How often does a credit card raise it's rate

[quest4me]

I was also was having problems with Chase. I had a Bank One card and a Chase card. Bank One was at 7.9% then jumped to 30% when they were bought out by Chase, which resulted in me having two Chase cards. My original Chase card went to 30% also and I was shell shocked with the interest fees they wanted. I had never ever been late on making payments.

So I'd started making phone calls asking why they were hiking my payments to an amount I couldn't pay. They wouldn't bend and just kept asking if I could take care of the bill that day. Of course I couldn't! That's when the phone harassment started both at home and work. I think at least a million acres of trees were used on just on the amount of letters they were sending me, which came nearly everyday.

The credit card companies have gone berserk. Read the fine print closely. But they messed with the wrong gal and I took them to court, so now they get nothing.

[lrprn]

The credit card companies have gone berserk. Read the fine print closely. But they messed with the wrong gal and I took them to court, so now they get nothing.

Agree that credit card company greediness has spun out of control. However, even though yours didn't get any more money from you, they likely made up for what they lost from you from others who are still trying to pay the exorbitant APRs and late fees, plus they also get some renumeration from their default insurance companies.

If the cc companies weren't making money from this "kill the golden goose" approach, they wouldn't be doing it.

[FilingOnMyOwn]

i had a american express card
7000 limit

6400 charged on it

never missed a payment

one day i got a letter and it said i was now considered high risk, my rate went from 6% to 21% and they lowered my credit limit to 3000. then they started charging me like a 160 $ over the limit fee cause they droped my limit

and i never missed a payment till that letter came, was the last time i ever paid a dime to them

Thats great.

Ultimately, creditors make the foolish decision of not really wanting their money. They've done it to many of us.

[bethe23432]

LRPRN, I agree that it's disconcerting to know that others are paying high interest rates, etc. for those of us who throw in the towel, but at least I'm not one of them anymore. What a vicious circle!

[JusticeForAll]

I wonder if that is why they all report the debts as a charge off, rather than IBB, even after many disputes, some won't budge on that?

I wonder if they have to report it as a charge off in order to file their insurance claims? (you know, some small print in their insurance policies)

But they still do--they have insurance for people that are BK plus there's got to be some kind of tax loophole that probably helps them out.

[tradewiz50]

I'm really wondering why to even charge anything any more...

Pay your credit card balances in full each month and you will not have an issue like this.

[IOIOIO]

they likely made up for what they lost from you from others who are still trying to pay the exorbitant APRs and late fees, plus they also get some renumeration from their default insurance companies.

If the cc companies weren't making money from this "kill the golden goose" approach, they wouldn't be doing it.

Yeah, it *has* to be the case that this works for their bottom line. Even if it causes defaults in many cases, they must believe they're generating more revenue than they believe they're losing on the defaults they cause. The other way it can work for their bottom line is if "kill the golden goose" did not actually maximize their revenue, but somehow hurt their competitors more than it hurt them. For example, maybe the company that delivers the knockout blow gets a few dollars out of you then leaves a corpse that none of your other creditors can get a penny out of. That strategy can work for the really big players. I'd sure love to see the numbers, or be a fly on the wall of a room full of digit heads. More on this same topic is at this thread: http://www.bankruptcyforum.com/showthread.php?t=9945


But this business of reducing your limit so that your outstanding balance is over the new limit in order to generate a fee on the spot has to be more complicated--it just doesn't sound legal. There must be some notice they're required to give as to some statutorily required lead time. Myself, I've had limits reduced, but the new amount is always carefully engineered to be just high enough to be over my outstanding balance plus that month's finance charges. Creating fees out of thin air might be against the law. Does anyone know about this in more detail?

[anonymuse]

Pay your credit card balances in full each month and you will not have an issue like this.

Not always true. In some cases (read the fine print), people who never carry any balance at all and pay in full are considered a type of deadbeat creditor since they never make any money for the cc company. There are times where your rate will be increased with this scenario.