Bank Raises Credit Card Rates (Vanity

Now, I know that since I have never had to pay interest on this card it really does not matter because I have no intentions of ever paying interest on it.

However, I would like to know if anyone else is getting similar letters and if anyone knows why the banks would risk dropping an account in good standing?

Seriously, is this a new trend?

Let me guess, Capital One?

This is a good thing. If you don’t keep a balance you need not worry about it, even If it was 100%......

Not that I’m aware of but I only use Amex. I usually pay off each month so I don’t run a balance to see if there is an interest increase.

You’re a credit card company’s worst nightmare. I’m surprised they didn’t drop you a long time ago. Plus, 7 percent ain’t a bad rate.

Not much of a mystery. Sounds like your bank is in trouble and desperate for cash.

1. Yes, it’s a new trend.
2. What difference does it make, since you pay the balance off every month anyway?

Yes, in the hearings with the bank CEOs a few weeks back, one of the Senators said she was hearing the same story from her constituents frequently. It happened to me, too. So we’re paying off the balance with a local credit union account and taking interest away from them.

They are doing this before the laws change next year when they can’t jack up the rates anymore. It’s nice to see that, when given the opportunity to do the right thing to help the economy recover, the banks do everything wrong, thus forcing Obama’s hand to further regulate their actions by the iron fist. (That’s sarcasm, for those who might miss it.)

Oh yeah—they’re all doing it. They target the people who do pay, because that way they will actually make money. It’s a stupid, short-sighted business tactic, as I started closing my accounts.

I do carry balances because of some financial trouble I had, but always take care to make my monthly payments. Closing the accounts will hurt my credit score, but I have a feeling the credit score will be meaningless before this mess is over.

No, this is a ongoing trend. I listen to Clark Howard and this is something he put out:

http://clarkhoward.com/liveweb/shownotes/2008/10/28/14324/

Oct 28, 2008 -- Credit card issuers jacking up rates for no reason

Clark is getting scattered calls from listeners who are outraged or perplexed by the actions of their credit card issuer. The issuing banks are raising interest rates by 20% or more -- even if the individual has good credit, has never been late or hasn't even had any change in their credit standing. This is happening across income levels, affecting even successful business owners and moderate to wealthy individuals.

Fortune confirms that people have seen their rates skyrocket for no reason. The magazine profiled a man named John who had a card that went from 7% to 26% even though nothing changed with his financial standing. Bank of America, Citibank and Capital One are among the issuers who are jacking up rates in the face of a "continually changing business environment" -- which simply means "we're doing it because we can."

The Federal Reserve says that 37% of issuers have increased rates. And get this, Business Week reports that the dollars at risk with people who may not pay is greater in the credit market than in the mortgage market. As the magazine writes, "The consumer debt bomb is already beginning to spray shrapnel throughout the financial markets."

The problem with banks jacking up the rates is that they're making it tougher for someone who might have been able to pay at 5%, but could never pay at 30%. They're shooting themselves in the foot.

Here's the takeaway: The only smart move is to pay your debt down or pay it off. Don't assume you're a sitting duck if your standing is decent; you can shop around for a lower rate offer.

Meanwhile, a special warning: If you're in debt over your head, be wary of those debt negotiation firms that are all over the Internet and late-night TV. They're through and through rip-off artists, according to Clark. Do not believe these lying fools about their ability to negotiate with your credit card company and reduce your outstanding balance by 50% or more. These con artists get you to pay them money as a retainer and then tell you to stop making all payments. But many banks won't even take a phone call from these people anymore because they're on to their game.

So what can you do? Try calling your issuer and telling them you're in over your head. You may get blown off or they may work with you. If you get the cold shoulder, go to NFCC.org and find a local affiliate who can help you to come up with a debt-conquering plan.

I got similar letters from Capital One and from Target VISA

I have 2 citibank accounts and they did this. Call them and argue with them they should be able to give you a lower promotional rate. I pointed out to them that it is my taxes that are bailing them out and then they turn around and screw me. I think there was a bill in the offing that would restrict them from raising the rate on your current balance and that the new rate would only apply to new purchases. So they all of course rushed in to raise the rate before that would go into effect. Chase however did not raise the rates at least for my account so they will be getting my business. Bastards, all of them.

Yep, they raised mine again!!!

Similar thing here ... I pay monthly. They make money off the merchants. More and more merchants are offering discounts for cash ...

"banks would risk dropping an account in good standing"

They could give a rat's behind about your business.

We also received the letter stating our interest rate is being raised. If we do not except the new rate we can close the account... which we did.

We also never carry a balance on our credit card and when we do use it... we pay it off totally... so month by month its' zero. We are considered "deadbeats".. the CC company does not get any % from us and plus we don't use it much. Thus, we cancelled our credit card.

If you never run a balance and always pay before it’s due then what do you care what rate they charge?

The other day I called up my card company, and told them i was cancelling. They begged me to stay, even though I never use the card. They gave me 4.99% rate for one year, then 6.99 after that. If they jack it up, I'll just call em back. I really don't know why I keep the card. I guess I like to have options. But I've got an emergency fund. I never use it.

I say call em up. If you don't get a better deal, cancel it. Use a debit card. Just as convenient. I use a debit card tied to a bank account that has my spending money in it. The rest is in a seperate account with no debit card (for safety).

I never charge anything i use a atm card tied to a checking account only. that never has a ton of money in it. if someone wants to clean me out it aint gonna break me F the card companies

I have a BOA card and have done that very thing for the past year. We get points for using the card and they make money from every purchase.

Though we don’t carry a balance they are still making money...