Tuesday, May 5, 2009

Please.....SOMEBODY help me understand

I don't have a degree in finances but to me it seems like a no-brainer. If times are tough and jobs are scarce....WHY would a big bank want to make things TOUGHER on those poor souls who DO still have an income? Seems like they would WANT to keep the money moving....keep customer satisfaction high...get the people who do have an income to actually SPEND some of it. Makes sense to me.


I must have dozed off while taking the class of Life and How to Come Out of It Alive. A lot of what's happening now just plain doesn't make any sense at all. Case in point.

I open up my MasterCard bill and note that the monthly amount due has increased quite a bit. Now I rarely use this card because it has a high balance and I'm trying desperately to pay it off by making double payments. I immediately suspect that fraud has occurred and there have been charges added to this account but that hasn't happened. Instead....much to my dismay....I observe that my interest rate has increased.

Now I realize that everyone is out there to make more money.....to bleed you dry....and I would have accepted a small increase of a couple percentage points with only a little cussing to myself. But they more than doubled my interest rate. Yep....to a whopping 21.4%....an increase of 11%. You can imagine how much it made my monthly payment SOAR. This is a card I've had for 25 years and have NEVER been late on a payment or over-extended my credit limit.

I called them today. I wanted to yell and scream but that does no good at all. After all, the person I'm talking to doesn't make the rules and doesn't own the bank. Bottom line.....I did get my interest lowered 5% so now I'm at 16.4%, which doesn't make me happy but its better than what it was. I just wish I had the money to pay it off and close it but if I could have done that, I would have done it long ago.

So, can anybody help me understand this. WHY....when so many people are hurting....does a bank UP the interest rate so your payments go higher when everyone has to watch every penny right now. I am going to research this and am going to find the right people to contact to get some sort of legislature going that will put a cap on these credit card companies.....that they can no longer just up your interest on a whim. This is just so wrong. Yes, I know. I shouldn't have credit cards. My dad never had them and always chastised me. But some people ..... like me ...just don't have resources to pay cash for needed items. I am helping a disabled daughter and her two kids also. If you keep up your end of the contract and pay your bills on time, they should have no right to raise your interest rates. I can understand late fees and the over-extend-your-credit-line punishment fees and returned check fees....but not this. (putting soap box away now).


Kelly Jene said...

I'm sorry hon. We are going through a sort of similar issue. Our bank was bought out by another bank and we just received notice of what the changes are. Fees for depositing money, taking money out, speaking to a teller, making changes, etc. We were so blown away and so MAD that we are going to change banks after my hubby has been with this bank for over 20 years.

It's overwhelming, unfair and there is zero we can do about it. Except blog... and that's good cuz then we feel a tad bit better.

Boxer said...

I switched my company over to American Express and pay it off every month, so you'd think that would eliminate extra fees. NO! They start charging interest the moment the charge is made, which means by the time I get the statement, interest is already due.

I ripped it up and went back to my old bank card.... then received a letter giving me all of the new charges.


boneman said...

Val, just you keep that soap box handy....for throwing at the clowns, later,
Hopfully a corner will catch them and it'll hurt real bad, too.


you are preaching to the aggravated choir--I know it's just so greedy of them--it's never enough with these big banks..

Florida Sue said...

Your despicable credit card company is jamming you right now before this bill can be passed. Here is the link

House acts to protect credit card users

happyone said...

I think it's criminal how the banks can raise the interest rates like that.

We actually make a few extra dollars with our credit card. We pay ours off each month and they give us 2% back.

Gypsy said...

Wow that seems harsh. In Oz our mortgage interest rates keep going down, down, down. At the moment they are at 3% but unfortunately we won't benefit because we are on a fixed rate. We could change it but we'd have to pay through the nose. We pay 7% which is a HUGE difference on a big loan so we are going to look into it. Also our credit cards give 55 days interest free so as long as you pay off your purchases within that time you don't pay any interest.

All that being said though, it's the sneaky little charges they don't think you notice that build up. It's such a rip off because they make billions of dollars profit every year.

I hope you manage to get it down further Val. These are worrying times.

Dear Liza said...

The times that we live in are screwed all the way up, aren't they?

I have had the exact thing happen to me...and congress has a bill or two on this very subject. However, by the time they get around to doing something about it, everyone will be bankrupt. I suspect that if you get your teeth into them, they just might find a way...you go girl!

Hugs, honey. Thanks so much for everything. :)

SOUL: said...

i can't help you understand it-- cuz it's happening to us too. and not only are they jacking up our interest rates on some cards... one of my cards--- for no reason.. i've never been late-- always pay 3-4 times the amount due every month... but know what they did? they LOWERED my high balance!! they dropped it 100.00 . i was infuriated. i called and chewed them out and explained how i've paid on time, and more than asked, and even how THEY increased my limit--without me asking for it only a few months ago-- only to do this? i told them i was gonna pay it off and close it.
and i will. i have too many cards anyhow. i just have to wait longer than i want to-- cuz we're trying to buy a house soon.. and closing accounts isn't good around that time.. nor is lowered credit limits. ugh--- i just can't win.

but like a few have said-- it's not just you-- they're goin after everybody-- and like jamie said-- it's only gonna hurt the banks in the end-- people will end up bankrupt-- or just plain not payin the banks at all anyhow.

karma baby.

love you

Robbin'sMama said...

I got rate jacked by my credit card, over doubled the interest. I had the opportunity to close it and pay of the balance at the low rate I have had since I got the card. So I closed it. I hear they are going to pass some new laws, but they did not help me.

Anonymous said...

Like you, I am no financial guru, but I do work with mathematics. The increase that they gave you--from 10.4% ot 21.4% is not an increase of 11%, but an increase of 11 percentage points. The increase they levied was 100(11/10.4)=106%. That's enough to make anyone feel indignant. How magnanimus of them to give you a 5 percent point reduction--an actual reduction of 100(5/21.4)=23%.

Any way you cut it, the Obama administration (to their credit) is trying to get something done about it--before Memorial Day.
Cop Car

The Middle Aged Woman said...

I'm just going to make your meatloaf tonight and forget everything.