Latest Rant - Credit Card Rates

[andyzee]

I have a very good credit rating. I have one card a GM Platinum Mastercard that I very rarely use, as a matter of fact, I don't even carry it with me. I have a balance of a little over $1000 on it. The payment date on this card is a little differnt then my other cards, it's either on the 15th or right before the 15th. I always pay on time, however, due to the payment date and things in my life being a littl hetic latey, I was a day or two late with my payment in the past couple of months. Well today I decide to take a look at my statement and see that I am now being charged 30.99%. I imediately called up the company to cancel this card. To me this is highway robbery and I let them know my feelings. They agreed that I have been card holder in good standing for the last 6 years and it was one indescretion. they were nice enough to make me an offer, if I pay on time for 6 months, they would lower my interest rate. I told them what they can do with their card and asked how they could possibly charge such a rate. I asked how this is any differnt then loan sharking. The managers answer was that this would be an inappropriate discussion for her to get into and that she couldn't answer. Bottom line, I can't believe what credit companies are getting away with these days. How can they possibly charge such high rate? Why is this not against the law? How is it differnt than loan sharking?

 

[deadheadskier]

I've heard of similar stories. I recall reading in the news over the past year that the government will be cracking down on the credit card companies and imposing limits on such interest hikes. Pretty shady if you ask me and I'm sure infuriating.

 

[wa-loaf]

That's nuts. I had something similar happen with a Chase Amazon card and I just called them up and they reset it.

<politics>There used to be limits on interest rates, but some folks thought it would be good to deregulate the industry. :smash: Some states do have a cap. I think the MA limit is in the low 20's.

You can always write your congresspeople and tell them to support the Credit Card Bill Bill of Rights. http://maloney.house.gov/index.php?option=content&task=view&id=1569&Itemid=61</politics>

 

[SkiDork]

This is 3 years old but basically still applies. I agree it's a rape of the consumer. Unfortunately there's nothing we can do about it except to always pay off your entire bill and if you really need a loan get if from a bank or something...

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From MSNBC.COM:

NO CARD RELIEF
Why is it that credit card companies can charge such EXTREMELY HIGH fees and interest rates while interest paid on savings -- of any kind -- are so low. Late fees of $39 and 14.99 to 22.99 percent interest is typical. In light of (savings) rates being so low, shouldn't credit card rates follow suit? Talk about exploiting the middle-class!
— Charles J., Canfield, Ohio

The simple answer is: card companies charge high rates because they can.

There are laws against what’s called "usury" at the state level which limit the percentage on loan rates (originally to prevent loan sharking). The credit card companies have had a lot of success getting these laws removed or raising the caps to ridiculously high levels.

And all it takes is one state: the industry also won a key court ruling that says the lending rate limit applies based on the state in which the card company is based -- not where the card holder lives. So the card companies went to states like North Dakota and said: raise your interest rate caps and we'll bring jobs.

The card companies' argument for such high rates is that credit card loans are unsecured -- unlike the loan on your house or car. If you don't pay your mortage, the bank can take your house. With a credit card, there's nothing to repossess. But if card issuers didn't routinely sell credit to people who can't afford to pay it off, they wouldn't need to overcharge every one else to make up those losses.

Now, with high rates crippling some household budgets and forcing families into bankruptcy, the financial services industry has come up with another fix: tighten up the bankruptcy laws. The new law, already passed by the Senate and approved by the House on Thursday, will make it much harder for people hit by job loss or big medical bills to declare bankruptcy and get a fresh start.

 

[tree_skier]

Vermont usary is 20%. That is a cap on any interest rate is 20%, credit cards, loans etc. Now try and find a credit card based out of vermont.

 

[ComeBackMudPuddles]

You can always write your congresspeople and tell them to support the Credit Card Bill Bill of Rights. http://maloney.house.gov/index.php?option=content&task=view&id=1569&Itemid=61</politics>

Thanks for the link!!!!

 

[ComeBackMudPuddles]

Vermont usary is 20%. That is a cap on any interest rate is 20%, credit cards, loans etc. Now try and find a credit card based out of vermont.

How does the cap work? Can Vermonters get out-of-state credit cards that are not subject to the cap?

 

[Beetlenut]

Why is this not against the law? How is it differnt than loan sharking?

Unfortunately because that's the agreement you signed. It's in the fine print that no one reads. And it is Loan Sharking! Its just legal Loan Sharking. Just like the Pharmaceuticals are legal pushers!

 

[wa-loaf]

Unfortunately because that's the agreement you signed. It's in the fine print that no one reads. And it is Loan Sharking! Its just legal Loan Sharking. Just like the Pharmaceuticals are legal pushers!

And part of the agreement is that you give up your rights to sue them and have to go to an arbitrator that they hire. Wanna guess how many folks win in arbitration?

 

[Beetlenut]

And part of the agreement is that you give up your rights to sue them and have to go to an arbitrator that they hire. Wanna guess how many folks win in arbitration?

The real driving force behind these steep interest rates, is all the Bankruptcies that are occurring. Forcing the credit card companies to eat a lot of debt. Which they in turn pass on to you in the form of higher interest rates. It's social capitalism at its finest!

 

[tree_skier]

How does the cap work? Can Vermonters get out-of-state credit cards that are not subject to the cap?

Yes vermonters have a hard time getting a card subject to it as all the card compainy needs to to is set up out of state, ie deleware, to get around it. ie incorporate in de set up a po box with forwarding back to a processing center and viola delaware rules not VT.

 

[andyzee]

The real driving force behind these steep interest rates, is all the Bankruptcies that are occurring. Forcing the credit card companies to eat a lot of debt. Which they in turn pass on to you in the form of higher interest rates. It's social capitalism at its finest!

Beetlenut, I think your avatar fits this thread nicely :lol:

 

[Beetlenut]

Beetlenut, I think your avatar fits this thread nicely :lol:

Ha! Guess we're all chickens!... Effin rabbits!

 

[GrilledSteezeSandwich]

I have a very good credit rating. I have one card a GM Platinum Mastercard that I very rarely use, as a matter of fact, I don't even carry it with me. I have a balance of a little over $1000 on it. The payment date on this card is a little differnt then my other cards, it's either on the 15th or right before the 15th. I always pay on time, however, due to the payment date and things in my life being a littl hetic latey, I was a day or two late with my payment in the past couple of months. Well today I decide to take a look at my statement and see that I am now being charged 30.99%. I imediately called up the company to cancel this card. To me this is highway robbery and I let them know my feelings. They agreed that I have been card holder in good standing for the last 6 years and it was one indescretion. they were nice enough to make me an offer, if I pay on time for 6 months, they would lower my interest rate. I told them what they can do with their card and asked how they could possibly charge such a rate. I asked how this is any differnt then loan sharking. The managers answer was that this would be an inappropriate discussion for her to get into and that she couldn't answer. Bottom line, I can't believe what credit companies are getting away with these days. How can they possibly charge such high rate? Why is this not against the law? How is it differnt than loan sharking?

Pay your bills on time and you will keep a low rate...I think my rate is 11.9 percent because I've never had a late payment. I'm not a very organized guy but when it comes to my bills I'm very organized..and the credit card companies can get away with raising the rates if you don't follow the rules. If you do it right...credit cards are a major convenience and essentially an interest free 30 days loan.

 

[Beetlenut]

Pay your bills on time and you will keep a low rate....

You have a keen sense of the obvious!

 

[Moe Ghoul]

It's a lot harder to get CC debt discharged thru bankruptcy these days, if at all, since Congress let the banking industry rewrite the laws. Meanwhile, they're collectively writing off 100's of billions of dollars in worthless junk and getting bailed out by us, the taxpayer. It's madness.

 

[bvibert]

Let's try to keep this thread politic free please.

 

[wa-loaf]

Pay your bills on time and you will keep a low rate...I think my rate is 11.9 percent because I've never had a late payment. I'm not a very organized guy but when it comes to my bills I'm very organized..and the credit card companies can get away with raising the rates if you don't follow the rules. If you do it right...credit cards are a major convenience and essentially an interest free 30 days loan.

Problem is they keep changing the rules to trip people up. Changing due dates, cutting grace periods, mailing bills late, anything they can do to force penalties and raise rates.

11.9% is kinda high, you need a new card sucka.

 

[ski_resort_observer]

The banking industry is in the toilet right now, as are other business sectors. They are desparate for income so they have come up with many additional hidden fees and charges they can get you with. It's legal cause it's included in the small print on the CC agreement.

It's one thing to charge $39 if your late with your payment but 30% interest , that's harsh. It could be worse, you could have a $10,000 instead of $1,000 balance.

 

[Beetlenut]

The banking industry is in the toilet right now, as are other business sectors. They are desparate for income so they have come up with many additional hidden fees and charges they can get you with. It's legal cause it's included in the small print on the CC agreement.

It's one thing to charge $39 if your late with your payment but 30% interest , that's harsh. It could be worse, you could have a $10,000 instead of $1,000.

Yes, but the banks have been playing their games long before the economy went into the toilet. Since the days of massive deregulation, they have systematically milked the middle-class dry! Hail corporate America!