Author Topic: A Credit Card You Want to Toss  (Read 4614 times)

0 Members and 1 Guest are viewing this topic.

Offline NHSparky

  • Hero Member
  • *****
  • Posts: 24431
  • Reputation: +1278/-617
  • Where are you going? I was gonna make espresso!
A Credit Card You Want to Toss
« on: February 11, 2008, 07:27:58 AM »
A Credit Card You Want to Toss

by Robert Berner

LINK

(Excerpt)

Credit-card issuers have drawn fire for jacking up interest rates on cardholders who aren't behind on payments, but whose credit score has fallen for another reason. Now, some consumers complain, Bank of America (BAC) is hiking rates based on no apparent deterioration in their credit scores at all.

The major credit-card lender in mid-January sent letters notifying some responsible cardholders that it would more than double their rates to as high as 28%, without giving an explanation for the increase, according to copies of five letters obtained by BusinessWeek. Fine print at the end of the letter—headed "Important Amendment to Your Credit Card Agreement"—advised calling an 800-number for the reason, but consumers who called say they were unable to get a clear answer. "No one could give me an explanation," says Eric Fresch, a Huron (Ohio) engineer who is on time with his Bank of America card payments and knows of no decline in the status of his overall credit.

Bank of America spokeswoman Betty Riess confirms some bank cardholders could be receiving rate increases for reasons other than declines in credit scores, such as running higher balances with their Bank of America cards or with other creditors. She says the increases are part of a "periodic review" that assesses customers' credit risk. She declined to say if the Charlotte (N.C.) bank had changed its credit standards thereby bumping some consumers' rates or how many cardholders were being affected by the review. Bank of America has 40 million U.S. credit-card accounts.

Buzz about the letters is building on the Internet. Since mid-January Credit.com, a credit-card information site, has received 40 complaints from consumers Bank of America had notified of sharp rate increases, even though they were current on their bills, says Emily Davidson, a Credit.com researcher. Complaint sites My3cents.com and BankofAmericaBadforAmerica.org say they have also received similar complaints.

The so-called "opt-out" letters give borrowers the option of no longer using their card and paying off the balance at the old rate. But they must write Bank of America by later this month if they plan to do so—otherwise their rates on existing and new balances automatically rise.

===================================================================================

They gotta cover all those bad mortgages and credit cards for illegals somehow!

“Any man who thinks he can be happy and prosperous by letting the government take care of him better take a closer look at the American Indian.”  -Henry Ford

Offline Chris_

  • Little Lebowski Urban Achiever
  • Hero Member
  • *****
  • Posts: 46845
  • Reputation: +2028/-266
Re: A Credit Card You Want to Toss
« Reply #1 on: February 11, 2008, 07:49:38 AM »
I pay my cards down to zero every month.  So I don't really pay attention to interest rates.
If you want to worship an orange pile of garbage with a reckless disregard for everything, get on down to Arbys & try our loaded curly fries.

Offline DumbAss Tanker

  • Hero Member
  • *****
  • Posts: 28493
  • Reputation: +1707/-151
Re: A Credit Card You Want to Toss
« Reply #2 on: February 11, 2008, 07:51:45 AM »
Quote
They gotta cover all those bad mortgages and credit cards for illegals somehow!

True, and this is what the idiot Leftists in the Dumbocrat Party seem to be incapable of understanding.  When you are dealing with a mega-bank (or even just a highly-integrated economy with many smaller and more specialized institutions), any particular type of turbulence is not a zero-sum game based on that type of transaction; money (or more accurately, debt) is a commodity, and other forms of that commodity plus the transfer cost will just be used to cover the shortfall.  The positive side is that the institutions are robust and will therefore withstand any turbulence other than collapse of the monetary system, the bad side is that the consumer in general pays for the mistakes of the institutions.

It's analogous to the logical flaw in punitive damages against a corporation - does it actually hurt the institution, no, the cost immediately becomes overhead cranked into everything they do, ultimately to be paid by the customers, not the wrongdoer...in fact as medical costs show, the long-term effect is to raise prices for all businesses in that sector, because once one of them has been nailed the insurance cost for the rest of them rises correspondingly, and therefore gets passed through to all the customers in the whole sector.
Go and tell the Spartans, O traveler passing by
That here, obedient to their law, we lie.

Anything worth shooting once is worth shooting at least twice.

Offline NHSparky

  • Hero Member
  • *****
  • Posts: 24431
  • Reputation: +1278/-617
  • Where are you going? I was gonna make espresso!
Re: A Credit Card You Want to Toss
« Reply #3 on: February 11, 2008, 08:32:20 AM »
Or to translate tanker's post into terms even a liberal can understand:

It doesn't matter WHAT balance you carry--you're still gonna pay for someone else's ****ups.
“Any man who thinks he can be happy and prosperous by letting the government take care of him better take a closer look at the American Indian.”  -Henry Ford

Offline DixieBelle

  • Administrator
  • Hero Member
  • *****
  • Posts: 12143
  • Reputation: +512/-49
  • Still looking for my pony.....
Re: A Credit Card You Want to Toss
« Reply #4 on: February 11, 2008, 09:45:44 AM »
DUmmies cry foul in 3....2.....1
I can see November 2 from my house!!!

Spread my work ethic, not my wealth.

Forget change, bring back common sense.
-------------------------------------------------

No, my friends, there’s only one really progressive idea. And that is the idea of legally limiting the power of the government. That one genuinely liberal, genuinely progressive idea — the Why in 1776, the How in 1787 — is what needs to be conserved. We need to conserve that fundamentally liberal idea. That is why we are conservatives. --Bill Whittle

Offline Lacarnut

  • Hero Member
  • *****
  • Posts: 4154
  • Reputation: +316/-315
Re: A Credit Card You Want to Toss
« Reply #5 on: February 11, 2008, 10:11:27 AM »
I read an article about a man who made $80k paid his BOA credit card on time, never was late and they jacked his rate from around 10% to 21%. He called them and he was told that he was not paying down on the principal fast enough and that was why it was raised.

I have a BOA thru LL Bean but I pay my balances off every month on all credit cards.

Tightening of credit is a good thing. Americans need to save more and spend less. One day the economy will go south and those that are heavily in debt will be in big trouble if they lose their job.   

Offline DixieBelle

  • Administrator
  • Hero Member
  • *****
  • Posts: 12143
  • Reputation: +512/-49
  • Still looking for my pony.....
Re: A Credit Card You Want to Toss
« Reply #6 on: February 11, 2008, 10:45:54 AM »
People don't realize how credit/banking really works. There isn't a piggy bank with an unlimited supply of money just waiting for you to take.
I can see November 2 from my house!!!

Spread my work ethic, not my wealth.

Forget change, bring back common sense.
-------------------------------------------------

No, my friends, there’s only one really progressive idea. And that is the idea of legally limiting the power of the government. That one genuinely liberal, genuinely progressive idea — the Why in 1776, the How in 1787 — is what needs to be conserved. We need to conserve that fundamentally liberal idea. That is why we are conservatives. --Bill Whittle

Offline Chris_

  • Little Lebowski Urban Achiever
  • Hero Member
  • *****
  • Posts: 46845
  • Reputation: +2028/-266
Re: A Credit Card You Want to Toss
« Reply #7 on: February 11, 2008, 10:54:11 AM »
I read an article about a man who made $80k paid his BOA credit card on time, never was late and they jacked his rate from around 10% to 21%. He called them and he was told that he was not paying down on the principal fast enough and that was why it was raised.

I have a BOA thru LL Bean but I pay my balances off every month on all credit cards.

Tightening of credit is a good thing. Americans need to save more and spend less. One day the economy will go south and those that are heavily in debt will be in big trouble if they lose their job.   
That's why I keep 6 months' income in a CD where I can get to it, and "pay myself first" $400/month in a relatively high-interest savings account.  The savings account is for major purchases.  I am weird that way -- if I can't pay cash, I do without.  That included remodeling my kitchen, carpeting my living room and now, finally getting an HD TV.

 
If you want to worship an orange pile of garbage with a reckless disregard for everything, get on down to Arbys & try our loaded curly fries.

Offline Lacarnut

  • Hero Member
  • *****
  • Posts: 4154
  • Reputation: +316/-315
Re: A Credit Card You Want to Toss
« Reply #8 on: February 11, 2008, 12:25:04 PM »
That's why I keep 6 months' income in a CD where I can get to it, and "pay myself first" $400/month in a relatively high-interest savings account.  The savings account is for major purchases.  I am weird that way -- if I can't pay cash, I do without.  That included remodeling my kitchen, carpeting my living room and now, finally getting an HD TV.

 

My parents went thru the depression; they were very thrifty. They financed their first house (paid it off early) and over a 40 year span bought two more and paid cash. They never financed a car or any consumer products. I think the only credit card they had was for gasoline.   

Offline Chris_

  • Little Lebowski Urban Achiever
  • Hero Member
  • *****
  • Posts: 46845
  • Reputation: +2028/-266
Re: A Credit Card You Want to Toss
« Reply #9 on: February 11, 2008, 12:42:00 PM »
That's why I keep 6 months' income in a CD where I can get to it, and "pay myself first" $400/month in a relatively high-interest savings account.  The savings account is for major purchases.  I am weird that way -- if I can't pay cash, I do without.  That included remodeling my kitchen, carpeting my living room and now, finally getting an HD TV.

 

My parents went thru the depression; they were very thrifty. They financed their first house (paid it off early) and over a 40 year span bought two more and paid cash. They never financed a car or any consumer products. I think the only credit card they had was for gasoline.   
I grew up pretty poor -- I think that is why I am so debt averse.  If you haven't paid it off you don't truly own it.  I did finance my cars but I paid them off in 1/2 the time and now put those car payments into the mortgage.

I was reading in the LAT -- they were doing a money makeover on a guy that had $50K in Credit Card debt and who got remarried and then went on a $9K honeymoon.  My honeymoon was under a grand.  What is wrong with people today?  Don't they think debt is real?
 
If you want to worship an orange pile of garbage with a reckless disregard for everything, get on down to Arbys & try our loaded curly fries.

Offline Lacarnut

  • Hero Member
  • *****
  • Posts: 4154
  • Reputation: +316/-315
Re: A Credit Card You Want to Toss
« Reply #10 on: February 11, 2008, 12:55:53 PM »
What is wrong with people today?  Don't they think debt is real?
 

Evidently our politicians including the present administration think we can spend like drunken sailors today and let tomorrow take care of itself. These home mortgage teaser rates at 1.9% and interest only payment mortgages are the most insane thing I have ever heard of. Our current crop of politicians are making matters worse with stimulus rebates.

Offline bijou

  • Topic Moderator
  • Hero Member
  • *****
  • Posts: 8937
  • Reputation: +336/-26
Re: A Credit Card You Want to Toss
« Reply #11 on: February 11, 2008, 01:34:41 PM »
That's why I keep 6 months' income in a CD where I can get to it, and "pay myself first" $400/month in a relatively high-interest savings account.  The savings account is for major purchases.  I am weird that way -- if I can't pay cash, I do without.  That included remodeling my kitchen, carpeting my living room and now, finally getting an HD TV.

 

My parents went thru the depression; they were very thrifty. They financed their first house (paid it off early) and over a 40 year span bought two more and paid cash. They never financed a car or any consumer products. I think the only credit card they had was for gasoline.   

My parents also grew up in a time and place where debt was somewhat shameful, neither of them ever had a credit card.  They took out a mortgage for the house but after that if they didn't have the money for something they didn't buy it.