Thread: credit card rate increase

I was just notified that my credit card finace rate was beng raised due to the economy.My question is do they have the right to apply this rate increse to my current balance?I called and said I wanted to freeze my account to pay off my existing balance monthly at the current rate not the increased rate.They can cancel my card and just continue collecting the amount I currently owe.My account has always been in good standing and is now.They told me I do not have that option.The supervisor I spoke with said the law allows them to do the rate increase.Are they correct?Thanks

I'm not a lawyer, but yes - read your terms and conditions document that they send you every year. I believe there are limits on how far they bump your rate, but if it's an adjustable rate they can do it.

I got a similar notice on one of my cards in the last few weeks. I'm glad I am not carrying a balance on that one right now.

Good luck to you!

Thank Magic,My account is a fixed rate.They want to bump it up from 10 to 15 %.I just find it hard to accept that they can do this with no opportunity to close the account at the present finance rate.I have never read anything in the card holder agreement that states they can do this.They simply say it is legal as they did so before the 20th of Aug.this year.

oh, that is interesting. I was assuming it was a variable rate. Well, your recourse is to apply for a new credit card with a low intro rate and just transfer the balance. That is if you can't pinpoint exactly in their terms where it is or isn't legal. I wonder if it'd even be worth pursuing legal action.

Let us know what you do because I bet others are facing this situation, too.

Magic,One of the things credit card companies have temporarily stopped offering are balance transfers.Where offered they make you pay a 5% fee just as though it were a cash advance.They also limit your low rate to about 6-9 months then it goes through the roof.They used to offer low fixed rates until the loan was paid off as long as there were no late payments.Those days are gone.I looked into that as a possible solution.I have gotten a complaint form from the Attorney General's office and will be sending it to them.On the phone they said they didn't know of any answers to my question but once they get the form they will pursue it.I may also consult an attorney.I will let you know what I find out but it looks as though it may take a few weeks.I have good credit,am always early making payments but am still being told it's the "Economy ".

I know I'm replying to a thread that has been dormant for some time, but I wanted to say that the exact same thing happened to me in 2008. You might see my other post in this Credit Card forum about having my available credit stuck in a "dead account."

In late 2008, Bank of America notified me that they were changing my 5.9% fixed rate card to a variable rate card at 17%. They offered me a "just say no" to basically cancel the account. They said if the card receives any further activity, then the account will change to a 17% variable. I had that card for years without missing a single payment. $30,000 limit. Brought it up and down numerous times. I didn't have a lot of nice things to say to them. Unfortunately, I had just put around $25,000 on this card for various reasons (some good, some bad). I had many more thousands of dollars to spend, so I had to open up another card with CapitalOne for $15,000. This of course was a variable rate card. I've since paid my CO card all the way down and brought it all the way up again and again, while I've been twiddling away slowly at my 5.9% fixed BoA. It is down to $10k now.

I've been terrified that someone is going to get my BoA number and charge something to it, then, even though I might disput the charge, my account will be "active" all of a sudden, and I will be changed to 17% variable, or whatever they want, I guess!

None of my cards are subjected to the Credit CARD Act of 2009! In 2011, my household has gone to a no-credit-card budget. We are way over our 20% utilization goal, and now that medical bills and whatnot has settled down, we have the time to ease off on our spending and pay down our cards. When our cards are all down to zero, we are going to start cancelling them. Again, none of our cards are subjected to CCA2009, so even CapitalOne can just make our interest rate retroactively higher on a whim. I've reviewed our T&C, and I can't find anything that says they are not allowed to do whatever they want to the principle on the card. My only hope, if I want to have some active credit, is to open up a new account with someone post-CCA2009. I probably won't get a very good interest rate, but looking back on it 5.9% fix at the whim of the lender is a lot worse than 25% fixed with the lender's hands tied.

I have no trust for credit card companies anymore. This entire industry is built on a foundation of fraud! Bank of America will never see my business again, that is for sure! I even changed my mortgage just because they bought up my mortgage company. I would be more than happy to work with a lender that offered upfront, honest, personal contraction but had a higher fixed rate, than work with any big business lender that thrives off ignorance and stupidity.

I have been ignorant, but by damned I won't be stupid. I've learned my lesson, and I've learned to hate and mistrust all financial institutions. This battle will be fought on my terms, and even if I have to retreat from the fiscal battlefield and my family has to learn to survive on merger credit, then so be it.

Patrick