ARGH!!! Credit card companies STINK!!! What are you going to do?

[coffeefreak]

So, did anyone watch the news last night? Congress has passed new laws that Credit Cards can no longer change your interest rate unless you're behind on payments. The news was reporting that since these changes do not take effect until 2010, expect your interest rate to change before than. I said to myself, "Wow, I'm glad I have XYZ card! They would never do that to me!" I received a flyer in the mail last night! My interest rate is being raised from 5.75% to 7.75%, effective Feb 1st!!!!! They assured me in the letter that all their customers rates are going up, and that no credit checks were done. When I called them to cancel my card, they gave me this big story about how raising all our rates will stimulate the economy and I will be doing my part by going along with this!!!!!!!!:banghead: I told him this was a load of CR*p! Consumers will not stand for this! The banks are just trying to make more money! So, we canceled our card. Now, they have to leave it at the current interest rate until we pay off the balance.

 

While I was typing this, guess who called me?!?! The Credit card company! They are sooo concerned about losing me, they want to make sure I understand what I'm doing by canceling my card. We had a very nice discussion about how I know exactly what I'm doing, just as the bank knows exactly what they're doing. They don't care enough to leave my interest rate alone, they just tried to bully me into keeping the card. They told me my credit score will drop by 30%, that I'll never find another card for 7.75% interest, or even below 10%, that as a loyal member who has all her accounts with them, I should be doing my part by paying the higher rate because it keeps other banking costs down etc, etc. What a load of hoo haa!!! I'll stop here because I've made this too long already.

 

So, what will you do when your credit card company ups your rate?

[5kidsforME]

I say everyone cut up their cards and let us all take a stand.

 

I am a huge Dave Ramsey fan. :001_smile:

[lionfamily1999]

What is this "credit card" of which you speak?

 

None of those in our house ;)

[coffeefreak]

I say everyone cut up their cards and let us all take a stand.

 

I am a huge Dave Ramsey fan. :001_smile:

 

Me too! The CSR told me I would have trouble getting credit after this, and I said, "Well, when you pay in cash, no one looks at your credit, do they?" She had to agree.

[coffeefreak]

What is this "credit card" of which you speak?

 

None of those in our house ;)

 

Someday I'll be just like you Lionfamily. Way to go!

[Tree House Academy]

Ha! I got the same line when I tried to cancel my card recently. This one man spent FOREVER on the phone with me telling me if it were him, he would leave it alone because we don't know what the economy will do...blah blah blah!

 

If my cc company raises my rate, I will cancel it without a second thought!

[Beth in Central TX]

This is exactly why we have no credit cards. I have a debit card to make on-line purchases. We have an emergency fund and never plan to borrow on credit again, so our credit score does not concern us one bit. If a company needs a credit score, we'll have them do manual underwriting or find another company that does. In the past 2 years, no credit cards and a falling credit score has not hurt us one bit. In fact, our car insurance premiums just went down by 5%; not sure why, but I'm definitely not complaining!

[HappyCrazyMama]

We don't have a cc company. ;)

[Colleen]

I don't have a clue what the rates are on our two Visas (one for business, one personal). We use them for sake of convenience, charging everything and paying them off in full each month. This allows us to receive frequent flyer points & cash backs, too. So if it's at all possible, I recommend only using credit cards when you won't have to carry a balance. And definitely don't let anyone bully you into staying with a particular company. Good luck!

[coffeefreak]

I guess I also should have added, CC companies have no reason to raise rates. For those that don't follow the fed, they actually LOWERED rates this week. This is why my rate has been at 5.75% and was due to go lower. Banks are simply wanting to make more money off us.

[Melinda in VT]

We don't carry a balance, and we need a credit card for our business. We have talked about getting a second business card so if the first does something obnoxious, we can drop it and still have a card.

[FO4UR]

I voted other, b/c I don't have a cc, and will not get one.

 

If I did have one, I would cancel, pay it off, and never look back.

[hornblower]

This doesn't affect us.

 

We have credit cards but we've never carried a balance in over 20yrs of having cards.

[elegantlion]

What is this "credit card" of which you speak?

 

None of those in our house ;)

 

We do not have a CC either. Life is much easier without worrying about interest rates.

 

Me too! The CSR told me I would have trouble getting credit after this, and I said, "Well, when you pay in cash, no one looks at your credit, do they?" She had to agree.

 

So true! We bought our last car used, the dealer said "it's this price if you pay cash, that price if you finance." No credit check. we financed and paid it off in 18 months. I like the green stuff much better.

[nutmeg]

We just won't play their game.

 

We have 1 cc with zero balance.

 

More important, we have a sufficient emergency fund to carry us through.

[Deidre in GA]

i have three active cc. the rate increases don't affect me since i never carry a balance.

[Kris]

I'm so glad to see all the responses from people who don't have credit cards. We haven't had them for over ten years and I've gotten *so* many funny looks from people because we're so "weird." And sometimes it has been a total PITA -- but right now? I'm sure glad we made that decision.

[Sharon in SC]

I don't have a clue what the rates are on our two Visas (one for business, one personal). We use them for sake of convenience, charging everything and paying them off in full each month. This allows us to receive frequent flyer points & cash backs, too. So if it's at all possible, I recommend only using credit cards when you won't have to carry a balance. And definitely don't let anyone bully you into staying with a particular company. Good luck!

 

Ditto.

[lionfamily1999]

Someday I'll be just like you Lionfamily. Way to go!

Lol, we both (dh and I) grew up in homes without credit cards and the first offers we got... well, I admit, it seemed like the sky was the limit. Then we read the fine print and the sermons (from our parents) came back to us and we decided we just didn't need the debt that much.

 

The sky's still the limit, we just have to fly on cash, rofl.

[NicksMama-Zack's Mama Too]

Ditto.

 

 

I have a beef with the fact that we paid to have it opened 3 years ago and now it's frozen/closed. Not lowered to reflect the diminished equity (we owe much less than it's worth), but frozen. We don't have anything on it, but it was nice to have it available. My dh asked for our closing costs refunded and GMAC refused. He assured them that if we ever get another mortgage, it won't be with them.

 

K

Edited December 19, 2008 by NicksMama-Zack's Mama Too

[OHGrandma]

We have a Discover that is used for personal and business, paid off monthly.

I have a MC that I use when needing a cc to pay family owned businesses that don't accept checks. Discover takes a bigger %, and I know every penny counts so that's my reasoning for using MC for some businesses.

[elegantlion]

I'm so glad to see all the responses from people who don't have credit cards. We haven't had them for over ten years and I've gotten *so* many funny looks from people because we're so "weird." And sometimes it has been a total PITA -- but right now? I'm sure glad we made that decision.

 

 

Here's to being weird! :thumbup1: I consider it my part to keep people thinking, or 2nd guessing, or whatever.

[kewb]

We cut up our cards 8 years ago. If we don't have the cash we don't get it. DH has a cc for his business and we have a Firestone one in case of emergencies. Otherwise it is cash on the barrel. I have never been happier.

[LBC]

I don't have a clue what the rates are on our two Visas (one for business, one personal). We use them for sake of convenience, charging everything and paying them off in full each month. This allows us to receive frequent flyer points & cash backs, too. So if it's at all possible, I recommend only using credit cards when you won't have to carry a balance. And definitely don't let anyone bully you into staying with a particular company. Good luck!

 

Yup. This is us, too. We actually have a MasterCard we use for business purchases that earns points toward free groceries. We've earned as much as $600 per month, so it's definitely worth it for us to use - but we never carry a balance.

 

Lori

[LisaKinVA]

Right now, our credit score is pretty important (since we're in the process of building/buying a home). So, I can't just cancel my cards.

 

However, all of our cards will be paid off in full in 2009 -- about the time we move into our home.

 

We may still use the cards for gas, or vacations -- but pay them off every month (rotating which card we use).

 

I won't pay them one red cent in interest, and once we're in our house, we will feel free to look for better offers (because there WILL be better offers).

 

But oh, the law of unintended consequences!!!

 

Some companies (out of fear or greed) may rue the day they began this policy, because some start-up company is going to offer 5.9% and their customers will jump ship by the boat load.

[siloam]

I don't have a clue what the rates are on our two Visas (one for business, one personal). We use them for sake of convenience, charging everything and paying them off in full each month. This allows us to receive frequent flyer points & cash backs, too. So if it's at all possible, I recommend only using credit cards when you won't have to carry a balance. And definitely don't let anyone bully you into staying with a particular company. Good luck!

 

 

Same here-pay them if full and use the rewards. Could care less what the rates are.

 

Heather

 

[coffeefreak]

Unfortunately, we come from families that are not smart with their money. We've had to learn by experience. But, at least we're learning! We had a Home Equity Loan too, but when I read the fine print and realized they could call the note at any time, I quickly canceled it.

 

For those who are like us and have CC! Don't be afraid! You're not alone! Snippity snip!

[Alice]

I don't have a clue what the rates are on our two Visas (one for business, one personal). We use them for sake of convenience, charging everything and paying them off in full each month. This allows us to receive frequent flyer points & cash backs, too. So if it's at all possible, I recommend only using credit cards when you won't have to carry a balance. And definitely don't let anyone bully you into staying with a particular company. Good luck!

 

This is exactly what we do. I have no idea what our interest rate is on the one credit card we have.

[JennifersLost]

Another person who pays the balance every month. I have to be careful; I have to send in the amount BEFORE I'm billed for it or they charge me extra. That really fries me. But up here in Canada I can't get a Visa check card (a debit card you can use online), so it seems to be my only option for online shopping. That's all I use it for.

[Matryoshka]

We have a few cc's but typically just use one of them, and we always pay off our balances every month - I have no idea what the interest rate even is on them.

 

I'm curious why they're threatening everyone that their credit score will be negatively affected by cancelling a card - why the heck would that be?? I mean, I get it if you don't pay off the balance, but if you're still paying the balance off, what does it matter if the card is cancelled or not? We've cancelled lots of cards in our time (admittedly without outstanding balances) and don't recall that ever coming up - what does it matter it you are currently using their particular card or not? I would think that cancelling a card shows financial restraint and should improve your credit rating. What am I missing??

[Jane]

When I called them to cancel my card, they gave me this big story about how raising all our rates will stimulate the economy and I will be doing my part by going along with this!!!!!!!!:banghead:

 

 

I am ROFLOL!! over here!!! Did they REALLY say that? Those are :boxing_smiley: words!

 

Another family who hasn't used credit cards for YEARS....

[StaceyinLA]

>>Right now, our credit score is pretty important (since we're in the process of building/buying a home). So, I can't just cancel my cards.<<

 

Closing accounts does NOT affect your credit, so long as you make your payments timely. In fact, having open credit cards with high limits is worse for your credit when purchasing a home because they know you have the opportunity to create thousands more debt on an open account. Don't let a cc company bully you into keeping an account open by telling you it's bad for your credit. Call the credit bureau and ask about it. I doubt there is a SOUL out there who would give you negative credit points for CLOSING an account to avoid paying higher interest!

[StaceyinLA]

we also have no cc so this isn't an issue, but I wouldn't tolerate a rate change. I'd close, pay off and move on. Cash is SUCH a better alternative!

[LisaKinVA]

>>Right now, our credit score is pretty important (since we're in the process of building/buying a home). So, I can't just cancel my cards.<<

 

Closing accounts does NOT affect your credit, so long as you make your payments timely. In fact, having open credit cards with high limits is worse for your credit when purchasing a home because they know you have the opportunity to create thousands more debt on an open account. Don't let a cc company bully you into keeping an account open by telling you it's bad for your credit. Call the credit bureau and ask about it. I doubt there is a SOUL out there who would give you negative credit points for CLOSING an account to avoid paying higher interest!

 

From everyone we've spoken too, closing your accounts DOES negatively impact your credit score, because it reduces your debt to credit available which is part of the calculus.

 

They want to see people managing their credit.

 

This isn't anything new, because the last time we purchased a home (8 years ago), we went the closing card route and were SHOCKED that our credit score went down because of it.

 

As illogical as it all sounds, it is a factor.

[KS_]

Same here - we have a Visa and Discovercard and use them for convenience and the rewards. I pay off the balances every month, and honestly don't even know what the interest rates are on either of them. . .

[coffeefreak]

I am ROFLOL!! over here!!! Did they REALLY say that? Those are :boxing_smiley: words!

 

 

 

I KNOW!!!(Craig Ferguson voice inserted there). Oh the things they will say!! She also said it affects her too because she has the same CC. I said, "Well, then you should be cutting yours up too." I can't imagine the training sessions these poor CSR had to go through to deal with this situation! For the record, I'm always nice to them, but that doesn't mean I'm not going to say my peace:D

 

The reason it adversely affects my credit rating (according to them), is that 30% of your score depends on how much credit you have open to you that you're not using. If you have no revolving credit, than they show you have no credit available. It looks as if you have "maxed out" your credit. But, as an earlier poster said, you just can't get quick credit. You can still get loans, it just takes manual underwriting. The banks have to look into your whole credit report and see that you're responsible, have no cc and therefore, your score becomes a moot point. Most car dealerships and cc companies only look at your number. The truth of the matter is, if you have enough cash down, the number doesn't matter either. I knew someone who inherited $100,000, had filed for bankruptcy, a low paying job and were still able to get a mortgage on a $300000 house (before sub prime mortgages). Because they put the whole $100,000, the bank was willing to give them the moon. Cash is king with banks and even though the family couldn't technically afford the house, the bank wanted that $100,000. Amazing, isn't it?

[coffeefreak]

From everyone we've spoken too, closing your accounts DOES negatively impact your credit score, because it reduces your debt to credit available which is part of the calculus.

 

They want to see people managing their credit.

 

This isn't anything new, because the last time we purchased a home (8 years ago), we went the closing card route and were SHOCKED that our credit score went down because of it.

 

As illogical as it all sounds, it is a factor.

 

You know what I hope? I hope that someday this changes. You're right Lisa, and the sad thing is, it's logical for the banks to do this because they keep us in bondage! Think about it, they are FORCING people to keep a balance and stay in bondage to them because they will withhold loans to you if you DON'T have debt! It's a conspiracy! What if, one day, the rules changed and the only way you could get a loan is if you had NO CC's? The banks wouldn't make any money because they wouldn't be earning enough interest. No wonder the Bible says if you're in debt you're a slave.

[Blessedfamily]

We had the same mess with our cc from "bank X". It is the same bank that holds my mortgage and we have never been late on anything with anyone or any other negative event.

 

Dh and I "privately" discussed cancelling and going with our other bank, which is wonderful and doesn't do that junk. Dh took care of it.

 

The next week, I pulled up to the drive through of "bank X" to pay my mortgage. When I rolled the window down the teller said hello and I responded. Out of nowhere, DD5 (Smarty pants in my signature line), who was in her carseat in the back shouts, "We closed y'all out on our computer. I bet you wanna give me one of those lollipops now."

 

Talk about embarrassing. (I did speak to Smartypants about courtesy.)

I don't even know what she meant by the lollipop remark and I didn't know she listening to my conversation about cc with dh.

[lynn]

Same here - we have a Visa and Discovercard and use them for convenience and the rewards. I pay off the balances every month, and honestly don't even know what the interest rates are on either of them. . .

 

Yep, same here. We do not carry a balance so I have no idea what interest rate is.

[HRAAB]

I don't know what we'll do. We have two credit cards and never carry a balance on either one. We might cancel one and keep one, for 'just in case'. I was going to ask dh what he thinks, but he's involved in a very important phone call with his brother - about football - which trumps everything else in this house.

 

Janet

[coffeefreak]

We had the same mess with our cc from "bank X". It is the same bank that holds my mortgage and we have never been late on anything with anyone or any other negative event.

 

Dh and I "privately" discussed cancelling and going with our other bank, which is wonderful and doesn't do that junk. Dh took care of it.

 

The next week, I pulled up to the drive through of "bank X" to pay my mortgage. When I rolled the window down the teller said hello and I responded. Out of nowhere, DD5 (Smarty pants in my signature line), who was in her carseat in the back shouts, "We closed y'all out on our computer. I bet you wanna give me one of those lollipops now."

 

Talk about embarrassing. (I did speak to Smartypants about courtesy.)

I don't even know what she meant by the lollipop remark and I didn't know she listening to my conversation about cc with dh.

 

:smilielol5::smilielol5:

 

While we were ranting last night, we told our girls, "Banks are not your friends!" They said, "We know MOM! Can we please go play now?" I think it's safe to say they understand that concept.

[cjzimmer1]

Well I don't keep a balance on my credit cards so the interest rate doesn't really affect me much. I ocassionally shop around so that I have a reasonable interest rate for emergency situations but thankfully in over 15 years of having a credit card I have never paid interest.

[Highereducation]

We also have only one card that we don't carry a balance on.

 

Dh says that credit card companies don't like that, and they have a name for people like us (something along the line of "leeches" or "parasites" or that ilk.)

 

I don't care what they call us, but I do think they've been trying to get back at us lately - we're on the Do Not Call Registry, but apparently our cc company has made our unlisted # available to "carefully screened companies who may have products and services of interest to us."

 

Hmph. Whoever it is calls up, starts in with a spiel, and then hangs up before I can ask to be removed from the list. Dh finally got ahold of someone from the company and asked for an explanation of exactly how her company is related to our cc company. She couldn't answer and hung up. I called the cc company and requested that our name be removed from all of the lists.

 

The next day I got a telemarketing call from Payless shoes ...

 

So much for being on the Do Not Call Registry, huh?

[KIN]

What is this "credit card" of which you speak?

 

None of those in our house

 

No credit cards here either.

[coffeefreak]

Dh says that credit card companies don't like that, and they have a name for people like us (something along the line of "leeches" or "parasites" or that ilk.)

 

 

 

Ummm, isn't that a little like the pot calling the kettle black? Aren't they the parasites? They wouldn't exist without us right? We'll still exist without them. SHHHHH! Don't tell them I said that! They may come for me for spreading the truth!!!!

[Sarah CB]

I don't have a clue what the rates are on our two Visas (one for business, one personal). We use them for sake of convenience, charging everything and paying them off in full each month. This allows us to receive frequent flyer points & cash backs, too. So if it's at all possible, I recommend only using credit cards when you won't have to carry a balance. And definitely don't let anyone bully you into staying with a particular company. Good luck!

 

Same here - no clue what our interest rate is as we pay it off in full every two weeks or so. Dh and I are taking our first ever holiday this year - thanks to the Avion miles I racked up with cc purchases.

 

I like the convenience of a cc - especially when it comes to shopping online.

[Pamela H in Texas]

sorry. We don't use credit cards so I can't really answer your question. If I were you, I'd simply do whatever you please and not let them change your mind.

[Storm Bay]

I voted other. We'll do what we've always done; use our credit card only for purchases that we already have the money for and pay in full each month. We don't pay interest on credit cards. I think I might have done that once in my life. Maybe, but the memory is very vague. One of the things my parents told me that I have followed is to pay your credit card balance in full every month.

 

ETA Our credit card practices are one of the reasons we have an excellent credit rating even though we only had credit cards and no other loans (my scores were very high, and dh's nearly as high--I have more credit cards than he does, but use them wisely) and were able to get the lowest interest rate available for first time homeowners who don't have 20 percent to put down. Sure, it would have been better if we could have paid cash for a house or had that 20 percent, but that's a long, personal story that there's no point in going through here.

 

Also, if you want a high credit rating, use about 1/3 of your limit a month, unless you have an obscene limit. Also, don't spend so much it looks like you might not be able to pay it off as that lowers your credit score. btw, apparently no one has a perfect score.

Edited December 19, 2008 by Karin

[Blessedfamily]

Right now, our credit score is pretty important (since we're in the process of building/buying a home). So, I can't just cancel my cards.

 

 

I'm curious why they're threatening everyone that their credit score will be negatively affected by cancelling a card - why the heck would that be??

I would think that cancelling a card shows financial restraint and should improve your credit rating. What am I missing??

 

[quote name=StaceyinLA;698231

Closing accounts does NOT affect your credit' date=' so long as you make your payments timely. In fact, having open credit cards with high limits is worse for your credit when purchasing a home because they know you have the opportunity to create thousands more debt on an open account. Don't let a cc company bully you into keeping an account open by telling you it's bad for your credit. Call the credit bureau and ask about it. I doubt there is a SOUL out there who would give you negative credit points for CLOSING an account to avoid paying higher interest!

 

From everyone we've spoken too, closing your accounts DOES negatively impact your credit score, because it reduces your debt to credit available which is part of the calculus.

.

 

Paying on time is an important part of a credit score but just a part. Credit utilization is just as important. It reflects what your limits are, versus how much you charge. You don't want to have a high percentage of your credit card limit charged. If you close a card with a zero balance and have debt on another card, your credit utilization goes way up.

 

Also, credit age is a factor, but less important. They average the ages of your credit cards. If you close an old card, your credit age is newer and that's more of a risk.

 

No, it's not good to have too many cc, but "too many" is different for different people and situations. For your credit score, you need a variety of types of credit(installment loans, etc.) and not just a bunch of credit cards.

 

Where you really want to be concerned about too much available credit is from the bank you are apply to for credit. Even if you credit score is good, they may say you have too much available credit for your income. Credit scores do not reflect debt to income, but it's very important to banks and available credit on cards factors into that heavily.

 

Having said all that, you don't want to close out cards right before you get a loan. The reason is your credit score will take a dip, but it's temporary, especially as far as credit age.

 

Good article here :

http://www.bankrate.com/brm/news/cc/20061114_cancel_card_credit_scorea.asp

[Aunty Social]

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