare bankruptcy and run away from their debt -- most credit card companies changed the terms on their cards and upped the amount of their minimum monthly payment from around 1% to around 3%.

Does anyone else think that was just extremely convenient timing? I'd love to be a credit counseling agency come Jan 1. Just think of all the customers and fees I will get! Wooo hooo!

 

[jfulcer]

Thanks for the reminder, I just paid my bill online. Wasn't due until Jan. 1 but with the holidays, it would have been easy to forget!

That said, I have a question and wonder if anyone here can help. I have a high balance on a card with high interest. I signed up for a new card with a low balance transfer option, but the credit limit is only a fraction of what I'd need to transfer the entire high blanace. I haven't used the new card yet. If I call the new card, and explain I want to transfer a high balance, do you think they would let me? I have a great credit score and pay my balances on time.

They might. Can't hurt to ask. You might also offer to tell them you will close the other card out - offer proof of some sort. CC companies work based on the amount of outstanding credit you have. You're much better off not having the two high balance cards anyway...

 

[arminnie]

why is that??

Because with the current minimum payment it could literally take decades to pay off a credit card - not in the consumer's best interests to have no light at the end of the tunnel.

With very low minimum payment you could be tied to the bank for a very long time.

 

[disneymom3]

Never dealt with Chase but from the last few months, Capital One is atrocious. We have a new card that I used to buy some textbooks. We waited for the bill and it didn't come. DH went online and caled the automated service and it kept saying that no payment was due. Then we got a bill(This was a brand new card, first bill we received) and it had a late fee on it. WTH? We called them and told them we had tried to find out and their system said we didn't have a payment due yet. The woman essentially called DH a liar. We got them to remove the late fee and paid off the balance.

Now this month, DH had some charges for work. He went online and made the payment. Got the next bill shows no payment received and a late fee, plus the interest rate is jacked up. Went online to check and for some reason, the payment didn't post until 5 days after he made it.

We literally get preapproved offers in the mail every day. Capital one is out the door.

 

[hydster]

I would do what others have mentioned...either threaten to take you balance to another company and close this one or find someone who can truly help you with the problem at the current company. I don't know how in debt you are but seriously on Jan 1 all credit card minimum payments will almost double. If you have a $15,000 balance on your credit card and your minimum payments are 300/400 a month expect them to jump up closer to 600/800 a month! If you have a house I would consider getting a HELOC and transferring the balance from your credit card to a fixed interest rate and paying it that way. It will clear your cards, get you a MUCH lower interest rate than 18.9 and you will have a set minimum payment. If you don't have a home you can do that with then you will need to transfer your balance or talk to a manager and plead your case.

GL...I know we just made our last credit card payment yesterday from a debt we *inherited from family* and have been paying on for about 8 years!

I hope you can figure something out!

 

[Am_I_There_Yet]

Chase did the same thing to me a few years back. I was able to speak to a manager and she agreed that due to my payment history, she would delete the late charge and reinstate my old interest rate.

I agree with others, that it's better to either pay through online banking (only if they pay electronically), or through the CC's website. Maybe you could use that to your benefit? I'm sure the holiday mail has slowed down a lot of letters.

Chase (and others, I'm sure) will also periodically check your credit report (Which I am FIRMLY against) and raise your interest rate if they consider you a credit risk, i.e., credit cards with high limits, etc., EVEN if you have a perfect payment history and regularly pay higher than minimum payments.

This happened to me. I used two credit cards, instead of taking out a business loan, because the interest rates were lower. BIG mistake. Chase made me so mad, that I paid that one off within months, just to prove my point... as if they care.

They send out a letter warning you that it's going to happen, but the letter looks like so much other junk mail that you get. If you fail to "opt out", you're stuck with the new rate. Just another sneeky way to get you. I'm sure it's all there in microscopic print somewhere on your contract, but I still think it's wrong. It's like biting the hand that feeds you.

 

[Am_I_There_Yet]

FYI - I've seen many people on here mention paying off the Chase card (which I agree with) and then closing it out.

You don't want to close out that card. Doing so could possibly lower your FICO score. No matter how mad they make you, it will help to have the card's balance available on your credit history.

It would be better to get a second card and transfer the balance and leave the Chase card open. For instance: both cards have a $20k credit limit and you have $20k in debt. Your FICO score would be higher if you have the $20k in debt, but had $40k available to you, instead of $20k in debit and only $20k available. The latter shows you overextended and lowers your score.

If you're concerned about leaving a card open and not knowing if someone else is using it, charge something nominal on it each month, like gas and pay it off. This way you see the statement and you don't incur interest.

Just some little tidbits I've learned as a mortgage lender. Do an internet search on raising your FICO score, or what it takes to lower it. You might be surprised at what you find.

 

[AllyandJack]

MBNA did this to me about a year and a half ago. I had been a cardholder for 10 years and didn't have a single late payment. I got a tiny slip in my bill that said my rate was going from 10.99 to 18.99....for no reason. I call them up and got the rudest person possible. She said that she was going to ask me some questions "for demographic purposes". I said OK, figuring we'd get to the real issue after the questions. Well, the questions were what I did for a living, how much I made, whether I rented or owned and how much I paid for my mortgage. I stopped answering and asked why she was asking me these questions. She essentially told me that I had to "re-qualify" for the card. I refused. I qualified for the card 10 years ago and never made a late payment....that should be good enough to at least keep my interest rate from jumping 8 points for no reason. Apparently not. So, I told her I was going to pay the balance over the phone with my other credit card and close the account. She didn't even try to stop me. Oh well.

I transferred to my Citi Card and they actually called me and asked me if it was a balance transfer. I said technically, it was. So, they gave me a promotional rate!

For months after I paid off the balance, MBNA called and wrote to me to ask me to come back. No, thanks.

 

[cruiserkaren]

Chase did the same thing to me a few years back. I was able to speak to a manager and she agreed that due to my payment history, she would delete the late charge and reinstate my old interest rate.

I agree with others, that it's better to either pay through online banking (only if they pay electronically), or through the CC's website. Maybe you could use that to your benefit? I'm sure the holiday mail has slowed down a lot of letters.

Chase (and others, I'm sure) will also periodically check your credit report (Which I am FIRMLY against) and raise your interest rate if they consider you a credit risk, i.e., credit cards with high limits, etc., EVEN if you have a perfect payment history and regularly pay higher than minimum payments.

This happened to me. I used two credit cards, instead of taking out a business loan, because the interest rates were lower. BIG mistake. Chase made me so mad, that I paid that one off within months, just to prove my point... as if they care.

They send out a letter warning you that it's going to happen, but the letter looks like so much other junk mail that you get. If you fail to "opt out", you're stuck with the new rate. Just another sneeky way to get you. I'm sure it's all there in microscopic print somewhere on your contract, but I still think it's wrong. It's like biting the hand that feeds you.

We've had a similar experience with Chase concerning our interest rate. We have never paid ANY CC bill late, never been over limit etc... Our offense? Booking a $2000 trip to WDW and then paying it off! Seriously! I booked in August for our September trip. We went had a great time. Came home, the next CC bill we get I pay off the trip, which still left a small balance. Two months later I get a "letter" saying our terms had changed. I called to see why. I was told that they decided to change it because of "a quick increase in balance as compared to our limit". WTH? Even if we hadn't paid the WDW trip off the balance would have been no where near our limit. I asked the guy so I booked a vacation, paid it off and now I'm being punished for it? Of course he had no answer, only the standard...I understand ma'am, unfortunately there is nothing I can do about it.

Haven't used the card since and working hard to pay it off. What kind of customer service is that?

 

[Tigger_Magic]

Chase (and others, I'm sure) will also periodically check your credit report (Which I am FIRMLY against) and raise your interest rate if they consider you a credit risk, i.e., credit cards with high limits, etc., EVEN if you have a perfect payment history and regularly pay higher than minimum payments.

You can expect this to start happening more often now, because those low promo (single digit) rates don't bring in enough money. And there are plenty of rules the cardholder must abide by in order to maintain the rate. It's almost a certainty that somewhere along the line one of the rules will be violated. And if not, the company can simply use the old "you're a credit risk" argument to bump up your rate.

 

[tmt martins]

This is a great idea!

I also use MYCHECKFREE.com They have most of my bills Cell ,CAR,INS,CC this way I get 2 notices 1 from Holder and 1 from MCF I can pay them or file as a reminder.
I've used them for several years now and have never had a late payment.They let you choose the date and amount to pay and send away.

 

[HayGan]

BTW, the minimum payment due varies by customer and lender. All lenders were required to send you a notice as to any changes in your terms (which include minimum payments due) by now. Also, I believe that the changes went into effect at the end of October.

 

[momofmikey]

Just FYI, not all minimum payments are being raised. I have a zero percent credit card from Chase, and my minimum payments are staying at 2 percent of the balance until the promotional period ends which is August 1. I was told they are raising minimum payments on cards with high interest rates, or they are changing the percentage from 2 to 1 of the balance, but including finance charges and late charges as part of the minimum payment.

 

[WatchinCaptKangaroo]

Please stop panicking! Not all credit cards are doubling their minimum payments and those companies that are aren't doing it for all members!

They are basing this upon credit score, history and payment history. The best thing to do is call your lender and ask them how it will effect you.

They are also required to give notice (30 or 60 days I think) before they do this.

So please stop panicking and to those who are preaching this like it is a sure thing stop it!

 

[arminnie]

Please stop panicking! Not all credit cards are doubling their minimum payments and those companies that are aren't doing it for all members!

They are basing this upon credit score, history and payment history. The best thing to do is call your lender and ask them how it will effect you.

They are also required to give notice (30 or 60 days I think) before they do this.

So please stop panicking and to those who are preaching this like it is a sure thing stop it!

Correct - not all lenders are raising the minimum payment, but 5 of the top 10 credit card issuing banks have announced that they will. Your bank may have already been requiring a higher percentage.

The only way to know for sure what will happen to your account is to call your bank.

 

[Nik's Mom]

BTW, the minimum payment due varies by customer and lender. All lenders were required to send you a notice as to any changes in your terms (which include minimum payments due) by now. Also, I believe that the changes went into effect at the end of October.

That's what I read too. I know my Chase payment went up a bit. But it wasn't that big a deal for me since that larger payment goes to the principal owed.

 

[edcrbnsoul]

Do what you can to get rid of the debt and the credit cards.


There are 1.2 billion credit cards in circulation in the U.S. and 185 million American consumers carry them.

The average American carries 6.5 credit cards.

There were 1.3 million credit card holders who declared bankruptcy in 2000.

The average college freshman carries $3,000 in credit card debt.

The highest interest rate charged by a credit card company so far is 41 percent.

The average credit card debt for American households has increased 173 percent in the past decade according to CardTrak (as reported in USA Today, October 2003).

In 1992, it was just $3,275 per household. It is currently up to $8,940 per household (figures for 2002)