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stasisLAX
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Credit Card Rate Jacking Becoming Loan Sharking

Sun Dec 21, 2008 12:38 am

In an article from CNN.com. one man with an excellent credit rating saw his credit card rate skyrocket from 9.5% to 16.99%. It seems that Citigroup, recipient of federal government bailout funds, seems to be the biggest target of most bloggers' complaints. The U.S. House passes "bill of rights" for customers, but legislation stalls in Senate due to intense lobbying from the credit card industry. In its defense, Citigroup says any cardholders unhappy with rate increases can opt out and close account when card expires.

Source: http://www.cnn.com/2008/US/12/17/cre....rates/index.html?iref=mpstoryview

Can someone remind me why we bailed out Citigroup with taxpayer's monies?  irked 
 
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kc135topboom
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Sun Dec 21, 2008 1:02 am

Well, it was the US Congress that allowed the credit card companies and banks to raise their rates to loan shark rates in the mid 1980s. BTW, at the same time Congress disallowed deducting credit card interest at the same time.

As long as Citigroup, Bank of America, Wells Fargo, etc. pour money into Congress's re-election coffers, Congress will not listen to us.

Did you know that Congress also gave themselves a $4700 pay raise this week. They didn't have to do anything for it, as years ago, they passed a law saying Congress does not get a pay raise only if they vote to cancel the pay raise. In other words, their pay raises are automatic.

So, not only are the big banks screwing us, Congress is too.
 
DfwRevolution
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Sun Dec 21, 2008 2:53 am



Quoting StasisLAX (Thread starter):
In an article from CNN.com. one man with an excellent credit rating saw his credit card rate skyrocket from 9.5% to 16.99%.

If you keep a balance on your credit card, how can you have an excellent credit rating? That's basically rule #1 on how to destroy your credit rating.

Quoting KC135TopBoom (Reply 1):
Well, it was the US Congress that allowed the credit card companies and banks to raise their rates to loan shark rates in the mid 1980s.

And yet, people keep signing new credit card contracts despite the fact that those contracts specifically give the credit card companies the right to change interest rates. If you can't be responsible with credit, use a freaking debit card.

Quoting KC135TopBoom (Reply 1):
So, not only are the big banks screwing us, Congress is too.



Quoting StasisLAX (Thread starter):
Can someone remind me why we bailed out Citigroup with taxpayer's monies? irked

And consumers are screwing themselves. They are buying things they can't afford. They are signing mortgages they can't afford. Consumers deserve equal blame as the ones issuing loose credit.
 
PPVRA
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Sun Dec 21, 2008 3:24 am



Quoting StasisLAX (Thread starter):
Credit Card Rate Jacking Becoming Loan Sharking

Usury is the word you are looking for, not loan sharking.

Still, it's in the contract. If you can't handle it don't expose yourself to it.
 
andz
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Sun Dec 21, 2008 4:17 am



Quoting StasisLAX (Thread starter):
16.99%.

How wonderful. Here it varies between 24% and 28%.
 
Dougloid
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Sun Dec 21, 2008 5:31 am

This is by no means a new phenomenon. Five years ago I was carrying a fair amount of credit card debt although I was never late or missed a payment. I applied for a card thinking I would do a balance transfer and I got turned down.

Well. That gets you a free credit report. So in looking it over I saw that Fleet Bank, one of my credit cards was accessing my credit report at least once every two months, even though I was current with them. What they wanted, you see, is news that I'd stumbled so that they could hammer me with the default rate of about 30 per cent.

That got me damned mad. I had enough in the bank to pay them off so I did with a letter to the president of the bank saying I don't do business with people who don't trust me to pay my bills. That was one time having a law degree was fun, and the letter should have been printed on asbestos.

Of course, I should thank them in a way, because it was like a cold shower, and made both of us realize that we HAD to get out from under the cards-which took us five years and we are now debt free besides the mortgage and my student loans.

I also represented people against credit card companies for five or six years until I couldn't take it any more. The drama was wearing me out.

Interestingly enough, if the debt got sold off to a secondary collector there was a much better chance of making it go away, because the secondary recovery operations rarely have the paper trail that the FDCPA requires. You can bust their balls over it, but you've got to demand verification within 30 days of their first effort to collect. Most people let that slip by.

You can always trust the collection bar to be arrogant and careless, though.
 
QXatFAT
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Sun Dec 21, 2008 7:35 am

Actually the man should have recieved a letter by mail informing him of his credit increase. I have my credit with Citi Card as well and recieved a letter telling me that my credit APR was to increase from 8.49% up to 23%. I had until mid January to opt out of the credit increase in which I had until my credit cards ex. date to have the card paid in full, other wise credit increase would take place. So the iteam might have increased due to his putting off. I opted out of mine last week and we will see in 2 months if it held or not.
 
StarAC17
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Sun Dec 21, 2008 6:17 pm



Quoting DfwRevolution (Reply 2):

If you keep a balance on your credit card, how can you have an excellent credit rating? That's basically rule #1 on how to destroy your credit rating.

I though your credit remained good if you basically paid the minimum payment on time each month and didn't max the cards out. Is this smart, heck no but I though it kept your credit in reasonably good shape.

However if you don't accumulate a balance on a Credit card then you should not care what the interest rate it becasue you will never pay any regardless and your credit card company hates you becasue of this.
 
Dougloid
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Sun Dec 21, 2008 7:29 pm



Quoting StarAC17 (Reply 7):
I though your credit remained good if you basically paid the minimum payment on time each month and didn't max the cards out. Is this smart, heck no but I though it kept your credit in reasonably good shape

This site gives a pretty good explanation of how credit scoring works. It may not be exactly the same system used in Canada but no doubt it is similar.

http://www.creditrepairsite.com/FICOscores.html
 
WellHung
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Mon Dec 22, 2008 12:07 am



Quoting DfwRevolution (Reply 2):
If you keep a balance on your credit card, how can you have an excellent credit rating? That's basically rule #1 on how to destroy your credit rating.

WTF? Educate yourself. Nothing could be further from the truth.

Rule #1 on destroying your credit rating is late payments (over 30 days).

As long as you pay on time and your total utilization is reasonable (balance < 25% of total credit limit or so) your score won't be affected too much. But if you pay off your balances monthly and for some reason miss a payment and it's over 30 days late, your score will plummet.
 
Pyrex
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Mon Dec 22, 2008 1:32 am



Quoting KC135TopBoom (Reply 1):
BTW, at the same time Congress disallowed deducting credit card interest at the same time.

And that is wrong how? BTW, that rule only benefits the credit card companies you are so railing against.
 
jcs17
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Mon Dec 22, 2008 5:14 am

I had to pay for a semester of college with a UA MileagePlus Chase credit card with 24% interest rate. I have about $10k in credit card debt (at least I got the miles  Wink ) for that reason, and a credit rating that would probably rival a mentally retarded persons IQ. I knew what I was getting into as soon as that credit card was swiped. I don't feel bad for people whose interest rate is getting jacked around. I am responsible for carrying a balance and the financial penalties it incurs. It sucks, but carrying a balance is a giant no-no in the credit world. Even as someone with a lot of debt, I feel very little for people with a lot of credit card debt.
 
Dougloid
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Mon Dec 22, 2008 5:43 am



Quoting JCS17 (Reply 11):
I am responsible for carrying a balance and the financial penalties it incurs. It sucks, but carrying a balance is a giant no-no in the credit world. Even as someone with a lot of debt, I feel very little for people with a lot of credit card debt

the best thing to do is wait until you get a decent offer or a promotional teaser and use balance transfers to ratchet that rate down. If you owe 10 large your interest on it if you're making minimums is close to $2,000. Even if you ratchet it down to 12 or 14 you can still save a lot of money.

In our case the balance transfer was at 4 per cent but if you put anything on the card it was 14 per cent. We never charged a thing on that card.

We used balance transfers and it felt pretty good playing one credit card company off against another fighting like dogs over my carcass...at one point it was saving us $75 a month and we rolled that all over into paying off the principal.
 
StarAC17
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Mon Dec 22, 2008 3:09 pm



Quoting Dougloid (Reply 8):
This site gives a pretty good explanation of how credit scoring works. It may not be exactly the same system used in Canada but no doubt it is similar.

Pretty much the same except that having a 10 credit cards is not a benefit to you as much as in the States. What is the point of having a credit card if you are never going to use it is more of the logic here.
 
Dougloid
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Mon Dec 22, 2008 3:46 pm



Quoting StarAC17 (Reply 13):
Pretty much the same except that having a 10 credit cards is not a benefit to you as much as in the States. What is the point of having a credit card if you are never going to use it is more of the logic here.

It wasn't much of a benefit to me I can tell you LOL. some folks say that having a card and not using it does something to the debt/credit ratio that's good for the credit score-that's the theory, at any rate. I do not believe it myself.

Personally, I'd rather not have them and take the hit, whatever that happens to be. I currently have two cards. One gets paid every month and it usually comes out to be $30 a month for whatever goes on it, usually subway
The other does not get used.
 
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LAXintl
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Mon Dec 22, 2008 5:52 pm



Quoting StasisLAX (Thread starter):
Can someone remind me why we bailed out Citigroup with taxpayer's monies?

Any maybe you need to be reminded the use of credit-cards is a privilege, not a right.

No one if forcing anyone to get a card, let alone spend or carry a balance on it.

You want to play, you must pay.
 
AM744
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Mon Dec 22, 2008 7:00 pm



Quoting Andz (Reply 4):
How wonderful. Here it varies between 24% and 28%.

Here it's 36-50% approximately. Banks claim that it's because of the oh-so-high risk they take when lending money. What they don't say is that they give away credit cards to anything that moves, thus closing a vicious circle from which they actually profit, much to the indifference a half baked regulatory authority.
 
Dougloid
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Mon Dec 22, 2008 8:50 pm



Quoting LAXintl (Reply 15):
Any maybe you need to be reminded the use of credit-cards is a privilege, not a right.

No one if forcing anyone to get a card, let alone spend or carry a balance on it.

I agree with that.

Quoting LAXintl (Reply 15):
You want to play, you must pay.

True, but having a business relationship with a creditor does not amount to agreeing to be raped.
 
Flighty
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Mon Dec 22, 2008 10:04 pm



Quoting Dougloid (Reply 17):
True, but having a business relationship with a creditor does not amount to agreeing to be raped.

Either you protect yourself or you don't. If the legal language says they can rape you, then that is that. It's their money. Best option is not to get into the situation. Yes it requires skill. Yes they are preying on the financially illiterate. But they would not break the law. If we don't like the laws on this, maybe we should change them.
 
wn700driver
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Tue Dec 23, 2008 1:52 am



Quote:
and the letter should have been printed on asbestos.

Best. Line. Ever.

Quote:
Any maybe you need to be reminded the use of credit-cards is a privilege, not a right.

No one if forcing anyone to get a card, let alone spend or carry a balance on it.

You want to play, you must pay.

Wholeheartedly agree. Here's the problem. I didn't play. But I still get to pay. These are public funds being used to subsidize (socialize) the losses.

No doubt there would have been some pain (who knows, it might have even trickled down to my airline job too...), but it would have been better on the longer term to just let some of these guys implode.

And same goes for GM, while I'm at it. We didn't want to buy the crappy cars, but now we're paying for them anyway.
 
blrsea
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Tue Dec 23, 2008 3:12 am

I pay off my balance in full every month and still had my rate increased!!
 
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WarRI1
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Tue Dec 23, 2008 3:31 am



Quoting Blrsea (Reply 20):
pay off my balance in full every month and still had my rate increased!!

It is probably because they are not making any money on your account. You maybe doing right for you, but not them.
 
StarAC17
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Wed Dec 24, 2008 1:03 am



Quoting AM744 (Reply 16):
What they don't say is that they give away credit cards to anything that moves, thus closing a vicious circle from which they actually profit, much to the indifference a half baked regulatory authority.

Well most people see that bold minimum payment on their monthly statement and will automatically pay that amount thinking that is what they owe. Notice that the actual balance is in a much smaller font and has to be looked for to a higher degree.

Quoting Blrsea (Reply 20):
I pay off my balance in full every month and still had my rate increased!!

That does suck, but you shouldn't care one bit because you never accumulate any debt and therefore pay no interest on anything you charge. The day credit card companies start charging interest to people that never accumulate a balance then I will be pissed. In fact the main reason I use mine is Aeroplan miles, online purchases and hotel reservations.
 
fridgmus
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Wed Dec 24, 2008 8:36 am

Just got a letter from those thieves at Citi Bank, after 10 years of loyal, default-free membership, they just body-slammed me with an APR increase to 19.99% up from 12%.

Thanks Citi Bank, at least you could have kissed me first!
 
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Francoflier
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Wed Dec 24, 2008 8:52 am

I'm getting 33% from next year... I don't use credit and never pay interest so I don't care.

Although it is true that in recent years, bank themselves are the ones who promoted credit to particulars in order to make easy money. As someone said, they were giving those cards to anyone with a pulse, and told them to spend their heads off, knowing that they could always pay later. Except they couldn't.
And now that it all blew in their faces, they're asking even their moderate, considerate and faithful credit users to pick up the tab... Not fair.
Especially when you consider that when you, in turn, lend the bank some money, they only give you 0.05% interest.
 eyebrow 

I should just cash all my accounts and keep the money under my mattress... I would get the same interest rate but wouldn't have to walk that far to the ATM.
 Big grin
 
StarAC17
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Wed Dec 24, 2008 9:28 pm



Quoting Francoflier (Reply 24):
Especially when you consider that when you, in turn, lend the bank some money, they only give you 0.05% interest.
eyebrow

Federal interest rates are actually 0% in the US if I'm not mistaken, I realize the banks charge more than that for obvious reasons but even for an actual savings account you should be getting 2-3% interest, in a checking account 0.05% is about right.

Credit cards are in a different group all together and can charge you whatever they want and most likely when you applied to the card it said in fine print "Rate subject to change."

Also this is basic capitalism, the banks are losing a lot of money and need to find a new way to make it back somewhere so they are going to try and nickel and dime you anywhere they can to get more $$$.
 
lincoln
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Thu Dec 25, 2008 3:20 am



Quoting DfwRevolution (Reply 2):
If you keep a balance on your credit card, how can you have an excellent credit rating? That's basically rule #1 on how to destroy your credit rating.

I was going to say...

Quoting StarAC17 (Reply 7):
However if you don't accumulate a balance on a Credit card then you should not care what the interest rate it becasue you will never pay any regardless and your credit card company hates you becasue of this.

I have one personal credit card in my name (I also have a Corporate Amex and Visa--those two the only thing I know is that when they come out of my wallet they work, and that's all I care about  Wink ) , and the way I work things I usually have a credit balance (i.e. the bank owes me money) even though I run about $1,500-$2,000 a month through the card.

I couldn't even begin to guess what the interest rate on the card was. In my mind with the exception of big ticket asset purchases where the life of the asset outlives the life of the loan (e.g. a house) it's a horrible idea to spend money I don't have so I try not to do it  Smile

My only debt is my mortgage and signing that paper scared the crap out of me...sometimes it still scares the crap out of me.
 
DfwRevolution
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Thu Dec 25, 2008 5:09 am



Quoting Francoflier (Reply 24):
Especially when you consider that when you, in turn, lend the bank some money, they only give you 0.05% interest.

That's why it is very handy to keep as much of your money as possible in high interest savings accounts. Online banking has made this very simple.

Quoting Lincoln (Reply 26):
In my mind with the exception of big ticket asset purchases where the life of the asset outlives the life of the loan (e.g. a house) it's a horrible idea to spend money I don't have so I try not to do it

 checkmark  The main purpose of personal credit is to build wealth. Very little of the stuff that ends up on a credit card balance is going to appreciate.
 
wn700driver
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Thu Dec 25, 2008 7:20 am



Quote:
Also this is basic capitalism, the banks are losing a lot of money and need to find a new way to make it back somewhere so they are going to try and nickel and dime you anywhere they can to get more $$$.

And while that is understandable, there is a problem with this. It begs for another such episode of insolvency in the near to mid term future. Robbing Paul to pay Peter almost never works as a long term solution.

Anyway, one more reason to say [email protected]#$ credit. I keep a decent rating for one reason. Employment. I wouldn't have gotten the job I just did without a satisfactory credit background. Lord knows why, as I will not be handling valuables, but hey, there it is.

Even for housing, I plan on buying a townhouse outright this spring. I may be over thirty (by then,  Wink ) but I'll own that outright a hell of a lot faster than I would have had I mortgaged it like all my "normal" friends.
 
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stasisLAX
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Thu Dec 25, 2008 7:34 am

Quoting Fridgmus (Reply 23):
Just got a letter from those thieves at Citi Bank, after 10 years of loyal, default-free membership, they just body-slammed me with an APR increase to 19.99% up from 12%. Thanks Citi Bank, at least you could have kissed me first!

That situation is EXACTLY the reason I opened this thread. Citi and other credit card banks are raising their card rates for perfectly fine cardholders for absolutely no reason. To say that such practices constitutes complete assault and robbery of consumers is an understatement.

Again, I ask why did the American taxpayers bail-out the banking industry and why has the U.S. Senate stalled the credit cardholder's "bill of rights" after the U.S. House of Representatives passed the measure? Corruption of our esteemed Senators and underhanded lobbying by the greedy banking industry.   

[Edited 2008-12-24 23:35:44]
 
Maverick623
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Thu Dec 25, 2008 7:42 am



Quoting LAXintl (Reply 15):
No one if forcing anyone to get a card, let alone spend or carry a balance on it.

Try renting a car, getting a mortgage on a house, or getting an auto loan without having/ever had a credit card.
 
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Francoflier
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Thu Dec 25, 2008 11:42 am



Quoting StasisLAX (Reply 29):
for absolutely no reason.

Well, there is a reason...:

The banks' ridiculolus lack of foresight and any notion of sustainable growth that led to a major worldwide economic crisis. And now that they messed up, they're holding us for ransom by threatening to close down and fire all of their employees...

Gotta love it.  bigthumbsup 
 
ADXMatt
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Thu Dec 25, 2008 3:05 pm

I had a similar story with WaMu (now JP Morgan)
My credit score was higher at the time then when the account was opened. No payments were missed on this card or any other card. Their reason for going from 11.99 to 23.99 was that my balance was kept too high. I have not gone over my limit on this or any other card by the way. My total credit card debt is about the same or lower then when the account was opened even though my income has gone up since then.

I took advantage of the opt out and closed the account. This actually lowered my credit score as I have less available credit and as I pay off this debt my balance to credit line is now very high as they show a zero available credit since the account is "closed"

I wish that I could live without credit cards or debt. That's alot easier said then done for alot of us.
 
DfwRevolution
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Thu Dec 25, 2008 7:47 pm



Quoting Maverick623 (Reply 30):
Try renting a car, getting a mortgage on a house, or getting an auto loan without having/ever had a credit card.

It is possible to do all of those things without ever having held a credit card. Debit cards have been acceptable in the place of credit cards for things like rental cars and hotels for at least a decade. You can build a solid credit history by paying utility bills and rent payments on time as well.

It's a misconception to think credit cards are a necessity.
 
Type-Rated
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Thu Dec 25, 2008 8:02 pm

It used to be that if you paid at least the minimum balance on time every month you'd be ok.
Credit card companies then started evaluating risk. This includes how you pay them, how you pay others, and believe it or not now the performance of the stock market!
I had been with Chase for many years on a Mastercard account. I always paid on time, usually paying the balance off every month. When I retired, Chase raised my interest rate to 28%! I called to ask about this and all they could tell me was "it's all about risk" and wouldn't elaborate. So I went down to my local Chase branch and asked them to explain more. Of course they were very evasive. But what it boiled down to was now that I am retired I am more likely to not pay my bills on time! So the risk went up and they need to collect on this additional risk. I told the guy I'll show you how much risk this is, I wrote a check out for the full balance, told them to close that account, then told him I wanted to move my IRA ( $110,000) and my $143,000 investment account out of Chase immediately. He just very nonchalantly said OK and that was that.
The morale of this story? Chase and other banks like them just don't care! All they want to do is press every last cent out of you that they can.
 
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LAXintl
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Thu Dec 25, 2008 10:02 pm



Quoting DfwRevolution (Reply 27):
The main purpose of personal credit is to build wealth. Very little of the stuff that ends up on a credit card balance is going to appreciate.

Personal credit is a convenience more then anything for me.

I don't walk around with $10,000 in my pockets, and things like credit cards provide an easy transactional method that I simply pay off when the bills arrive. I don't need credit to build wealth, I do so thru work and investing smartly.

Quoting StasisLAX (Reply 29):
Citi and other credit card banks are raising their card rates for perfectly fine cardholders for absolutely no reason.

Interestingly, mine dropped - from 12.99 to 11.99%

Quoting Maverick623 (Reply 30):
Try renting a car, getting a mortgage on a house, or getting an auto loan without having/ever had a credit card.

Again no one is forcing you to rent a car, get a mortgage or auto loan.

If you don't want to play they credit game, use cash. Personally I feel this to be a total waste of cash which could be earning you money instead, but direct purchases or cash securitization is certainly possible if ones wishes to avoid credit or have none.

Quoting Type-Rated (Reply 34):
He just very nonchalantly said OK and that was that.

What did you expect him to do? Drop on his knee's and beg you to stay?

Quoting Type-Rated (Reply 34):
Credit card companies then started evaluating risk.

Good for them. They probably should have been more diligent in the past evaluating such risks.
 
ADXMatt
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RE: Credit Card Rate Jacking Becoming Loan Sharking

Sun Dec 28, 2008 1:23 pm



Quoting LAXintl (Reply 35):
Quoting Type-Rated (Reply 34):
He just very nonchalantly said OK and that was that.

What did you expect him to do? Drop on his knee's and beg you to stay?

The branch manager could have at least made an effort to get the other department to re-evaluate based on the history of the customer and the amount of money on deposit.

There is more to an individuals credit worthiness then his/her FICO score.
 
MD11Engineer
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RE: Credit Card Rate Jacking Becoming Loan Sharkin

Sun Dec 28, 2008 3:34 pm



Quoting StasisLAX (Thread starter):
In an article from CNN.com. one man with an excellent credit rating saw his credit card rate skyrocket from 9.5% to 16.99%.



Quoting Fridgmus (Reply 23):
Just got a letter from those thieves at Citi Bank, after 10 years of loyal, default-free membership, they just body-slammed me with an APR increase to 19.99% up from 12%.

Thanks Citi Bank, at least you could have kissed me first!

About one year moreand I'll be finished with those bloodsuckers!

Quoting LAXintl (Reply 35):
If you don't want to play they credit game, use cash. Personally I feel this to be a total waste of cash which could be earning you money instead, but direct purchases or cash securitization is certainly possible if ones wishes to avoid credit or have none.

Try renting a car in Ireland or the UK without a credit card. 10 years ago, you could still bring a cash deposit, but today they refuse to handle cash.
Or try to book a flight e.g. with FR without a credit card. They only accept one debit card from a British bank, which is not available to anybody outside of the UK.

Jan
 
WellHung
Posts: 3299
Joined: Mon Feb 23, 2004 8:50 pm

RE: Credit Card Rate Jacking Becoming Loan Sharking

Sun Dec 28, 2008 4:04 pm

Folks who don't know much about credit, do yourself a favor and ignore everything DfwRevolution says regarding the matter.

Quoting DfwRevolution (Reply 33):
Debit cards have been acceptable in the place of credit cards for things like rental cars and hotels for at least a decade.

I'm not sure about hotels, but not all rental car agencies accept debit cards. And even if they do, you are foolish to use them since they will place a hold on your cash instead of just a hold on a credit card.

Quoting DfwRevolution (Reply 33):
You can build a solid credit history by paying utility bills and rent payments on time as well.

Only if you pay utilities and rent with credit cards or other instruments that appear on your credit report and affect your score.

The only way utilities and rent affect your score and history is through credit inquiries at the time of application or if you are delinquent and they send the account to collections. And those both bring the score DOWN temporarily. You cannot build any type of credit history by paying your electric, cell phone or cable bills on time. However, if you do not have a credit history from credit cards, mortgages, loans, etc., you can be denied those services or be required to put down a hefty deposit.



[Edited 2008-12-28 08:07:42]
 
flexo
Posts: 345
Joined: Thu Mar 29, 2007 6:55 pm

RE: Credit Card Rate Jacking Becoming Loan Sharking

Sun Dec 28, 2008 4:51 pm



Quoting StasisLAX (Thread starter):
Can someone remind me why we bailed out Citigroup with taxpayer's monies?

Well, because if they hadn't there wouldn't be much of anything available. Citi would have dragged all the banks with it and along with them all credit.

Anyway, IMO the access to credit and credit cards needs to be regulated in the future. Too many people who don't know jack about finances are getting screwed over and sign contracts they can't afford, which basically led to crisis we're now facing. If the banks can't get their act together and evaluate risk like they should, they need to be regulated.
(and I work at a bank, just for the record)
 
lincoln
Posts: 3133
Joined: Mon Nov 01, 2004 11:22 pm

RE: Credit Card Rate Jacking Becoming Loan Sharking

Mon Dec 29, 2008 4:04 am



Quoting WellHung (Reply 38):
The only way utilities and rent affect your score and history is through credit inquiries at the time of application or if you are delinquent and they send the account to collections. And those both bring the score DOWN temporarily. You cannot build any type of credit history by paying your electric, cell phone or cable bills on time.

You know, I could have sworn that I had seen utility accounts reported, but out of curiosity I pullted my Experian report this afternoon (it had been a bit over a year since I last checked it anyway) in that regard you are correct.

However, the inquiries when I established the accounts were listed under a heading like "Inquiries not included in your credit score" so I'm not sure you're correct that the application for services would drive down the score... I'm reasonably sure that if you don't pay, on the other hand, that WOULD drive the score down, but I really have no desire to find out.  Smile

Quoting WellHung (Reply 38):
However, if you do not have a credit history from credit cards, mortgages, loans, etc., you can be denied those services or be required to put down a hefty deposit.

"Can" is the operative word there... I had no credit history when I got my first credit card, and an extremely limited history (as in "one credit card, low limit, always paid on time")when it came to my first apartment [I know they pulled the report], and establishing power, telephone, or cable accounts, and I got all of those without any problems... except for the credit card: I had to "remind" my bank that I had $30,000 in a savings account with them and I wouldn't have a problem taking my business and that balance elsewhere if they couldn't manage to issue a credit card...I got a card in the mail 2 days later.
 
WellHung
Posts: 3299
Joined: Mon Feb 23, 2004 8:50 pm

RE: Credit Card Rate Jacking Becoming Loan Sharking

Mon Dec 29, 2008 10:54 pm



Quoting Lincoln (Reply 40):
the inquiries when I established the accounts were listed under a heading like "Inquiries not included in your credit score"

Cell phone providers like AT&T and Verizon absolutely pull a hard inquiry (one that will affect your score). For other utilities, it depends on the provider.

Quoting Lincoln (Reply 40):
I'm reasonably sure that if you don't pay, on the other hand, that WOULD drive the score down

Only if the delinquent account is reported to the credit bureaus as a collection.

Quoting Lincoln (Reply 40):
"Can" is the operative word there

Yes, but in times of tightening credit, skyrocketing delinquency rates on pretty much everything and a future without the freely available credit of the last 10 years, I wouldn't take any chances. "Can" can quickly and easily turn into "will".
 
bahadir
Posts: 1351
Joined: Wed Oct 03, 2001 4:57 pm

RE: Credit Card Rate Jacking Becoming Loan Sharking

Tue Dec 30, 2008 4:46 pm

FICO is another joke that people invented to grab you by the [email protected] I have been paying my bills on time since 2002 (two years of out of work and living off of unemployment) yet my credit score has never made over 630. I have had great income in some portion of the time, yet never made it beyond 630.. Now that my income went down i am still able to pay the bills on time but my score is 550.
As far as renting a car, try to do it with a check card but then you get a freaking 'we will hit you with a credit check' BS.

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