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Latest Obama Target: Credit Card Companies and Their Lending Rules

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Master Card from GM, (HSBC), who I have been with for quite some time, sent a letter, undated. In it stated that my account would, as of 11/19/09, no longer be at a fixed 9.99%, but at a variable, which would be as of 8/31/09, 16.99%. I can agree to keep the card or not. WHY would a company such as this, do this to a customer who has never missed a payment, (which is usually more than is required), with credit scores, (mine above 760 and my wifes above 740)? Not a good business practice would you say? I certainly would like some sort of explaination that would condone such a practice.
If anyone would care to get back to me it would be greatly appreciated.
Thank You.

Thomas W. Devereaux, Jr. of GA 9:02AM October 10, 2009

I feel if the Banks can get an Bail-out and receive Government money...We should be allowed to claim the interest charges when we file our income Taxes .As it was years ago,when we made less money . Todays' some of us have no jobs +no raises+our money is being used to Bail-Out the Banks.......
The Internal Revenue Services has more pity , than the Banks and Credit Cards Companies, which Credit cards holders has made them to the height and level they are in these days.....While some 0f us deceided to live like the Jones...with a little more than we needed. Buying on credit and saving on 401k, due to the Banks do not pay interest on an saving accounts. There is no more saving Banks, only Commerical Banks, which they can pay their CEO's commissions and trips+++++While people have lost on their savings....

Emma Westbrook of FL 6:48PM July 16, 2009

It seems that the admin is finally doing something about credit cards. Unfortunately for me, this comes way too late. I lost my job while at a critical medical crisis and got behind on ONE card. They hit me with a penalty and raised my rate by 10%. The next month, all my cards raised my rates considerably. With the fees and rates piling up, it was as if the companies were begging me to file bankruptcy. I was lucky enough to find an honest debt settlement company that cut my payments in half and will have me out of debt in 2 years (Thanks Rob at DRC 858-483-9600 x104), but it would have been nice to save the agony by being able to work directly with all the cards at once. In fact, that's why I went to Rob at DRC. It seemed the credit card companies were all working in concert against me (they all seemed tipped off by that one missed payment) so I wanted to work w/ a group that bulked me in with thousands of others in my position, which leveled the playing field and brought the card companies into a more negotiable mood.

Sharon H. of CA 12:54PM May 04, 2009

I wish I was hearing about what the credit card companies are also doing to the businesses that take credit cards. I have a small resale shop and I am having more than $1 per transaction taken out of my sales, plus other monthly fees, plus NOW an annual (redundant) qualification survey that cost me $35 annually, plus my time. And if i do not do the survey they will take $20 a month from my account. Why this survey??? There was a major security breach with millions of people's credit card numbers being stolen. So the Credit cards companies are having to close those accounts and issue new numbers/cards to millions....a big expense for a security breach which they are passing on the users of credit cards, plus the businesses who accept them. And small businesses cannot afford this nickle & dime expense from credit card companies. My merchant fees last year were more than one month's lease for my building. Now it will be more.

wowresale of TN 7:48PM May 03, 2009

I have only one credit card I use for online purchases such as plane tickets, etc., and I never carry a balance. However, I do observe what card issuers are up to, and what really makes my blood boil is situations in which a card company uses a missed or late payment with some other creditor not even affiliated with them as an excuse to raise interest rates on their customers to ridiculously high figures, even though said customer may have a perfect track record with the card issuer. That should never be allowed to happen.

Jimbo of GA 7:37PM April 28, 2009

I discovered a long time ago you don't have to put up with the major banks and their credit card programs! I have devoted almost all of my spending to my credit unions' VISA & MasterCard. The only credit card companies that are either cutting limits and/or increasing interest rates are associated with the major banks, such as Bank of America, Chase, American Express, Capital One, etc. I carry a VISA card with Unitus Community Credit Union in Portland, OR. Current 7.9% APR for both purchases & cash advances. Do check around in your area for credit unions and/or small community banks!

Cowboy John of MN 8:58PM April 27, 2009

My very first credit card was a Discover -- way back in the 80's when I first got out of grad school (and when Discover was owned by Sears!). With a PhD in engineering, I've always have had a good income and never have been out of work. Over the years I favored the Discover over other cards due to the rebate feature, plus my long history with the company.
Earlier this year, I somehow messed up the online monthly payment, which I usually pay in full each month. I'm guessing I did not click the final "submit". I discovered the error a few days later, and immediately payed off the entire balance. Well, on the next statement, I noticed I a substantial interest penalty and late charge. The interest looked awfully large, and then I noticed my interest rate had jumped to 40%. Even after calling to complain, it still remained at 20%, about double my other cards. Within days of this, I got an offer in the mail from Discover to apply for a business card with attractive terms due to my "superior" credit history. They even noted in the letter that I had been a customer of Discover since the 80's. I was so mad, that I immediately pulled the Discover card from my wallet. Some thanks for all those years of customer loyalty.
As I tell my kids, you vote with your dollar. Use your dollar to reward good behavior, and pull your dollar to punish stupid behavior. Just think what would happen if they ticked off and lost all their best customers. Well, I'm guessing they would be left with a whole lot more risk! Don't all smart businesses know to at least treat your best customers well?

Tom of IL 4:38PM April 27, 2009

During the late 1970's interest rates had skyrocketed and companies issuing credit cards legitimately complained that many state usury rates made it impossible for them to cover costs, let alone make a profit. So, many threatened to stop issuing the multi-month plastic.
The result was that in fairness, in 1980 the federal government allowed "national banks" to be exempt from limits on credit card interest rates imposed by individual state usury laws. Of course, the banks stated that as interest rates dropped out of the teens that credit card rates would follow suit.
Needless to say this didn't happen. As interests rates dropped, as we saw throughout the latest Bush administration, banks took the ultimate GREEDY advantage of the situation citing increased administration costs and the all time favorite excuse of "RISK MANAGEMENT". Within the last two years I spoke to a supervisory customer service representative of one of the largest banks in the country who attempted to defend a 19.99% rate when the prime stood at about 4% saying that sometimes you've got to charge five times what you pay to make a profit. And with recent changes to grab as much as they can before federal restrictions take effect in 2010 - huge RETROACTIVE interests fees, Universal debt monitoring, etc - Americans like me need relief now!

Dave of NJ 3:22PM April 27, 2009

I understand this to help me. I have three credit cards, all issued with low interest. Some months, the balance is paid in full, other times the minimum or more. I am never late and I always pay.
Last year I was sent a 0% interest check to use, by one of these credit card companies where I had a very very low balance. I used it to pay my childs annual tuitition as it would save me a good bit of money over the year by eliminating the monthly handing fee by the school and was able to receive a $500 discount by the school for paying in full. This brought my balance close to my limit, thus reporting on my credit as having an account that was close to my limit.
Later I had a hospital bill turned over for collection, WHICH WAS AN ERROR on the hospital as it was an insurance problem, later resolved. (This took me over a year to get it off my credit report) Between the hospital bill, the account nearing my limit along with the annual credit review of my second credit card - I was considered a risk by the credit card company on the annual review thus my available credit was cut in half, which also showed my as having another account nearing the limit. This increased my debt to credit ratio - which in turn made the 3rd credit card company up my interest rate to 32.9% on their annual credit review.
Of course I had the option of opting out of the new terms, which I choose to do. I opted out online, at the credit card companies website, where I receive my paperless statement and pay my bill each month. I went through my personal account messaging system. I got an approval via email from them saying they were closing my account and I could keep my original terms. Guess what? My interest rate jumped to 32.9% - when I questioned it, I was told I did not opt out the proper way?????
Each and every one of these accounts were paid on time, above and over minimum due, at times paid off. What is fair about this? What is wrong with having guidelines addressing these unfair practices? I do not see it as an administration out of control, but credit card companies out of control. Nor do I see it as a means to dismantle our economic system but rather one to aide our economic system.
Of note: A direct result of these practices hurt us when buying a new car - our credit score had changed drastically and we were unable to get the 0% interest rated offered by the dealership. Thank goodness for credit unions who treat you like a person and take all things in to consideration - not just your credit score.
These unfair practices placed undue expenses and burdens on my family. My money was going to credit card companies paying extremly high interest rates due to this unfair practice. This money could have been put back into the economy instead of these banks who were already making plenty of money at the lower interest rate.

Monet of LA 2:00PM April 27, 2009

As the administration tries to crack down on credit card companies, they are sneaking thru another unfair charge-they are quietly raising their cash advance fees-to 4% and they tell you this this doesn't count as an interest charge. So you get a cash advance for 0% to 2.99% and you have to pay 4%. Go figure. This really adds up. Get $1000 pay $40, get $10,000 pay $400 and you were able to get this $10,000 for 6 months @ 0% what a deal!!! And oh yea pay them just $400, so how does that figure 0% when you have to pay them $10400. They sure have figured out how to screw us again. And nobody in the goverment even looks at this!!! Thanks.

Jim of TX 2:00PM April 27, 2009