primitives to get credit card shock

[franksolich]

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x6729886

Oh my.

The racist babbling sister primitive, who's getting a divorce:

babylonsister  (1000+ posts)        Thu Oct-08-09 05:57 PM
Original message
 
Credit card shock - miminum payments may rise abruptly

With new credit card rules looming, some cardholders are seeing painful changes

Paul Baker was smacked with a rude surprise when he opened a notice from his bank informing him that his minimum monthly payment had skyrocketed from $560 to more than $1,300.

The 31-year-old Stephenville man didn’t have one of those toxic subprime mortgages with a teaser rate that suddenly reset. It was a Chase Freedom credit card.

"The payments are now bigger than my mortgage," said Baker, who used the card to help fund his educational-toy business.

Chase didn’t alter the 4.9 percent interest rate. Instead, it ratcheted up his minimum payment from 2 percent of principal to 5 percent.

Baker is not alone.

Major banks are scrambling to cull their least profitable cardholders by making terms difficult or by raising interest rates before the new credit card reform bill takes effect Feb. 1, said Mitch Franklin, an assistant professor of accounting at Syracuse University’s Whitman School of Management.

"I know people who have 800 credit scores getting their line of credit cut," Franklin said in a call from New York. A credit score over 750 is generally considered strong.

Aside from higher rates and increased minimum payments, consumers have complained of fixed rates being changed to variable rates; new fees; a decline in new offers; and fewer rebates and rewards, said Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling.

"Why is this happening? Some think that the issuers want to get in front of the new rules that will be imposed on them in 2010," Cunningham said. "Others think that it is due to creditors being on the ropes financially and wanting to decrease their risk while getting any outstanding debt repaid as quickly as possible."

more...

http://www.star-telegram.com/804/story/1669642.html

villager  (1000+ posts)      Thu Oct-08-09 05:59 PM
Response to Original message
 
1. Shouldn't we be shocking them back with a credit card strike?

notadmblnd  (1000+ posts)        Thu Oct-08-09 06:01 PM
Response to Reply #1
 
3. I sorta did that.

I imagine they were shocked when I stopped paying it.

Joe Fields (1000+ posts)        Thu Oct-08-09 06:02 PM
Response to Reply #1
 
4. It would be one of my most fervent wishes, for all Americans to call their credit companies and tell them that THEY are the ones cutting the company off. Shred the cards and pay the bills off.

**** all of those jackals.

dugaresa  (738 posts)       Thu Oct-08-09 06:00 PM
Response to Original message
 
2. i know another small business affected by this

two people who started a restaurant but used personal credit cards to pay for renovations. the business was slowly ramping up and doing okay and they were making their payments plus some but just recently the credit card minimum payment skyrocketed and now they are contemplating letting it go and the one partner may file bankruptcy.

customerserviceguy  (1000+ posts)      Thu Oct-08-09 07:14 PM
Response to Reply #2
 
13. It's just financially irresponsible to use your credit cards for a business loan. If you have a solid business plan and/or a track record, you should be able to borrow money at a reasonable rate with a fixed payment plan. If you cannot do that, then you get into the use of credit cards, and hold the gun to your own head with them, because you don't have a sound business plan to pay back a loan.

Scout  (1000+ posts)      Thu Oct-08-09 06:02 PM
Response to Original message
 
5. just set up a program with a debt management company today....

it's been coming on for a while, struggling to keep our heads above water by ourselves.

one of the final straws was the notice from Citi that our current account, which originally had 0% interest because it was a balance transfer, but was raised when we had a late payment ... now is 18.99% and they are raising it to 25.99% or we can close the account to "lock-in" the 18.99% rate.

i don't have a problem paying a late fee if i'm late on a payment, and i know i agreed to the outrageous terms (desperate people do desperate/stupid things) but it really chaps my ass to the nth degree when they jack the interest on a balance of thousands when you are late with a payment of say, $350.

then they have the gall to tell you that they jacked your rate because you are a greater risk!!! i'm not a risk of ANYTHING except them making a few extra bucks on a late payment now and then ... i can make the payments until they jack the interest so high that you just can't afford the monthly payment.

Deja Q  (1000+ posts)        Thu Oct-08-09 06:03 PM
Response to Original message
 
6. If $560 is 2%, that's one big-ass total bill.

I've got some debt of my own, like who doesn't, but that's a HUGE hike.

Still, it gets debt paid off more quickly. Not entirely a BAD happenstance...

customerserviceguy  (1000+ posts)      Thu Oct-08-09 07:11 PM
Response to Reply #6
 
12. Yep, it's about $27K and if you're silly enough to accumulate that much debt on a credit card, then you might deserve whatever the robber-baron banks do to you.

At least he gets to keep his ridiculously low interest rate, despite his financial mismanagement that got him into this position.

Skink (1000+ posts)      Thu Oct-08-09 06:15 PM
Response to Original message
 
7. this could be bad for the Christmas shopping season.

It's like these companies saying pay now because we know you won't pay later.

endless october  (445 posts)        Thu Oct-08-09 06:24 PM
Response to Original message
 
8. with an APR above 24 percent...

...i will be hesitant to ever charge anything and not pay it off that month ever again.

The silly primitive:

SoCalDem  (1000+ posts)        Thu Oct-08-09 06:38 PM
Response to Reply #8
 
9. I used to laugh at my friend who would scour ads to save 15% only to buy a bunch of stuff and use a credit card...then take months to pay it off..

so much for "saving" money

she would also drive all over town to find gas stations that had gas for 1 cent less  I reminded her that at 16 gallons a fill up, she was saving a whopping 16 cents for wasting 30 minutes and however much gas she burned while getting there

Whenever she was driving somewhere, with me as a passenger, I would always hand her a dollar, and ask her to fill up at the Mobil near my house ..or I would fill it for her on my gas card sometimes

mullard12ax7 (196 posts)      Thu Oct-08-09 06:40 PM
Response to Original message
 
10. I'm sure the people who let war criminals go will solidly address banking criminals in some fictitious propaganda-world that American citizens are supposed to believe.

The clueless primitive:

ddeclue  (1000+ posts)        Thu Oct-08-09 06:44 PM
Response to Original message
 
11. This will start a genuine peasants with pitchforks revolution that will back fire on the CC companys

If this happens to me I'll be bringing it up with about 5 Florida Congressmen, 1 U.S. Senator, 1 State Senator, 3 State Reps and the State CFO along with any media people I can get the attention of.

Good luck, clueless primitive.

[Rebel]

notadmblnd  (1000+ posts)        Thu Oct-08-09 06:01 PM
Response to Reply #1
 
3. I sorta did that.

I imagine they were shocked when I stopped paying it.

I'd imagine you're gonna be more shocked next time you apply for a home or auto loan.

[The Village Idiot]

I'd imagine you're gonna be more shocked next time you apply for a home or auto loan.

but but but, they passed that new credit card law....

[GOBUCKS]

I'd imagine you're gonna be more shocked next time you apply for a home or auto loan.

They have nothing to worry about.
http://www.youtube.com/watch?v=P36x8rTb3jI

[DumbAss Tanker]

Rather obvious why they'd be switching rates from fixed to variable, I would think, to anyone but a Dem living in downtown Denial City.  Means their economists are forecasting significant inflation, and not far off.

[The Village Idiot]

Rather obvious why they'd be switching rates from fixed to variable, I would think, to anyone but a Dem living in downtown Denial City.  Means their economists are forecasting significant inflation, and not far off.

Gov of Iowa orders 10% across the board cuts, agencies will be abolished. Will not touch the rainy day because he says 2011 is going to be even worse than 2010.

[RobJohnson]

I've heard of a couple friends getting letters in the mail letting them know the rate is going up on their card. One person used the card for a pretty big purchase while waiting for a home to sell in another state. They never considered that low APR could triple all at once!

[formerlurker]

Gov of Iowa orders 10% across the board cuts, agencies will be abolished. Will not touch the rainy day because he says 2011 is going to be even worse than 2010.

Same here in MA.  Massive additional cuts to come down next week.  Of course I live a corrupt state (my bad - Commonwealth) where the cuts imposed will not affect the governor's cronies, special interest groups or God forbid he close his offices in D.C. and China.  

[thundley4]

Same here in MA.  Massive additional cuts to come down next week.  Of course I live a corrupt state (my bad - Commonwealth) where the cuts imposed will not affect the governor's cronies, special interest groups or God forbid he close his offices in D.C. and China.  

Illinois is in the same boat as most states. Like typical DimRats, they never consider cuts to welfare, but only cuts that will piss taxpayers off.  The governor wants to raise the income tax on the "rich" like all good DimRats do.

[BlueStateSaint]

Same here in MA.  Massive additional cuts to come down next week.  Of course I live a corrupt state (my bad - Commonwealth) where the cuts imposed will not affect the governor's cronies, special interest groups or God forbid he close his offices in D.C. and China.  

Add NY to the list.  Our idiot Governor called for reductions in the state workforce, which is something I can agree on (even working for NYS).  But then he went out and continued to hire people for his staff!More than a few were over $100,000 a year.

[NHSparky]

Aside from higher rates and increased minimum payments, consumers have complained of fixed rates being changed to variable rates; new fees; a decline in new offers; and fewer rebates and rewards, said Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling.

Fewer offers?  Less junk mail?  This is bad how, exactly?

[jukin]

About six months ago I had a card canceled because I had not used it in over a year.  This account I had had for over twenty years. The banks have to meet tighter loan/equity rules now and any credit card line is assumed to be maxed out for this purpose.  This was the government's doing from TARP.  Also had my rate on another one go up in these low interest times.  I don't carry balances but use the grace period to the maximum. 

P.S. Unless you are habitually late the CC companies will waive an occasional late fee.

[jinxmchue]

Why would you have a minimum payment of over $500 in the first place?

[Karin]

My HSBC just told me as of 11/15, it's increasing from 14% fixed to 17% variable.  Fortunately, balance is down to next to nothing and I'm keeping it there.  That DUmmy up there was right, this is going to kill the Christmas shopping season.  Everybody's getting homemade bread and beef jerky.  

Bluestate, my radio news says the blind idiot told everybody to cut 5 billion, but salaries and personnel were not to be touched.  I'm not sure what sofas they're going to look under to abide by those guidelines.  How much can you save on cheaper pens and the like?

[Karin]

BTW, I have completely forgotten what that CC legislation was supposed to do for people.  Anybody remember? 

[IassaFTots]

I got a notice that said they were upping it to 29%.  I had a choice to cancel account or accept the terms.  I canceled.  Only had a $300 limit and I hadn't used it in a few years.  

[thundley4]

BTW, I have completely forgotten what that CC legislation was supposed to do for people.  Anybody remember? 

It was supposed to make the CC companies be more upfront about the fine print, and to limit interest fee changes and a few other things.  They screwed up when they put the effective date several months into the future, which gave the CC companies plenty of time to jack up rates and other things to screw customers, even the good ones. It's another one of those "law of unintended consequences" things that tend to bite the Dems in the ass so often.

[GOBUCKS]

My HSBC just told me as of 11/15, it's increasing from 14% fixed to 17% variable.  Fortunately, balance is down to next to nothing and I'm keeping it there.  That DUmmy up there was right, this is going to kill the Christmas shopping season.  Everybody's getting homemade bread and beef jerky.  

When I was a kid, back in the dark ages before credit cards, I think some department stores carried
their own revolving credit accounts, but the really big deal for Christmas shopping was the
"Christmas Club" account. Banks used to advertise them heavily, and they were enormously
popular. I don't think they even paid interest, but nearly everyone I knew used them. You signed
up for a certain amount every month or every two weeks, and then around mid-November the bank
would send you a check for Christmas shopping. I remember a little booklet with tickets you used
for each deposit during the year. I haven't heard of a Christmas Club in many years.

[thundley4]

When I was a kid, back in the dark ages before credit cards, I think some department stores carried
their own revolving credit accounts, but the really big deal for Christmas shopping was the
"Christmas Club" account. Banks used to advertise them heavily, and they were enormously
popular. I don't think they even paid interest, but nearly everyone I knew used them. You signed
up for a certain amount every month or every two weeks, and then around mid-November the bank
would send you a check for Christmas shopping. I remember a little booklet with tickets you used
for each deposit during the year. I haven't heard of a Christmas Club in many years.

Back then people also used lay-a-way, which KMart has been advertising a lot , lately.

[Karin]

Thundley, you'd think a person with half a brain, who'd been bit in the ass so many times before, might say "hold on here a minute and let me think.  What is likely to happen?  Think."  Anyway, this bill was a cluster****, no doubt about it.  Did anybody benefit, I wonder?

Gobux, they advertise a Christmas club at my local bank.  I think they give you 1% interest.  Not a bad idea. 

[thundley4]

Thundley, you'd think a person with half a brain, who'd been bit in the ass so many times before, might say "hold on here a minute and let me think.  What is likely to happen?  Think."  Anyway, this bill was a cluster****, no doubt about it.  Did anybody benefit, I wonder?

Gobux, they advertise a Christmas club at my local bank.  I think they give you 1% interest.  Not a bad idea. 

I think the Credit Card companies benefited, because they were driven to raise rates and change terms even on good customers, not just the iffy ones.

[Celtic Rose]

I think the Credit Card companies benefited, because they were driven to raise rates and change terms even on good customers, not just the iffy ones.

In the long run though I don't think they will benefit.  I suspect that many good customers are the ones who use Credit Cards out of convenience and not out of necessity, so if the Credit Card companies make things too difficult, they won't have a problem canceling their accounts.

[RobJohnson]

When I was a kid, back in the dark ages before credit cards, I think some department stores carried
their own revolving credit accounts, but the really big deal for Christmas shopping was the
"Christmas Club" account. Banks used to advertise them heavily, and they were enormously
popular. I don't think they even paid interest, but nearly everyone I knew used them. You signed
up for a certain amount every month or every two weeks, and then around mid-November the bank
would send you a check for Christmas shopping. I remember a little booklet with tickets you used
for each deposit during the year. I haven't heard of a Christmas Club in many years.

The "interest" was the last payment was free. You would pay for 49 weeks, they would pay week #50. I remember setting up a $2 a week club as a kid.

[RobJohnson]

Back then people also used lay-a-way, which KMart has been advertising a lot , lately.

Alot of stores got rid of lay a way plans four to five years ago, now they are making a comeback!

[jukin]

BTW, I have completely forgotten what that CC legislation was supposed to do for people.  Anybody remember? 

The idea, as all liberal/communist ideas are, was to make the responsible people pay for the irresponsible. Instead of putting high rates on the risky loans, they made the non-risky borrowers subsidize the risky one by force. The goal is to freeze up credit and put the economy into a further tailspin. 

I read that it was the law of unintended consequences that bites the liberal communist kabal but you just can't be wrong every single time. This is definitely on purpose.