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(This legal?) Have credit card companies turned into loan sharks?

Nitemare

Nitemare

Lifer
My wife and I both have credit cards with Capital One. She has a much lower rate than me so she carries a much higher balance. She also has one with Providian.

We received a letter a month or do ago in which Providian was raising their rate by about 12% roughly double and gave us an option to close the sccount or assume the 25ish interest rate.

Last week we both received letters from Capital One in which they were doing the same thing. Hers will be going up 3 times her current rate and mine about double.

I thought fair lending acts prohibited this kind of things in a legal business institution.
 
credit cards are truly evil! The only reason I have one is to reserve hotels and make the occasional online transaction. I made it my life's mission to pay the bastard things off and never carry a balance on them again.

If I were you I would call them and complain and you may get to keep the lower rate. Otherwise find an introductory offer for something like 0% for six months, then transfer the balance. Repeat as often as needed. It helps you pay down any balances a lot quicker.
 
Thank god I have a CC thru my credit union. They don't pull BS like that.

I know they can raise the rates on you, but they usually have to be justified. Like you not paying a bill for a month or two.
 
Nitemare, were you late on any payments or have you gone over your limit?

The only time I've ever heard of this happening is when you are late on a payment, or you go over your limit and they default to the default rate. The default rate is explained on all CC agreements.
 
They can change the terms as long as you are notified. You probably have the option to close your account and continue to pay off the balance at the old rate.

What the CC companies are doing is giving out low rates to people until they have high balances. Then they review your credit history for any hint that you might have trouble moving your balance to a different card, then smack you with a notice that your rate is going up. They hope you can't get another card and have no choice but to pay them the higher rate.

Nearly every card that says "low fixed rate" has some fine print which allows them to raise your rate at their option by notifying you. That makes the whole concept of "fixed rate" ridiculous.
 
Originally posted by: Amused
Nitemare, were you late on any payments or have you gone over your limit?

The only time I've ever heard of this happening is when you are late on a payment, or you go over your limit and they default to the default rate. The default rate is explained on all CC agreements.
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Never late and close to a grand under the limit
 
i would get a credit rating that you can view right away. Sounds like something happened to your credit ratings.
 
Originally posted by: kranky
They can change the terms as long as you are notified. You probably have the option to close your account and continue to pay off the balance at the old rate.

What the CC companies are doing is giving out low rates to people until they have high balances. Then they review your credit history for any hint that you might have trouble moving your balance to a different card, then smack you with a notice that your rate is going up. They hope you can't get another card and have no choice but to pay them the higher rate.

Nearly every card that says "low fixed rate" has some fine print which allows them to raise your rate at their option by notifying you. That makes the whole concept of "fixed rate" ridiculous.
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Think you hit the nail on the head on this one. Funny thing is my Capital One only has a max credit of 500 and i only have like 100 on it(use it for making purchases online).
 
You may want to get a copy of your and your wife's credit reports to make sure everything is really ok. There could be something on their causing problems for whatever reason. Personal recommendation is Equifax's credit report. I've used their's twice before and highly recommend it. It's a good idea to check your credit report twice a year to make sure things are ok.
 
Originally posted by: iamwiz82
i would get a credit rating that you can view right away. Sounds like something happened to your credit ratings.
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Yep, this would be my first step. Having this happen by both companies (Capital one is the devil BTW), raises an alarm.
 
Read your original agreement, most say the CC can change terms at anytime if they notify you.

Your comment about turning into a loan shark is your own doing. You use the CC as a loan, and thus they treat you like a loan shark. Duh. CC companies have been doing that for years. They aren't to be used as loans. Do whatever it takes to get rid of your balance NOW - even if it means taking a bank loan. There are free credit agencies that will help you do that.
 
Well, yeah, credit card companies ARE loan sharks. What do you think a credit card is? It's a loan. Those card companies aren't doing you any favors.

They have the complete right to do what they did. They have higher-paid lawyers than you.
 
Originally posted by: Kaervak
You may want to get a copy of your and your wife's credit reports to make sure everything is really ok. There could be something on their causing problems for whatever reason. Personal recommendation is Equifax's credit report. I've used their's twice before and highly recommend it. It's a good idea to check your credit report twice a year to make sure things are ok.
Click to expand...

Don't just check one report. Check all three agencies. They do NOT always have the same information on them, and if you have a mistake on all three, you must correct it on all three.
 
Originally posted by: Amused
Originally posted by: Kaervak
You may want to get a copy of your and your wife's credit reports to make sure everything is really ok. There could be something on their causing problems for whatever reason. Personal recommendation is Equifax's credit report. I've used their's twice before and highly recommend it. It's a good idea to check your credit report twice a year to make sure things are ok.
Click to expand...

Don't just check one report. Check all three agencies. They do NOT always have the same information on them, and if you have a mistake on all three, you must correct it on all three.
Click to expand...
I usually get Equifax's Score Power report w/FICO score for $12.95. They also have a 3 in 1 report (all 3 credit agencies) w/FICO for $39.95.
 
These threads make me glad I only have a $500 cc. I already know what it's like to try paying down debt, so I'm glad I don't have a $1k to $10k limit, I'd truly be screwed!
 
Originally posted by: zCypher
These threads make me glad I only have a $500 cc. I already know what it's like to try paying down debt, so I'm glad I don't have a $1k to $10k limit, I'd truly be screwed!
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It just takes a bit of self control. Both my credit cards are well into the $20k limit and rising. But I've never paid even a single penny to the CC companies. I don't even pay for stamps since I pay my bills online. But the CC companies keep sending me tons of rebate checks.

 
Originally posted by: Mutilator
Originally posted by: Amused
Originally posted by: Kaervak
You may want to get a copy of your and your wife's credit reports to make sure everything is really ok. There could be something on their causing problems for whatever reason. Personal recommendation is Equifax's credit report. I've used their's twice before and highly recommend it. It's a good idea to check your credit report twice a year to make sure things are ok.
Click to expand...

Don't just check one report. Check all three agencies. They do NOT always have the same information on them, and if you have a mistake on all three, you must correct it on all three.
Click to expand...
I usually get Equifax's Score Power report w/FICO score for $12.95. They also have a 3 in 1 report (all 3 credit agencies) w/FICO for $39.95.
Click to expand...

If you order the simple $9 online report from each agency, correcting mistakes is much easier, because you can challenge them right there online when you get the report.

Equifax

Experian

Transunion
 
I once screwed myself by not lookin into paying credit cards on time and never paid attention to their statements. 🙂 well back then I had a 5K debt. Paid it off with a single payment and never will I go back to the hole. good luck in controlling yourself from spending.

--Scsi
 
I would bet money something happened that you don't know about (missed payment, something of that nature - Even if you yourself didn't do it). It's pretty common for CC companies to have terms written so that if you get anything negative on your credit report (even if it's not with them) they can jack your rates through the roof.

Viper GTS
 
This is why I took out a home equity loan at 8% fixed to pay off two credit cards that were at 12% and rising, in the fine print they say they can and will raise your interest rate for reasons not directly related to your credit rating.
 
Don't get Capital One or Providian CC's. They are both subprime lenders and tend to charge really high rates. Go with the more established names like Citi or Amex.

When the economy is bad like it is now, the subprime lenders tend to get hit hard and thus they're upping the interest rates.
 
I have a couple credit cards, but I use them as a buffer zone between online/mail order retailers and my cash. If I have a problem, the CC companies will be a bit more responsive since they NEED my cash, whereas my bank HAS my cash and already forked it over. I typically carry only a month's balence.
 
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