Consumer Complaints: We're raising your interest rate so you pay your credit card off faster...
Filed under: Consumer Complaints
Many consumers are feeling debt woes as the United States economy is in turmoil. Credit card companies essentially own their customers so long as the customers owe them money. The agreements which the customers accept when they sign up for a credit card give the companies the power to change the terms of the agreement at any time, for any reason at all, or for no reason at all.This should motivate people to avoid credit cards as much as possible. And if you owe money to credit card companies, this should light a fire under you to pay the cards off as soon as possible. Regulators have received thousands of complaints from consumers whose credit limits have been suddenly decreased, credit limits increased, or whose accounts have been closed. The government is preparing to crack down on some of these abuses, but it hasn't happened yet.
One consumer reports to WalletPop the following:
I have 3 credit cards with Bank of America. They just went from 11.99% to 25.99%. I called them, got nowhere with the first person I talked to so I asked to speak with a supervisor.
I was told:
1) Yes, we realize you have NEVER been late with Bank of America on ANY of your cards.
2) Yes, we realize you have no delinquencies or negatives ANYWHERE ON YOUR CREDIT REPORT.
3) Yes, we realize you always pay more than your minimum not only on Bank of America but on all of your cards.
Their rationale was this:
You weren't making substantial progress paying these cards off in our eyes so we increased your interest rate to encourage you to pay them off (their exact words.) When I asked how increasing my interest rate was going to help me pay them off, he stated that doing so would encourage me to seek financing elsewhere to pay them off.
He stated that "everyone knows" credit cards are "short term loans" and that they are intended to be paid off quickly. Nevermind a minimum payment requirement, he states that is only to help you keep from incurring a fee if you can't make a (huge) payment in a given month.
After our conversation, I felt that what he said to me was, essentially, "We're going to put the screws to you just because we can. We know it will be very difficult for you to pay this card off now because of the added interest and that's out goal."
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.I was told:
1) Yes, we realize you have NEVER been late with Bank of America on ANY of your cards.
2) Yes, we realize you have no delinquencies or negatives ANYWHERE ON YOUR CREDIT REPORT.
3) Yes, we realize you always pay more than your minimum not only on Bank of America but on all of your cards.
Their rationale was this:
You weren't making substantial progress paying these cards off in our eyes so we increased your interest rate to encourage you to pay them off (their exact words.) When I asked how increasing my interest rate was going to help me pay them off, he stated that doing so would encourage me to seek financing elsewhere to pay them off.
He stated that "everyone knows" credit cards are "short term loans" and that they are intended to be paid off quickly. Nevermind a minimum payment requirement, he states that is only to help you keep from incurring a fee if you can't make a (huge) payment in a given month.
After our conversation, I felt that what he said to me was, essentially, "We're going to put the screws to you just because we can. We know it will be very difficult for you to pay this card off now because of the added interest and that's out goal."
Reader Comments (Page 1 of 1)
12-24-2008 @ 9:18PM
Itsmycall said...
Bank of America Bailout Mystery?
Check out FL Times Union editorial cartoon (12/24/08)
Well, I just got the results of the use of my part of the infamous bank bailout money. Thank you congress. I received a gracious letter from the Bank of America informing me that they will be more than doubling my finance charges beginning in February 2009 from 12.99% to 27.99% for my BUSINESS VISA card. I have been in business since February 1992 and a Bank of America VISA card holder since November 1993 with a high credit limit of $25,000 which I am nowhere near. They were, of course, very happy to give me an low rate for transfer balance’s just a few month’s ago. I have paid what has been required and I have had no differences in purchasing, and given no real reason by Bob (BofA rep). Of, course Bob could not do anything and does not make these decisions. If I got this notice I am sure many more will. I have never made it a habit of not paying my bills, but this is ridiculous. I am going to protest these greedy b*****’s with the only thing they understand. Maybe a few million would like to join me and get YOUR money back.
MERRY CHRISTMAS ALL!!
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1-15-2009 @ 7:01PM
Cornell said...
I pay all my credit card statements in full every month as soon as the statement is posted on line and at least two weeks before payment is due....so I get free 30 day loans and -crew the credit card companies.
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2-05-2009 @ 10:59AM
too tired to start over said...
Greed has taken over the marketplace in the last 8 to 10 years. This can be particularly seen in the credit card industry, where formerly states capped the interest rate to 18 percent (then considered ridiculous!) with then non-existant late fees, to present-day anything under 30 percent with $39.00 late fees, $29.00 over the limit fees, and who knows what else fees. The calculated rate with these fees is incredulous! We need to re-implement this 18 percent cap, and DISCONTINUE ALL LATE FEES-I wonder how many mortgages have been given up with the late and other fees, just making us all feel hopeless-remember these are the banks getting monies from us! (banks are the holders of the credit cards, the mortgages on your house, and the loans on your businesses)
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