Just read this about credit card companies

Jstas

After all the legislation that got put in place this article spells out some of the new ways the crook companies...I mean credit companies are doing their best to screw you. Yeah, everybody's got to make a buck but most of this stuff has no other purpose but to separate you from your money for absolutely no reason other than the credit companies want it.

When I was a kid we called that a bully.

http://money.cnn.com/galleries/2009/news/0910/gallery.credit_card_evil_things/index.html


Makes me soooooooo glad I was able to pay off credit cards in August!

dkg999

I just had a cc cancelled by the issuing bank because I only used it periodically and I paid the balance off immediately. I have one I keep a balance on and just consider it the cost of having an immediately available line of credit (just in case I need to buy new audio gear for medicinal purposes ). The cc companies are going to get their pound of flesh, one way or the other!

thuffman03

If you don't like the game then leave the field. Same goes with credit cards. If you don't like the way they are treating you don't use them any more.

Last time I looked cash still works at the check out counter.

buymesome

There's some new law kicking in next year about cc companies not being able to charge your balance . My mom has a large balance so what they are doing is raising the rates right now like crazy and its just going to escalate until this laws passed . So if like my mom you have a large balance then your about to be bufu'd

Jstas

thuffman03 wrote: »

If you don't like the game then leave the field. Same goes with credit cards. If you don't like the way they are treating you don't use them any more.

Last time I looked cash still works at the check out counter.

Thanks, dad! We all needed that lesson because it's obvious no one has figured it out for themselves yet. :rolleyes:

pmckeealaska

I tend to agree with thuffman on this one, though in order to get anything a big value these days (house, car, etc) you need to have established good credit (unless of course you can pay for those kind of things with cash, whcih I doubt most of us could do). However, I have zero sympathy for folks who build up huge balances and then whine about being in debt. This isnt free money folks. So many Americans have zero impulse control its pathetic.

dpowell

This is just the tip of the iceburg. Just wait until the CC companies start failing for the same reasons the banks started failing when the subprime mortgages stopped paying. Then we'll see more of this behavior and of course more of our taxpayer dollars going to bail out the 'too big to fail' CC companies which means we're stuck paying the tab for those who couldn't control their own spending in the first place. (not a jab at those who find themselves in debt due to unfortunate life circumstances).

madmax

I buy everything on credit cards but always pay in full at the end of the month. The way I look at it is you don't buy what you can't afford. However, I have been known to occasionally buy a piece of audio equipment that breaks my own rules and I pay it off the next month.

In my opinion most people are slaves to debt of their own free will.
madmax

vmaxer

I can see both sides, but the credit card companies should have to uphold their end of the deal!!:eek:

They suck many people in by promising low rates and give them to you.....until you build a balance. If I loan you money and say 4.99%, it should be that until it is paid as long as the payments are on time. If they are late, there should be a late fee. They charge a late fee and boost the rate by an additional 20 to 25% from then on. This is wrong to me.:mad:

I have had a couple of card companies try it on me...Luckily, I was able to pay them off and tell them to go pound sand:p

WilliamM2

However, I have zero sympathy for folks who build up huge balances and then whine about being in debt. This isn't free money folks. So many Americans have zero impulse control its pathetic.

It's not just irresponsible people getting screwed. This is how Chase is ruining peoples credit.

A friend of mine had a car loan at 5.99% with a balance of about $18,000, payment is around $550. His Chase credit card offers to transfer the balance for 2.99% for the life of the loan. He has to pay a minimum of 2% of the balance a month, $360 a month, he continues to pay about $550 anyways. 6 months later, they notify him that his minimum payment is now 5% of the balance, which is $900 a month. That's money he just doesn't have, although he didn't borrow any more money, and has never been late or missed a payment.

There is no way he can make the new payment, so Chase offers to help him out. He can keep the 2% monthly payment, but will have to agree to pay the normal interest rate on his card, 19.24%. So he accepted an offer that dropped his interest in half, but has gone from a 5.99% car loan, to a 19.24% loan. I wonder how this can even be legal?

I myself got a Chase Amazon visa this spring. It started with a rate of 8.99%, two months later it was raised to 16.24%, and last week I got a notice that it will be going to 24.6% in November, and also my minimum payment will go to 5%. None of this matters to me, because I pay the balance off every month, but I see how it could get otherwise responsible borrowers in trouble.

I did call to ask why it kept going up, the rep told me that she really didn't know, but it's usually because of a change in your credit score. Total BS, I checked my credit score, it's 824, slightly higher than last year.

shack

madmax wrote:

I buy everything on credit cards but always pay in full at the end of the month. The way I look at it is you don't buy what you can't afford. However, I have been known to occasionally buy a piece of audio equipment that breaks my own rules and I pay it off the next month.

I (and my family) have not paid any interest on a credit card in 25 years...and we use them for nearly everything we purchase and pay the balance in full each month.

madmax wrote:

In my opinion most people are slaves to debt of their own free will.

Anyone who carries a large balance on a credit card is just dumb! :rolleyes:

heiney9

WilliamM2 wrote: »

It's not just irresponsible people getting screwed. This is how Chase is ruining peoples credit.

A friend of mine had a car loan at 5.99% with a balance of about $18,000, payment is around $550. His Chase credit card offers to transfer the balance for 2.99% for the life of the loan. He has to pay a minimum of 2% of the balance a month, $360 a month, he continues to pay about $550 anyways. 6 months later, they notify him that his minimum payment is now 5% of the balance, which is $900 a month. That's money he just doesn't have, although he didn't borrow any more money, and has never been late or missed a payment.

There is no way he can make the new payment, so Chase offers to help him out. He can keep the 2% monthly payment, but will have to agree to pay the normal interest rate on his card, 19.24%. So he accepted an offer that dropped his interest in half, but has gone from a 5.99% car loan, to a 19.24% loan. I wonder how this can even be legal?

I myself got a Chase Amazon visa this spring. It started with a rate of 8.99%, two months later it was raised to 16.24%, and last week I got a notice that it will be going to 24.6% in November, and also my minimum payment will go to 5%. None of this matters to me, because I pay the balance off every month, but I see how it could get otherwise responsible borrowers in trouble.

I did call to ask why it kept going up, the rep told me that she really didn't know, but it's usually because of a change in your credit score. Total BS, I checked my credit score, it's 824, slightly higher than last year.

That's just plain stupid of your friend to put a car on credit card??????? While I don;t agree with what the CC did in any way.......why put a long term high dollar item like that on a CC. Sounds like they kept their promise not to raise the rate.

shack

heiney9 wrote:

That's just plain stupid of your friend to put a car on credit card???????

Agreed.

heiney9 wrote:

While I don;t agree with what the CC did in any way.......

Sounds like they kept their promise not to raise the rate.

I have no problem with increasing the minimum payment as long as they kept the rate the same. The 2% minimum monthly payment of the outstanding balance of a credit is an artificially low figure that only came about in the last decade or so as CC balances increased. It should NEVER have been the standard. 3% should be the absoulute minimum and the 5% amount is a MORE THAN REASONABLE minimum payment on unsecured credit.

heiney9

The only problem I had was their willingness to keep the 2% min payment and then raising the rate to 19%. Again, it was a terribly stupid thing for someone to do.....putting a car on a CC. Anyone with any sense knows that CC companies change rate's, fee's and terms on a pretty regular basis.............and if he had never experienced any of those changes he still should have realized it could happen anytime.

That's just my .02c, not trying to drag the guy through the mud

WilliamM2

heiney9 wrote: »

That's just plain stupid of your friend to put a car on credit card??????? While I don;t agree with what the CC did in any way.......why put a long term high dollar item like that on a CC. Sounds like they kept their promise not to raise the rate.

Stupid to cut his interest rate in half? He did have it in writing that the rate was guaranteed, and continued to pay well over the minimum, this would shorten his loan, not make it longer. I guess he never thought to ask about the minimum payment changing. I probably wouldn't have thought of it either, since mine has never changed on any of my cards in over 25 years, until now.

What I really don't understand is why the CC companies are raising the minimum payment on good standing card holders. The cardholders go from having great credit, never missing a payment, to a payment that they just can't afford. Many end up defaulting on the card altogether. How would that help the bank make more money?

apphd

shack wrote: »

I have no problem with increasing the minimum payment as long as they kept the rate the same. The 2% minimum monthly payment of the outstanding balance of a credit is an artificially low figure that only came about in the last decade or so as CC balances increased. It should NEVER have been the standard. 3% should be the absoulute minimum and the 5% amount is a MORE THAN REASONABLE minimum payment on unsecured credit.

I think that 2% was just part of the shell game tactics they used. IMO they came about when they would issue anyone, even a family pet, a CC. So many (usually younger) people just kept making the min. payment, and often kept using the card. This was good money for the CC companies when times were good because it extended the amount of time people were paying as the interest charges kept piling up. But now they are scrambling trying to increase profit because they lost money in the sub prime market as well (maybe not the CC divisions per say). They did something stupid and lost money, so now $crew over whoever they can to make up the losses.

Don't CC companies make like 15% on charge sales from the merchant? I always thought that was the case, just don't know. If it is why would they want to boot someone for paying off the thing every month. That's what I do and haven't gotten any notice of closing because of it, but would not be surprised if it was to show up. I've already seen the limit dropped, interest rate increase, and min. payment increase, which didn't bother me because it did not affect me. But when they want to boot me for paying it off before finance charges then all I can say is don't let the door hit you in the a$$ on the way out.
Sorry for the rant
carry on

madmax

A lot of times all that is needed to keep a CC company from changing your agreement is to inform them you do not want it to change AND no longer use the card AND keep payments current. Not really sure how they could change the terms legally if the above is done. Many changes of terms sent to me say this but who knows, maybe a law changed or something.
madmax

WilliamM2

apphd wrote: »

Don't CC companies make like 15% on charge sales from the merchant? I always thought that was the case, just don't know. If it is why would they want to boot someone for paying off the thing every month. That's what I do and haven't gotten any notice of closing because of it, but would not be surprised if it was to show up. I've already seen the limit dropped, interest rate increase, and min. payment increase, which didn't bother me because it did not affect me. But when they want to boot me for paying it off before finance charges then all I can say is don't let the door hit you in the a$$ on the way out.
Sorry for the rant
carry on

I believe the rate charged is negotiated with the retailer. My company pays 3% on every charge.

I have never had a card closed for not carrying a balance, although I did have one card claim that due to never carrying a balance, they were going to have to charge me a $20 annual fee. I called and told them to cancel the card. Then they offered to drop the fee, as they didn't want to lose my business. Haven't heard from them since.

shack

apphd wrote:

Don't CC companies make like 15% on charge sales from the merchant? I always thought that was the case, just don't know. If it is why would they want to boot someone for paying off the thing every month.

Merchants will pay a rate of between .33% up to around 4% of the charge transaction amounts. The rates are negotiable and based on volume and dollar amounts. The big retailers are probably paying less than 1% and the low volume users are at the high end.

I once had an "escort service" request a merchant account in order to accept MC/Visa cards for their "clients". They were willing to pay whatever rate we charged as long as we set up the account. I was to be a relatively low volume but high transaction amount arrangement. We declined.

WilliamM2

madmax wrote: »

A lot of times all that is needed to keep a CC company from changing your agreement is to inform them you do not want it to change AND no longer use the card AND keep payments current. Not really sure how they could change the terms legally if the above is done. Many changes of terms sent to me say this but who knows, maybe a law changed or something.
madmax

You are right. When I recieved the notice of the interest hike and minimum payment increase, there was a form that said I could refuse to accept the changes, continue making payments, and no longer use the card. But there is also a clause that says they can request the balance be paid in full at any time if I choose to do so. Reason #10,987 to never carry a balance on your card.

heiney9

madmax wrote: »

A lot of times all that is needed to keep a CC company from changing your agreement is to inform them you do not want it to change AND no longer use the card AND keep payments current. Not really sure how they could change the terms legally if the above is done. Many changes of terms sent to me say this but who knows, maybe a law changed or something.
madmax

There is a clause that I've seen on every CC app.

Terms and conditions are subject to change. And is this environment what you stated above is no longer the norm, it's the exception and it's been that way for about the past 5 years.

I worked at Bank One branch in Illinois and we used to "pump" those CC apps out like no ones business.....we'd get paid $3-5 for every approved app. They would approve your neighbors dog back then...........well they got in a lot of trouble financially about the time Chase took them over and I believe there is a class action lawsuit against the former Bank One for it's lending practices in regards to the CC division at that time.

H9

apphd

WilliamM2 wrote: »

I believe the rate charged is negotiated with the retailer. My company pays 3% on every charge.

I have never had a card closed for not carrying a balance, although I did have one card claim that due to never carrying a balance, they were going to have to charge me a $20 annual fee. I called and told them to cancel the card. Then they offered to drop the fee, as they didn't want to lose my business. Haven't heard from them since.

shack wrote: »

Merchants will pay a rate of between .33% up to around 4% of the charge transaction amounts. The rates are negotiable and based on volume and dollar amounts. The big retailers are probably paying less than 1% and the low volume users are at the high end.

I once had an "escort service" request a merchant account in order to accept MC/Visa cards for their "clients". They were willing to pay whatever rate we charged as long as we set up the account. I was to be a relatively low volume but high transaction amount arrangement. We declined.

Thanks for clearing that up for me, I always hated the fact that prices were probably inflated to make up this 15% along with what we consumers pay to make up the losses of shoplifters:mad: At least now I can feel a little better knowing the prices are only inflated by 1%-3% for this convenience.

Shack, thanks for the extra little story, for some reason I couldn't get the image of a street walker on the corner holding one of the older "impression" type cc machines.:D

vlam

Stupid to cut his interest rate in half? He did have it in writing that the rate was guaranteed, and continued to pay well over the minimum, this would shorten his loan, not make it longer. I guess he never thought to ask about the minimum payment changing. I probably wouldn't have thought of it either, since mine has never changed on any of my cards in over 25 years, until now.

Not stupid but your friend didn't understand the whole idea of BT. BT are teaser rates. Every $ you borrow from the CC company, it's clearly states that they can change the terms any time as long as you are given notice. CC company are in trouble and have been for a while. One of my biggest creditor Advanta Bank when out of business earlier this year and CC company going out of business was rare until the recent years. They are desparate to get money in as there are so many outstanding and overdue loan out there that they won't see for a while. As always, it's the responsible people who end up paying at the end.

Cash is still the king but in this darn age, credit is everything. Whether you use it or not, having it is a plus.

I do get annoyed with closing of accounts with very little notices. The rewards are just gone these days. I lost 8 credit card this year due to closure because they realize that they aren't making any money off of me anymore.

Rodeo0530

I have one credit card and carry no balance on it even though I use it for everything. My card is through a credit union and the interest rate has never changed, but if they decide they're going to do something to get money out of me, I'll just cancel the card and use cash. I just use the card for convenience, but I won't if it's going to cost me.

madmax

Some people like the debit cards but I understand they are very dangerous. When someone illegally uses your CC number you are only responsible for some small amount or nothing at all. When someone uses your debit card the cash is gone, up to the limit of your checking account. And, if you have overdraft linked to your savings it may be gone as well.
madmax

nadams

I chose the safer route... I joined a local credit union. Got a visa from them with a high enough limit to transfer all my balances to the one card. They were running a promo - 5% interest on balance transfers until you pay the transfer off. Regular rate on the card is 10% which is still half my other cards. I've since put revolving balance on, and they always apply payment to the higher interest rate balance first.

I do still have and use a card with Capital one. The only reason I kept it was because it was my first CC, and I wanted to keep the longer credit history open. Only being 23, this is important to your score. However, I found keeping the card open a mistake, because I do use it to charge things I can't afford. Slowly but surely, the balance has crept up. Only in the last 3 months or so have I been able to make headway getting the balance paid down. I realised how stupid it was to pay 20% interest.....

steveinaz

I have my own story to tell about Chase, but I digress. Needless to say, I was screwed when an opt-out letter was mailed to the wrong address---and no, it wasn't the address on my account--completely Chases' error. Do you think that a made a difference? Hell no.

Long story short, don't use credit cards (any of them) if you don't have the means to pay the balance every month. CC's are a screwjob waiting to happen, it's all in the terms of service.

My latest fiasco; AMEX. Been with these folks for 12 years. Never a late payment, never a missed payment, never an over-the-limit problem---a star pupil, IOW. For the last 6 years my minimum payment due was $113 (and less); I have sent them a minimum of $730 monthly, and on a few occasions "thousands of dollars" payments. Think that stopped them from raising my interest rate on my so-called (and agreed to) fixed rate card? Nahhhhh.

I asked AMEX to explain to me exactly, how a customer who consistently sends triple/quadruple the payment necessary is somehow a risk to them. They couldn't answer. Think that made a difference? Nah.

Hey, I'm all for the "free market" approach and all, but what is fair and ethical (key word there being "ethical") should be fair and ethical. What CC companies are doing to many customers is about as unfair and unethical as it gets, free market be damned. They know damn good and well the game they are playing--so don't try to defend that ****. Apparently, the "agreement" has to be followed only by the consumer, not the provider; and even when it is followed to the letter, you still get screwed.

Now, to the "holyer-than-thou" group. Not everyone is either born with a gold spoon up their ****, or have achieved unbelievable goals. Some of us are average **** Joes, and once in a while need to use credit to quite literally get by---either in the distant past (my situation), or currently. Just because I am now very close to being debt free, doesn't mean I'm gonna shake a finger at anyone else, while seated on my high horse. Credit card's need to be regulated. They did it to themselves by turning on GOOD customers, in order to pay bad customer debt. They take the "risk" but we pay the bill?...doesn't seem right huh?

I've paid my bills. I'll never have another credit card---but then again, I have that luxury.

polkatese

madmax wrote: »

Some people like the debit cards but I understand they are very dangerous. When someone illegally uses your CC number you are only responsible for some small amount or nothing at all. When someone uses your debit card the cash is gone, up to the limit of your checking account. And, if you have overdraft linked to your savings it may be gone as well.
madmax

Chuck, just to clarify for my own education here, I thought those Debit cards carrying the MasterCard or Visa logo are also protected by a maximum of $50 exposure/liability (if it is Lost or Stolen and reported in a timely manner, which is usually up to 72 hours or whatever the issuer institutions deemed to be timely)? is it not or has it change recently?

nadams

Steveinaz- Keep in mind the banks are out to get the interest money. You were paying too much... It's the people who pay off their cards every month that are getting their cards closed. If you pay it every month, you don't make them any money!!!

obieone

With the exception of my mortgage, I've been debt free for 3+ years. The last card I had was an AMEX charge card, which I closed out several months back because they invented a bank, just receive TARP funds. I told them F.O. & D.
The only reason I ever used a credit card was to establish credit. Once I had enough to qualify for a car loan, then a mortgage, they HAD served their purpose;)

steveinaz

Nadams,
I'm aware. I don't like giving banks anymore interest than they already get. Neither card closed my account--I DID.

Luckily I was able to screw Chase Bank right back by securing a signature loan for the balance, at a very low interest rate thru my credit union. Chases' "new" increased interest rate never affected me. The balance was paid in full, and those jack holes didn't get an extra penny of my money. That was quite satisfying.