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I've been reading the threads about how credit card companies are screwing their good customers by upping interest rates and lowering credit lines, but this has really got me steamed. I've received some letters about my interest rates going up even though I've never been late on a payment, always pay more than the minimum; in fact except for a couple cards that I've used to make some home repairs (with special no interest financing) I pay my balances off each month. I wasn't happy, but since none of the cards that had raised the rates have a balance on them, I figured whatever.
Well, I took one of my cards that had a $5,000 credit limit with me on a short vacation. I flew out of Baltimore this morning, planning to put all of my travel expenses on that card and then pay it off when the bill comes in. I've done this a number of times. On this particular card, I was online just yesterday, making sure my last payment I made just last week had posted, that once again brought my balance down to zero. Everything's fine- balance zero - $5,000 limit. And this creditor had not advised me of any rate changes or any other issue with the card. No letter or other correspondence - nothing.
I fly into Jacksonville Florida - over 800 miles from home - go up to the car rental desk to pay for my car - the charge is declined. The agent runs it again - $375 total charge - declined. Luckily, I had another card in my wallet so I used that to pay for my rental, and then called the credit card company.
Their response? They apologize, but due to the current credit situation they reevaluated their customers' credit profiles, and unfortunately my credit limit had been reduced from $5,000 to $300. What the h**l?!? Here I am almost a thousand miles from home, no warning, nothing, and they reduced the credit line to a crummy $300. What is that? Who even needs a credit line of that amount. I was steamed!
As I said, luckily I have other cards, and luckily I had them with me. But this really ticks me off. What a way to start what was supposed to be a few days off to relax a little.
Sorry to hear this happen to you. Thankfully you did have a back up card with you. I've read similar stories from other people and it seems ridiculous that this is happening, but it is. I gather that since you pay your balance off every month, the credit company is not making any money off of you and they are a company who wants to make money so they are going to cut those who can't help them. They obviously don't care about the consumer and never did.
I just received a nice notice from Capital One that reads:
"Due to extraordinary changes in the economic environment, we're reviewing our existing credit card accounts. Having considered these economic conditions, your account's current Purchase rate, and the length of time you've had this rate and account, we will be increasing your Purchase rate. We're also raising your Cash Advance rates."
How nice of them - they did not, at least that I know, reduce my credit limit arbitrarily too.
I called the company to speak to two reps, and then two supervisors, to find out why my account terms had been changed - I have had the credit card for 8 years and also have never been late on a payment - and pay it off in full every month. Their blather detailed how they look at accounts as a whole and did not differentiate on any single account holders, so they were raising rates across the board. They did not seem to see anything amiss with lumping a steady customer in with those that are delinquent; nor did they think it unreasonable that they preferred a POSSIBLE payment of 29%-plus on someone that has a less-than-stellar credit history over a guaranteed 3% - 4% of all my purchases.
I guess they really want that 29% of someone else's business, because there was no negotiation involved. I let them know that no further charges would be made on that card, and I would be canceling it as soon as possible. I got those cool "cricket noises" from the other end of the phone.
I can't wait till some of those wonderful folks that lobbied and "won" for that great credit card protection bill that doesn't go into effect until next summer start to get some of these notices. Let's see... did any of them think that perhaps these types of slick maneuvers were not going to happen in the 12+ months until the regulations take effect? Wow, maybe some of the "savings" that people are getting from the stimulus bill can be used to pay the extra now due on the raised credit card interest rates? Oh, wait, that money was for jobs and to give people some "spending funds"... wow... it's going to end up sitting in the banks with all the rest of the bailout funds to date.
I just received a nice notice from Capital One that reads:
"Due to extraordinary changes in the economic environment, we're reviewing our existing credit card accounts. Having considered these economic conditions, your account's current Purchase rate, and the length of time you've had this rate and account, we will be increasing your Purchase rate. We're also raising your Cash Advance rates."
How nice of them - they did not, at least that I know, reduce my credit limit arbitrarily too.
I called the company to speak to two reps, and then two supervisors, to find out why my account terms had been changed - I have had the credit card for 8 years and also have never been late on a payment - and pay it off in full every month. Their blather detailed how they look at accounts as a whole and did not differentiate on any single account holders, so they were raising rates across the board. They did not seem to see anything amiss with lumping a steady customer in with those that are delinquent; nor did they think it unreasonable that they preferred a POSSIBLE payment of 29%-plus on someone that has a less-than-stellar credit history over a guaranteed 3% - 4% of all my purchases.
I guess they really want that 29% of someone else's business, because there was no negotiation involved. I let them know that no further charges would be made on that card, and I would be canceling it as soon as possible. I got those cool "cricket noises" from the other end of the phone.
I can't wait till some of those wonderful folks that lobbied and "won" for that great credit card protection bill that doesn't go into effect until next summer start to get some of these notices. Let's see... did any of them think that perhaps these types of slick maneuvers were not going to happen in the 12+ months until the regulations take effect? Wow, maybe some of the "savings" that people are getting from the stimulus bill can be used to pay the extra now due on the raised credit card interest rates? Oh, wait, that money was for jobs and to give people some "spending funds"... wow... it's going to end up sitting in the banks with all the rest of the bailout funds to date.
Imagine that.
I got that notice on both my cards. What's weird is that the purchase rate only raised on 1 of them. the other one the purchase rate stayed the same. I just did an online payment to bring my balance down to zero on the one that my puechase rate went up. Once it clears my bank I'll be calling Capital One and canceling that account. Since the limit is only $500 and I'm not going to be making any major purchases for a couple of years it won't matter if it brings my credit score down a few points or not.
Jaindow - you are probably right. Even though I use the card regualrly, I pay my balance off each month, so they aren't making enough money off of me (although they do get a cut of what the merchant charges - guess that's not enough). And I guess they have the right to decide who to extend credit to, and who not to. But they could have at least given me prior notice.
After I complained to the representative for the credit card company, she said I would be getting a letter - but that's after the fact. What a ****-poor way to do business. And I had been a customer for years and had never had a late payment, never went over the limit, and always paid more than the minimum. It has only been over the last year or so that I stopped carrying a balance with them. I worked hard to pay my balances off. I hate being treated like this. And unfortunately, you pretty much have to have a credit card in today's economy - to rent a car, book a hotel, book an airlline ticket. You are at their mercy.
Best thing to do is pay at the end of the month. That way at leasst you don't have tpo pay for those that endup not paying. If I am not wrong they now can not raise your rate on existing debt but only future debt as the the rukles have changed. that of copurse means that the risk can not be spreadout and the credit card customer is alone on risk.You are never at thier mercy if you pay them what you owe on time and in full each month.
Best thing to do is pay at the end of the month. That way at leasst you don't have tpo pay for those that endup not paying. If I am not wrong they now can not raise your rate on existing debt but only future debt as the the rukles have changed. that of copurse means that the risk can not be spreadout and the credit card customer is alone on risk.You are never at thier mercy if you pay them what you owe on time and in full each month.
Well I do that, but I certainly felt at their mercy when they left me high and dry 1,000 miles from home with my credit limit reduced from $5,000 to practically nothing...without any warning.
Discover got me, I was driving down to Texas and had a discover card I paid off a month or two prior I was going to use for expenses and go to use it and it's declined, call them up and they said they closed the account so they won't have to worry about me charging it up, lucky for me I had my debit card and cash in my savings or else I would of had a hell of a time getting back.
If I am not wrong they now can not raise your rate on existing debt but only future debt as the the rukles have changed.
Those rules have not yet gone into effect as far as I know.
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What a coincidence to read your post...
