Have Your Credit Card Rates Gone Up?
There has been lots of news articles in major newspapers recently about credit card companies raising rates on cardholders who were supposedly paying their bills on time. Companies that have been cited for such practices included Bank of America, Capital One and Chase.
The theory is that with bank profits being squeezed with write offs from sub prime mortgage loans and are trying to find means to squeeze as much profits from their other operations. It used to be that banks would practice “universal default clause” - raising rates not because you made a late payment, but because you paid late on some other debts you have. Most banks have now stopped this practice, but they still have the right to raise your rates if they wish to.
Well, the press has made it seem like this is becoming a wide spread practice. So I asked my friend from Chase (who works in the credit card department) if there was any truth in these stories. He denied that Chase practiced this at all. In fact, he admitted that they used to do it, but not anymore.
He then asked me not to believe these stories because he says that consumers tend to complain when their rates went up, but they do tend to forget that they were actually “late on one bill”. Hence, he is not convinced of the stories that are appearing in the press.
The one way to get around all the nonsense is to actually pay your credit card bills fully on time. I never carry a balance and so credit card issuers can raise the APR, late fees and all that for all they want and it would not affect me at all.
But that aside, has anyone had their interest rate increased unfairly? Share your stories here (and be truthful about any late payments!).
February 15th, 2008 at 2:00 pm
Capital One and Amex Blue have raised my rates from 9% to 17% and 21% respectively. Ironically, my cash advance APR for Capital One is still at 9%. Bank of America has not touched my rate which has been at 7.9% since I got the card about 18 months ago.
My FICO is 788 and I’ve never made a late payment on either card. Personally, I don’t really care about the APR since I no longer carry balances.
February 17th, 2008 at 11:14 pm
I have been a Capitol One card holder for several years. In fact, at one time I had 3 Capitol One cards. My credit rating is 718. My score is not higher due to high credit balances on a number of cards. I have NEVER made a late payment. The default rates are so rediculous, one has to be diligent about due dates. Capitol One raised my FIXED RATE card I had for several years from 9.9% fixed to 21.9% variable. It doubled my payment. I called and talked with them and they said it was due to my high credit balances for all cards totalled, not just theirs. I cancelled one Capitol One card. I moved the 21.9 variable balance to another non-Cap One card. The last Capitol One card I am ususally able to pay off month to month. This practice is so wrong, expecially when one has been a consumer with Capitol One for 4 or 5 years.
July 10th, 2008 at 5:14 pm
My Discover card rate recently jumped from 13.9 to 20.9%, with a letter stating the reasons as “account open for over 12 months, APR less than 20% and acct not used monthly.” How outrageous is that? I haven’t been late, much less missed a single payment ever, thank you. For ANY card. I thought I was a model customer! They have me because I have too high a balance to transfer.
I have found Bank of America to be the best. That one did go over the limit one month (still, never late or missed) and they raised it for 6 months, and to my great surprise it reverted to the original 9.9% at the end without my having to call. I thought that would be a battle, the way Discover and Citi work.