cc pushing account holders into default

[IOIOIO]

And don't you just love when they lower the LOC to exactly what you owe, so the next month when they add interest, it forces you over your credit limit and they hit you with the over the limit fee

Has this generation of over the limit fees actually happened to anyone? Chase lowered my limit to an amount slightly, but carefully above my outstanding balance, and I assumed it was to cut me off without generating fees in a way that would make it their fault. I mean, why not just lower the world's limit tomorrow, generating a fee on each account, then raise the limit right after? I suspect there's a limit to what they can do to generate an error on your part and they have plenty of built in and legal ways to do that.

I can at least see a legitimacy to a creditor's lowering your limit or refusing new charges when they want. I can always refuse to lend someone more money when they ask me. The "jack your rates" trick--when it's not an APR correlated to the prime rate--looks more underhanded to me, and I'd love to see a history of the legislation that allows it. They unilaterally start extracting more money out of you once you're committed, but unlikely to be able to pay off in one lump some. Could a car dealer do the same thing by raising your rate after a year of payments while you still owe $15,000 and can't pay the balance to avoid the jacked up rate? Imagine the outrage if they tried it. Or what if I loaned $1000 to my friend on the condition that he pay me back $1100 by next year, then six months later I told him he had to pay me $2000 by year's end instead of $1100 just because I think he's a bigger risk than when I first loaned him the money. I bet he wouldn't pay me the $2000.

The schedule of fees and errors looks to me like the mine field they set for you and then give you a fine print map to: in theory you can avoid it by being good. The jack the rates trick has more of the feel of a blatant rip off, though I assume it's legal to do on unsecured lines of credit.

[lrprn]

If you have some time, read PBS Frontline's "The History of the Credit Card" at http://www.pbs.org/wgbh/pages/frontl...s/credit/more/ . Spells out everything we've been talking about here on this thread and more.

[JusticeForAll]

YES!!!!!! Both MBNA & Chase did just that to both of my accounts!

Has this generation of over the limit fees actually happened to anyone?

[davids]

credit cards...

I'm sure this is an old story probably posted on these forums somewhere, but I'm so outraged that it just happened to me.

Even though this is going to change soon, I'm still up to date on all my credit card payments. Even so, Chase upped my rate from 17.74% to 29.99% for no particular reason. That raises my monthly minimum a *lot*. I called them and verified that this wasn't some sort of penalty rate for any kind of mistake I made on the account. They said the rate was changed only because of what a credit bureau reported to them as my outstanding debt ratio. So even if you manage to kill yourself paying them, they turn the screws tighter for no good reason other than that they have already turned the screws tight.

If not everyone responds to this kind of thing by filing bk, they must know that they are forcing people into earlier defaults on their accounts. Do they have a reason for that? Or is their plan to get a few more dollars ahead of the other creditors because they've calculated that you're inevitably going to default? I just don't understand their business strategy here.

bad decisions on their part, and talking to them about it is like talking to yourself in the mirror... I have 1 cc that did that to me, because of my misdeeds on my credit report, they decide to up their fee, but thats ok, that one cc has a limit anyway, and might be worth keeping around to help re-establish credit...

[AMISLANDER]

I just finished reading this!

If you have some time, read PBS Frontline's "The History of the Credit Card" at http://www.pbs.org/wgbh/pages/frontl...s/credit/more/ . Spells out everything we've been talking about here on this thread and more.

...And wish I would have had this information a long time ago...the tactics with the Sally f/Sears store are just over the roof...unbelievable...ya know, I might not ever have a cc again after this information...when did PBS air this series?

Everyone should be mad & reading where their creditor is located, i.e. South Dakota, perhaps??? I may have to re-read the whole article again...just to make sure I'm not confusing things...

again, Wow!!!

[razorguns]

To be blunt, if you pay your bills on time - u won't have that problem.

And with online banking ebills, it's even easier now.

find a card that can automatically withdraw from your checking account if ur lazy.

r

[anonymuse]

To be blunt, if you pay your bills on time - u won't have that problem.

And with online banking ebills, it's even easier now.

find a card that can automatically withdraw from your checking account if ur lazy.

r

Very true, very practical---having cc for post-BK is more about rebuilding credit and living within your means and taking advantage of that fresh start.

I'm not sure what I would do without online bill paying and auto bill pay.

[Bobby'sGirl]

Don't trust them...

To be blunt, if you pay your bills on time - u won't have that problem.

r

Sounds good in theory, but for Chase, they lowered me from $16,500 limit to $4,900 without any lates anywhere. I had run up my cards close to limits starting up a business. And that limit lowering triggered an overlimit fee, because a large charge for my business was posted the day after the limit lowering. Started a cascade effect, and within 6 months all my accounts with Chase, MBN and Bank of America were out of control on interest rates and minimum payments. I had never had a late in 30 years of using credit; now I am in bankruptcy.

As for direct withdrawal...can be hard to get those stopped quickly, as I've found out with both my utilities and phone company. They were still pulling out months after stopping authorization, and cost me stop payments at the bank plus "returned check" charges with the companies even though they had received full payment by mail or online before due dates. I still use it for insurance and mortgage with my new bank account, but ....

[razorguns]

Sounds good in theory, but for Chase, they lowered me from $16,500 limit to $4,900 without any lates anywhere. I had run up my cards close to limits starting up a business. And that limit lowering triggered an overlimit fee, because a large charge for my business was posted the day after the limit lowering. Started a cascade effect, and within 6 months all my accounts with Chase, MBN and Bank of America were out of control on interest rates and minimum payments. I had never had a late in 30 years of using credit; now I am in bankruptcy.

As for direct withdrawal...can be hard to get those stopped quickly, as I've found out with both my utilities and phone company. They were still pulling out months after stopping authorization, and cost me stop payments at the bank plus "returned check" charges with the companies even though they had received full payment by mail or online before due dates. I still use it for insurance and mortgage with my new bank account, but ....

at $16g's, i'd have just gotten a personal bank loan. Its scary to have a CC with that much on it. Never know what may happen next month. But i understand ya. Chase is one of those companies that f's over their customers. Glad they lose that money in your bk. That'll teach them.

r

[AMISLANDER]

went home & read my latest cc offer from Washington Mutual...

...cover to cover...and there it was every thing in black and white about raising rates, lowering limits, charging late fees...EVERYTHING....and the major disclaimer...they can change anything anytime they want for any reason.

Why bother to have a cc??? And this bank is based in Nevada and specifically states that you are governed by the rules of Nevada when you use that card...

what a scam...I am so over this.

[anonymuse]

Just a side comment here: we all know that we are ultimately responsible for our actions. However there was a lot of BK reform designed to help the creditor yet nothing was done against predatory lenders. It works both ways.

[IOIOIO]

An interesting follow-up: I just had a Bank of America card go over the limit due to the monthly finance charge, and not as an immediate result of any charge I made. I only discovered this when I went to make my payment online. Their web site has been having difficulties so I had to call in to make a payment over the phone. The person arranging the payment told me, without my having to ask, that there'd be no penalty charged and no change in my 8% interest rate. That's a lot different from the way Chase does business, but now that Bank of America has merged with MBNA we'll see how that goes.

My Bank of America statement includes the paragraph:

Default Pricing Clarification to Notice of Change in Terms:

For each balance category, we may increast the APR on all new and outstanding balances up to the Default Rate, without giving you additional notice, when, during any twelve consecutive rolling billing cycles: (1) we do not receive two Total Minimum Payments Due by their respective Payment Due Dates; or (2) your total outstanding balance exceeds your credit limit on your Closing Date and your account had been overlimit in a previous billing cycle during this period.

So B of A only penalizes people who are actually delinquent, not people with accounts in good standing who someone else tells them is a bigger risk than they were last month.