Wow just opened BofA statement and my interest went from 1.99% to 28.99%

[Andyman]

I always paid on time and usually paid a little extra. Then one month I was one day late on both cards and my rate went from 6% to 28.99%. I had no choice but to file.

[Flamingo]

Understanding the terms of an agreement doesn't always make the agreement right, fair or legal. In contract law, which is codified by each individual state, typically the terms must be fair and reasonable. There is an inherent presumption by the consumer that the creditor who extends credit is doing so in a manner that is fair and will enable the borrower to pay back the loan. The consumer is permitted to assume that their lender is acting in good faith. One of the affirmative defenses used to defend a debtor against defaulting on a contract is that the terms are "unconscionable" and if a judge or jury agrees that the terms are unconscionable, the borrower is relieved of the debt, even IF they signed and understood. The legal interpretation is that a creditor (usually a large business or corporation, not an individual selling a car) has a higher level of responsibility to draft fair terms. The expectation that each and every individual who borrows money or signs a credit agreement even has the education or capacity to understand those terms is unreasonable, so most states have codified a businesses responsibility to their customers in such circumstances.

Unconscionable contract terms can be crystal clear or much more ambiguous.
Should we to assume that just because the terms of a credit card issuer are in writing that they are fair? The credit card companies would like you to think so, and in fact that is a tactic they use to get you to pay. If no one calls them on it it will continue, even if it is not right, fair, or legal. Our system is a reactionary system. Laws are set up in reaction to an event. A person/business will sue another person/business in reaction to an event. And so on.

The problem for consumers is, once they get to the point that these "unconscionable" terms are presented to them, they are in an unfair position, they are usually already in debt, or lack the education/time/capacity to get it, OR they were lulled into a false sense of security that their credit card company actually cares abut them. It's called predatory lending, and it's illegal, unethical and unfair.

So to say "you should have read the terms, next time read the terms an learn from your mistakes" is a simplistic point of view that assumes that what the credit card companies are doing is completely legal and fair.

With all the unscrupulous lending practices of the past few decades, unless one lives in a cave with no form of communication one should be aware of the lending practices in today's society. I agree with your posting but businesses are not in business to be fair, they want to make money for themselves and their shareholders. Again, the heading to this thread is "Wow just opened BofA statement and my interest went from 1.99% to 28.99%." My entire point in this thread is that if that occurs and the contract one signed is breached, that should not be a shock if one educated themselves as to what was in the contract/agreement signed at the time of credit issuance. My whole point in this thread is to try to get folks to educate themselves as to what they are signing for; while it's nice to be extended credit, there are risks and obligations that go along with it that should not be a shock to anyone. If all of the folks who fell in the predatory lending trap as to their mortgages did their homework ahead of signing those papers, they would have realized they could not really afford to have purchased the house or may not be able to refinance at a specific time and that they were taking on a big risk. A couple was mentioned in an article I read somwhere (Newsweek I believe) stating that when they went to refinance their ARM they were shocked to learn they had a huge prepayment penalty in their paperwork that they were not aware of. If they had read those documents, asked questions, did their homework or had an attorney read those documents, they would have known that and maybe not have taken the loan in the first place.

I am not here to state that I believe banks are OK in their ways as to lending; one needs to educate oneself as to lending practices, contracts, clauses and small print before one signs. The couple I cited above is a clear example of that. Banks want to make money and they make it off of their customers. No one forces anyone to sign a document; one can always say No. When you sign for credit, you are asking to use someone else's money under certain terms and to pay back that money under certain terms. Credit has become so easy in this country that it appears people have lost sight of that and feel entitled to certain things that are not listed in the contract they signed. Education is the key and hopefully this meltdown will spur folks to educate themselves more as to credit/finances and sit down with their kids to prepare them for the credit/financial world.

[Flamingo]

Understanding the terms of an agreement doesn't always make the agreement right, fair or legal. In contract law, which is codified by each individual state, typically the terms must be fair and reasonable. There is an inherent presumption by the consumer that the creditor who extends credit is doing so in a manner that is fair and will enable the borrower to pay back the loan. The consumer is permitted to assume that their lender is acting in good faith. One of the affirmative defenses used to defend a debtor against defaulting on a contract is that the terms are "unconscionable" and if a judge or jury agrees that the terms are unconscionable, the borrower is relieved of the debt, even IF they signed and understood. The legal interpretation is that a creditor (usually a large business or corporation, not an individual selling a car) has a higher level of responsibility to draft fair terms. The expectation that each and every individual who borrows money or signs a credit agreement even has the education or capacity to understand those terms is unreasonable, so most states have codified a businesses responsibility to their customers in such circumstances.

Unconscionable contract terms can be crystal clear or much more ambiguous.
Should we to assume that just because the terms of a credit card issuer are in writing that they are fair? The credit card companies would like you to think so, and in fact that is a tactic they use to get you to pay. If no one calls them on it it will continue, even if it is not right, fair, or legal. Our system is a reactionary system. Laws are set up in reaction to an event. A person/business will sue another person/business in reaction to an event. And so on.

The problem for consumers is, once they get to the point that these "unconscionable" terms are presented to them, they are in an unfair position, they are usually already in debt, or lack the education/time/capacity to get it, OR they were lulled into a false sense of security that their credit card company actually cares abut them. It's called predatory lending, and it's illegal, unethical and unfair.

So to say "you should have read the terms, next time read the terms an learn from your mistakes" is a simplistic point of view that assumes that what the credit card companies are doing is completely legal and fair.

With all the unscrupulous lending practices of the past few decades, unless one lives in a cave with no form of communication one should be aware of the lending practices in today's society. I agree with your posting but businesses are not in business to be fair, they want to make money for themselves and their shareholders. Again, the heading to this thread is "Wow just opened BofA statement and my interest went from 1.99% to 28.99%." My entire point in this thread is that if that occurs and the contract one signed is breached, that should not be a shock if one educated themselves as to what was in the contract/agreement signed at the time of credit issuance. My whole point in this thread is to try to get folks to educate themselves as to what they are signing for; while it's nice to be extended credit, there are risks and obligations that go along with it that should not be a shock to anyone. If all of the folks who fell in the predatory lending trap as to their mortgages did their homework ahead of signing those papers, they would have realized they could not really afford to have purchased the house or may not be able to refinance at a specific time and that they were taking on a big risk. A couple was mentioned in an article I read somwhere (Newsweek I believe) stating that when they went to refinance their ARM they were shocked to learn they had a huge prepayment penalty in their paperwork that they were not aware of. If they had read those documents, asked questions, did their homework or had an attorney read those documents, they would have known that and maybe not have taken the loan in the first place.

I am not here to state that I believe banks are OK in their ways as to lending; one needs to educate oneself as to lending practices, contracts, clauses and small print before one signs. The couple I cited above is a clear example of that. Banks want to make money and they make it off of their customers. No one forces anyone to sign a document; one can always say No. When you sign for credit, you are asking to use someone else's money under certain terms and to pay back that money under certain terms. Credit has become so easy in this country that it appears people have lost sight of that and feel entitled to certain things that are not listed in the contract they signed. Education is the key and hopefully this meltdown will spur folks to educate themselves more as to credit/finances and sit down with their kids to prepare them for the credit/financial world.

[syn]

Yup, looking at all the credit cards my dad is putting in his bankruptcy his apr percentage is now in the high 20's and they take on $800 + a month in "misc. fees" no wonder he stopped paying them! Even if you are behind one month you can never catch up again especially if you have a high balance.

[njguy1972]

This is the reason I am on this board. Up until this month I had no late payments or missed payments. I will admit I was using my credit cards a little too much and ran up big balances over the past 4 years.

They moved my rate from 11% to 25.99%. At the same time Amex removed all my available credit.

I was probably destined for bankruptcy anyway but was hooping with a work bonus, tax refund, and new job to get out of it while the interest rates on my cards were reasonable. I guess they made the decision for me.

[Flameout]

This was one of the main reasons that I had to finally file for BK. CC companies that had increased their interest rates to loan shark levels. There is no way an average hard working individual with 28 to 32 % interest can ever pay off their cards. I figures that if the CC companies can change their fees and other parts of their contracts without my consent so could I. I changed mine to a no payment ever policy. They left me and others no choice.

[ready2puke]

No payment ever policy...ya gotta love that. Thanks for the chuckle

[BigJohn]

Exactly! And to say that you knew it MAY happen because it was in he fine print of your agreement illustrates precisely what I was talking about in my previous post. How many "may"s or "could"s are in the agreement? Yes we signed them, but these agreements give the credit card issuer entirely too much leeway. Consumers have the right to expect fair lending practices, not just in their mortgages and secured loans, but with unsecured credit as well. The system needs fixing, one way or another.

How many "may"s or "could"s are in a typical mortgage? Not many. Usually the language states "will". A contract with too many "may"s or "could"s isn't a valid contract. It is predatory.

A lot of the credit cards I had were introduced to me thru the mail as pre-approved blah blah blahs. I would call the number and they would send the card. They always made sure I understood that the interest was (low amount). When I got the card, the terms would be included. I believed what I was told and never looked at the fine print.

With some of the cards, when you go to make the first payment, it would take 2 weeks (give or take) to set up the arrangement. This meant the first payment would be late.

I also noticed some payments did not occur on the same day of the month. For example, I would pay last month the bill on the 15th but this month it is due on the 11th. This caused problems.

Another problem is the bill would be due, lets say, on the 12th. I go to pay it o the 12th and it would be a day they don't except payments (generally Saturday or Sunday).

[Doghouse]

Many of us are educated and actually do read all the fine lines, fine print, fine words etc. Problem is in life things change. If I was completely okay and capable in signing the contract when I had my normal job or was in good health or the economy was good or before the baby or before the accident etc and circumstances change, then if big bank is not willing to acknowledge the change in circumstances and renegotiate the terms, then there are consequences. For both big bank and myself. Things moves at the speed of life. Life is give and take.

For example, I was also on jury duty a while ago and served on a case. I do not get paid by my employer. Eight days of missed work caused me to miss a payment by two days and despite me calling and explaining to citibank BEFORE I was late that I'd be late, they still jacked up my rate from 2.9% to 28.99%. The yearly interest servicing my Citibank balance just went up 999.66%. They refused to reduce the rate.

It's not okay to raise your hand and tell someone you are going to tap 'em on their forehead with your finger and instead land a punch with a closed fist. That's what the CC banks are doing.

[Flamingo]

Many of us are educated and actually do read all the fine lines, fine print, fine words etc. Problem is in life things change. If I was completely okay and capable in signing the contract when I had my normal job or was in good health or the economy was good or before the baby or before the accident etc and circumstances change, then if big bank is not willing to acknowledge the change in circumstances and renegotiate the terms, then there are consequences. For both big bank and myself. Things moves at the speed of life. Life is give and take.

For example, I was also on jury duty a while ago and served on a case. I do not get paid by my employer. Eight days of missed work caused me to miss a payment by two days and despite me calling and explaining to citibank BEFORE I was late that I'd be late, they still jacked up my rate from 2.9% to 28.99%. The yearly interest servicing my Citibank balance just went up 999.66%. They refused to reduce the rate.

It's not okay to raise your hand and tell someone you are going to tap 'em on their forehead with your finger and instead land a punch with a closed fist. That's what the CC banks are doing.

I agree but, however, my point is still being missed...no where in the contract you (I am using the term "you" to cover everyone) sign does it state that if you have a misfortune befall you, lose your job, have twins, become ill, etc., etc. that you can stop your payments and not pay the bill or that they will lower your interest or payments if that happens. We assume/hope they will cut us a break which never occurs (banks/lenders do not make money on emotions and breaks). However, as you well indicate, the bank protects itself with various terms and conditions that you agree to. They don't care if we lose our job, get ill and can't work, are on vacation and can't get the payment in on time, the hospital bill for the baby comes in for thousands of dollars, etc., etc. It's business with a signed contract. Therefore, the entire agreement is to the benefit of the lender if you default. Maybe we as consumers should be allowed to insert a clause that protects us in the event of lowered income, illness or job loss; but then the creditor/business would not make any profits from lending money.

[epiphany]

Court will still be in session in our district, there are cases scheduled all day.

Election day is not a holiday in Minnesota. There are only 8 states in the USA that consider it a holiday. Delaware, Hawaii, Kentucky, Montana, New Jersey, New York, Ohio, and West Virginia.

yep, not a holiday here in Cali.

ep

[Doghouse]

Flamingo, I understand what you are saying. We all sign contracts despite knowing the pitfalls of not adhering to any part of the contract, fair or not. But that's really going textbook on us in a so called perfect world. In a perfect world, we'd all pay our mortgages and there will never be any forclosures. In a perfect world I'd never lose my job. In a perfect world that hurricane or tornado or mudslide or fire or flood or accident never happened. In a perfect worl my car didn't just die on the day I got a pink slip. In a perfect world AIG will be allowed to fold and not get bailed out by the govt for not fulfilling their business contract. In a perfect world I won't need that root canal surgery right when I have no insurance. In a perfect world I'd get pepperoni and sausage on my pizza and not jalapenos and anchovies when I executed a contract with the pizza joint by exchanging money for a pizza order.

We don't live perfectly in an imperfect world.

[Flamingo]

Flamingo, I understand what you are saying. We all sign contracts despite knowing the pitfalls of not adhering to any part of the contract, fair or not. But that's really going textbook on us in a so called perfect world. In a perfect world, we'd all pay our mortgages and there will never be any forclosures. In a perfect world I'd never lose my job. In a perfect world that hurricane or tornado or mudslide or fire or flood or accident never happened. In a perfect worl my car didn't just die on the day I got a pink slip. In a perfect world AIG will be allowed to fold and not get bailed out by the govt for not fulfilling their business contract. In a perfect world I won't need that root canal surgery right when I have no insurance. In a perfect world I'd get pepperoni and sausage on my pizza and not jalapenos and anchovies when I executed a contract with the pizza joint by exchanging money for a pizza order.

We don't live perfectly in an imperfect world.

People filing BK and in a bad financial way are in denial; I know, I have been there myself and so have most others on here. Reread the title to this thread and then reread the several postings stating how bad the banks are to those with credit. Being in denial and complaining are just excuses for the reality of the situation. The reality is banks just don't care about your personal situation and go by the written word in contracts so there should be no surprises as to what they do when you miss your first payment. This is just plain, real world reality - nothing perfect about it. We all allowed it to occur and then when the illness, job loss or lessened hours hit and we can't make the payment or pay the bill at all, we wonder why the interest rates rise and the phone calls start. People hate to say it's their fault; but every bill we have is our fault and if they are not paid, we are at the mercy of the creditor and what is in that agreement we signed. If large balances are carried and the job loss or illness hits, it should be no surprise to us that we are going to be stuck and if we did not have that high debt, we would not have to consider the possibility of filing BK. No one likes to face that fact but reality is a good teacher.

[fltoo]

So true Flamingo. I am now living below my means WITH an emergency fund in place.

[ansky0007]

People filing BK and in a bad financial way are in denial; I know, I have been there myself and so have most others on here. Reread the title to this thread and then reread the several postings stating how bad the banks are to those with credit. Being in denial and complaining are just excuses for the reality of the situation. The reality is banks just don't care about your personal situation and go by the written word in contracts so there should be no surprises as to what they do when you miss your first payment. This is just plain, real world reality - nothing perfect about it. We all allowed it to occur and then when the illness, job loss or lessened hours hit and we can't make the payment or pay the bill at all, we wonder why the interest rates rise and the phone calls start. People hate to say it's their fault; but every bill we have is our fault and if they are not paid, we are at the mercy of the creditor and what is in that agreement we signed. If large balances are carried and the job loss or illness hits, it should be no surprise to us that we are going to be stuck and if we did not have that high debt, we would not have to consider the possibility of filing BK. No one likes to face that fact but reality is a good teacher.

Yes, We all understand what you are saying but my point anyway is with them jacking everyone from promo rates to unrealistic 28.99% rates they are only hurting everyone. If they were more reasonable lets way 12% or so when a dafault occurs many more people would continue to pay them instead of going BK on them.