More Reports of Credit Card Interest Rates Raising Mysteriously

I was sent two articles recently and both were about how some credit card companies are raising their interest rates for no apparent reason. There was some talk about it before, but it appears to be even more widespread.

The biggest culprit? Bank of America.

Bank of America spokeswoman Betty Riess confirms some bank cardholders could be receiving rate increases for reasons other than declines in credit scores, such as running higher balances with their Bank of America cards or with other creditors. She says the increases are part of a “periodic review” that assesses customers’ credit risk.

[Via AOL.com]

Businesses do have a right to make money. But does this sound fair?

The bank [Bank of America] said it planned to raise the interest rate on her credit card from about 13 percent to 24.99 percent. Fishkin, 60, couldn’t figure out what she’d done to incur the higher rate. She had never been late on a credit card payment, just refinanced her home at a lower interest rate and just been rewarded by her credit union with a lower rate on her credit card there, she said.

[Via Star-Telegram.com]

Fishkin tried to get an answer on why her rates were increased but couldn’t find an answer. With $12,000 on her card (due to recently relocating), the additional 11.99% in interest is going to hit hard.

I don’t think I have to elaborate on how upset I would be if my credit card decided to raise my interest rate. I’ve been trying to keep credit lines open to help our credit score right now, but if they raised my interest rate more than a few percentage points, that would be the last straw. I’d complete the paperwork to close the card and pay it off under the current agreement. That generally appears to be an option if this happens to you.

In letters that were seen by or described to The Charlotte Observer, Bank of America told customers that they could lock in their current rates if they requested it in writing and agreed to not use the card and paid down the balance. If they wanted to keep using the card, they’d have to agree to the higher rates.

[Via Star-Telegram.com]

I guess I just don’t get it. If a person has been paying their credit card as agreed at 13% – why raise it to 24.99%? Wouldn’t that make it more difficult for the person to pay the debt and they would be more likely to default? That is a huge change in the interest rate.

Or…are they hoping that those who have been responsible with paying their cards will still pay responsibly with the higher rates?

I’d love to hear your thoughts.

Thanks to Anne and Tracy for sending me links to the articles!

Posted by Tricia on February 19, 2008 at 11:25 PM in Credit Cards | 73 Comments »
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Jen responded:
Posted: February 20th, 2008 at 3:02 am
This happened to me as well – they are raising my rate from 13.49% to 19.99% if I don’t opt-out at the end of the month. To date I have never had a late payment or gone over my credit limit on any of my credit cards and my credit score is in the 700s.

GM Card (owned by HSBC) did this as well – they nearly DOUBLED my APR from 16.99% to 31.49%. The only explanation they could offer was that they conducted a “periodic review” of my account and found that I had a high balance (due to a recent cross-country move) and was paying only a little more than the minimum. So, by following my card agreement and being a good customer, my account went into default. Unfortunately, I’m unable to opt-out of these changes. Hopefully I can pay off/transfer that balance before I get killed by that finance charge.

I understand that the economy is terrible right now and that banks need to make money but there’s a difference between trying to make a profit and robbing your customers.
Michelle responded:
Posted: February 20th, 2008 at 8:24 am
We’ve studied this in detail lately. The best guess? Bank of America’s takeover of Countrywide Lending was to absorb that company and let it go silently bankrupt on BOA’s books. Wouldn’t it make sense (if you were a bank) to secretly raise rates on people to try and make as much cash back to cover their losses? I’m not at all condoning this, but unfortunately too many people don’t pay attention to their statements and simply pay their bills without question. For a reason, my money would go on their assumption that enough people won’t notice and they’ll end up making quite a bit of money without furthering their outstanding receivables.
Michelle responded:
Posted: February 20th, 2008 at 8:26 am
P.S. Thanks for bringing attention to this and trying to get the word out. It makes me so mad to hear about what crooks these companies are…
rj responded:
Posted: February 20th, 2008 at 10:42 am
This is one of the reasons I closed out my account with BOA almost 8 years ago and have never considered going back. They are one of the few banks that have consistently popped up over the years with negagive banking practices. The other banks/cc companies are probably not much better but have been willing to be reasonable in some instances.
Susan responded:
Posted: February 20th, 2008 at 10:45 am
Capital One is doing this too, my rate recently went up and the only stated reason was my existing “low” rate. That finally pushed me into an aggressive plan to pay off balances and get rid of some onerous debt-load. The bottom line is credit card companies are completely capricious, greedy beyond belief and willing to exploit their customers any way they can. Sadly, our laws regulating business only make it easy for them to do this. It’s not a pretty situation–consumer beware!
Kitt responded:
Posted: February 20th, 2008 at 11:20 am
Wells Fargo did this to me last year — jacked my APR up from 12.99% to 19.99% based on absolutly nothing — my FICO is also high and I carry no revolving debt, including on that card — what I do put on it, I pay off as soon as it posts. They don’t need a reason. (If I did carry a balance, I would have complained a lot louder; as it is, I’m just slightly disgusted.)
Matt responded:
Posted: February 20th, 2008 at 1:47 pm
That’s a pretty big jump – that would most definitely annoy me. I’m sure there are other institutions out there that would be happy to take my business and carry my debt.

I’m still in shock reading that jump – that’s almost doubling the rate. Can you imagine if one day for no reason the cost of gas just doubled at one chain only? They’d be out of business in no time – but because in general people aren’t financially savvy the banks can get away with it.
delilah responded:
Posted: February 20th, 2008 at 2:05 pm
As soon as I read this post, I called BOA to check my interest rate. BOA bought MBNA, the originator of my credit card back in 1998, about a year ago. My interest rate remains 13.9 percent, I had to do some serious brow beating to get them to lower it to this point about 7 months ago.

I thought credit cards set their rates not only on customer’s rating but also the federal interest rate, which fed chief Bernake has been cutting for months now. So, it’s cheaper for BOA to get money for the bank, but they are making money more expensive for consumers.

That’s not playing nice, but then again, they’re a credit card company, they don’t know how to play nice.
Jen responded:
Posted: February 20th, 2008 at 2:13 pm
Interest rates are set by the Fed. but one way that credit card companies calculate interest is through the prime rate (set by the Fed) PLUS some other rate. BOA (and in my case, HSBC, for others, Capital One) is raising the other rate that they charge. So, for example, instead of my rate being prime plus 7.9% it’s now going to be prime plus 15% (or something, I don’t have the numbers in front of me now).

You’re right – they DON’T know how to play nice. They are evil.
Wes responded:
Posted: February 20th, 2008 at 3:28 pm
>With $12,000 on her card (due to recently relocating), the additional 11.99% in interest is going to hit hard.

Wow, the understatement of the day. How about “the 12,000 on her card now amounts to indentured servitude to BofA”?

This is just the banks looking for a profit center to make up for their stupidity in the mortgage market. They’ll milk everyone they legally can, and unfortunately with all the rules thrown out by the last 30 years of congress they bought with campaign donations, there’s not much they legally can’t do.

But a 12% increase. Yoysa! That kind of hit on their brand when people start complaining to their friends can only mean to me they expect the dem administration in jan 2009 to re-inact some real consumer protection rules and they better gouge while they can.
Wes responded:
Posted: February 20th, 2008 at 3:36 pm
Jen on note one. Call you congressman, your senator, both… really, I’m serious. That’s ridiculous. I saw a congressional hearing about a year ago randomly changing channels and they were really putting the cc companies on the hot seat about extra fees and other techniques they use to ensure people pay WAY more than they ever borrowed and then still have the same balance on the card. They don’t have enough majority to make new rules but they may very soon.

Really, please do it. Ask them if they’d like you to write it up in a nice letter, with dates and photocopies. (I did a senate peon gig for 6 months, so this isn’t just a random suggestion). They carefully file cases of their constituents like that so they can hit those guys in a hearing. And there will be banking hearings…oh will there ever be… lots of them.
Mike responded:
Posted: February 20th, 2008 at 5:00 pm
Some people caught by this I feel sorry for.. others not quite so much…

I do feel that banks should be allowed to raise rates, but only based on hard facts:

* Interest rates should be set by contract on the card agreement to prime + x, where x can be determined by credit score, total outstanding credit, payment habits, etc. That amount x should be easy to understand and follow for consumers. Should the bank want to rescale this percentage (x) independent of credit score, outstanding credit, etc, they should be forced to notify consumers and give an opt out, where that x remains fixed based on the old table but further purchases are not allowed on the card.

You see, some people will have good credit and qualify for good rates but take out half a dozen cards, rack up a ton of debt, and then become a risk. Their first card at 12% may suddenly be undercharging for their debt/income ratio. The bank entered into the contract with someone with a 780 fico score and now they’re 700, even though they’re current on all loans. You’ve changed your creditworthiness, and the bank should be allowed to adjust.

But if *nothing* has changed with your fico, your debt/income ratio, etc, then all prior purchases should be charged the same prime + x as before….

It’s easy to see that banks are screwing customers, but customers are often screwing banks as well. You may think you’re still a good customer, but from what limited data the banks get, you may suddenly look riskier.

An alternative would be simply to set maximum interest rates by law (at prime + y). However, under such circumstances, be prepared for credit card companys to get much more strict about how much credit they’ll extend to people….
boomie responded:
Posted: February 20th, 2008 at 6:10 pm
From reading this post and comments it may be more prudent to make the change now and just pay off your credit card debt and call it a day. It sounds like a losing proposition to have credit cards at this time.
cbinsa responded:
Posted: February 20th, 2008 at 6:31 pm
Last week I found that I missed my BoA due date by five days. This is the first late payment in over 18 months. The result? My rate went up from 9.9% to 31.49% I was told that if I paid on time for the next 6 months they would lower it back to 9.9% Because of the large balance I have this account the increase will result in an effective $1,500 “penalty” for being a couple days late. I refuse to accept this and will be making some changes.
Mr. Debtbeater responded:
Posted: February 21st, 2008 at 1:12 am
I recently wrote about examining your credit card rates often because of the fact that I got hammered with a ton of rate increases unexpectedly after having no late payments across the board.

Turns out that I’d recently talk to the bank about refinancing with a doing a credit check…then a bunch of my cards raised my available balances, then one raised my rates a ton, then the rest started following suit. (except the one with my military credit union account)

It’s amazing how just a sneeze in the wrong direction can completely set you back for the year. Kick us while we’re down!
Looking for People to Interview » Blogging Away Debt responded:
Posted: February 21st, 2008 at 5:10 pm
[...] Mr. Debtbeater: I recently wrote about examining your credit card rates often… [...]
debtdieter responded:
Posted: February 21st, 2008 at 7:37 pm
It’s interesting, I’ve noticed my cards going up steadily over the last 12 months here in Australia, but no big jumps like that though.
Reg-C responded:
Posted: February 22nd, 2008 at 2:14 pm
I currently work for a financial institution that issues credit cards. We are one of the few that don’t participate in the “universal default” practice when dealing with our members accounts but did recently go through a “change in terms” as described in this post. When our members qualified for an account they are given an APR based on thier current credit / income qualifications. Over time their accounts are reviewed and as they qualified for better rates their accounts were adjusted in the members favor, however we were VERY liberal and only raised a members rate if they were late for more than 60 days. The increase was only for 3 months and would revert back to the lower rate after they were current.

NOW, with the increase in the amount of defaults in the credit industry our bank has decided to make some adjustments. For members who paid on time…nothing changes, they keep the lower rate whether they currently qualify or not. BUT…if they have been late in the last 12 months the member is given a rate based on their CURRENT qualifications or offered the opportunity to “OPT-OUT” and pay it off at the current rate, thus closing the account.

Basically ….pay as agreed and things are fine. I agree that there is too much “arbitrary” changes being made in the industry. Consumers need to protect themselves by calling thier issuer and finding out what circumstances can trigger a rate increase. ***Remember that it’s OUR reponsibility as consumers to handle our accounts like adults and THEN we can go after the card industry when they act like spoiled, greedy, insolent, CHILDREN.

KNOW WHAT to EXPECT and make decisions based on this knowledge. There are some SNAKES out there!!!
Ryan Healy responded:
Posted: February 22nd, 2008 at 6:12 pm
This happened to me with MBNA/Bank of America. I wrote about it in a post on my blog titled “What Sparked My War on Debt.” Click my name to read that particular post.
Rick Vaughn responded:
Posted: February 22nd, 2008 at 8:00 pm
Glad to see alot of my fellow Bank of America fans in this blog. Being a customer of BOA’s for a few years now has opened my eyes so much I’m considering switching banks which is really the only way I can hurt them. Interesting with the purchase of Countrywide this all goes down!
Wes responded:
Posted: February 22nd, 2008 at 9:14 pm
Reg-C,

There are responsible practices that keep a bank honest to its shareholders and then there is usury. Five days late for one payment does not equal triple the risk. Raising rates on someone by 12% increases the risk of a total default, which if that’s a reasonable outcome for the bank to strive for, only indicates that the bankruptcy law changes were an even bigger mistake than they seemed at the outset. Funny how we didn’t see this kind of thing happening, at this level, previous to the change in the laws. The banks spent a few hundred thousand bribing, oops, I mean making campaign contributions to, the politicians and this is where we are now.

Banks continue to prove how very sloppy they are with strict regulations removed.
Prosper Roundup — Prosper Days Edition responded:
Posted: February 24th, 2008 at 11:09 am
[...] Blogging Away Debt tells us of More Reports of Credit Card Interest Rates Raising Mysteriously. [...]
Gift Credit Cards » More Reports of Credit Card Interest Rates Raising Mysteriously responded:
Posted: March 6th, 2008 at 3:47 pm
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Credit Cards on The Finance World For News and Information Around The World On Finance » More Reports of Credit Card Interest Rates Raising Mysteriously responded:
Posted: March 18th, 2008 at 11:18 am
[...] More Reports of Credit Card Interest Rates Raising Mysteriously I was sent two articles recently and both were about how some credit card companies are raising their interest rates for no apparent reason. There was some talk about it before, but it appears to be even more widespread. … [...]
simon responded:
Posted: March 18th, 2008 at 1:03 pm
According to many experts on the card industry, the credit card issuers are misleading consumers and making up their own rules as they go. They advertise with cute commercials, offer a very low introductory rate, and hire the finest minds to figure out a way to trap you in the fine print. The real problem lies in the fact that the industry is basically unregulated with no over site committees around. Lets go a little deeper and expose some things.

http://www.creditsnote.com
Ellen responded:
Posted: March 19th, 2008 at 8:17 pm
I would like to confirm that WaMu raised our rate from 11% to 21.9% after a period credit review. We have always paid our account on time. And we were shocked! They said it was due to a “periodic credit review”. Since a lot of this seems to be going around – any suggestions?
disgusted in florida responded:
Posted: March 24th, 2008 at 11:25 am
I think its totally unfair and just greedy that they raise interest rates if you are paying your ccards on time. Actually, it’s really none of their business how you pay other things, as long as you are current with them. I find it highly offensive that a creditor can look at my financial life to base their decision, actually it should be illegal for them to go in randomly for any reason. With all this country is going thru, this is only going to make it worse. I have just closed 3 credit cards, because they all raised my interest rates trememdously, I have always made my payments on time, I have two left, and I’m sure in time they will also raise my interest rates.
disgusted in florida responded:
Posted: March 24th, 2008 at 11:26 am
Oh yeah……Wells Fargo Financial and JP MOrgan Chase.
Bob responded:
Posted: March 26th, 2008 at 4:59 pm
WaMu just did the same thing to me. They hiked my rate from 9.99% to 19.99% based on their “periodic credit review”. I have never been late on any payments with any creditors and have always paid much more than minimums on all of my accounts. My credit score has gone up 20 points this year. I took the option to close the account to retain the lower rate. There really wasn’t any other choice! I had arranged automatic payments from my checking account, and got out of the habit of reviewing the paper bill. I was lucky that I decided to review this one. A word of advice, inspect EVERY bill closely.
Jeff Pell responded:
Posted: March 28th, 2008 at 10:14 pm
Around 03/01/08, Wells Fargo Financial Bank increased my credit limit by $2250 without my even requesting it. I’m sure that this is because I ALWAYS pay my bills on time and have brought my balance down in the past few months. Less than 3 weeks later they send me a letter stating that my APR will be going up by about 2 points. They claim this was due to my Trans Union credit report and my history with them. Luckily, 2 hours earlier I was approved for a 0% balance transfer Visa Card from my bank.I went to my local office and was told that I needed to call customer service,and they told me that the letters were sent out ‘across the board’.
I called customer service and told them that I could pay off the balance if the rate was not reduced to a reasonable rate, and was told that due to my ‘credit obligations’ they could not lower my rates. I assured them that my obligations had decreased since they raised my limit 3 weeks ago, and was I told that I needed to check my Trans Union report.
I checked it several hours later, and there were no new or incorrect debts, so I called W.F. back and spoke to a different customer service rep
who finally admit that it was a business decision to raise rates and there was nothing that she or even a manager could do.
Anyway, I guess you’ve figured out that I’ll just transfer the balance (maybe leave a few dollars on it) and write this greedy company back explaining why.
Anybody with a similar situation?
Jeff
Aze responded:
Posted: March 28th, 2008 at 11:15 pm
NEWS : i received a letter too and my rate was to be increased from 14% to 21%. My credit score is 755 and i m not even close to reaching half of my credit limit to any of my cards. btw i only use 2 and hav abt 2k of debt. This is really about banks try to keep their profits up. This in return will screw and force more bankruptcys. I m just puzzeled as to our great democratic govt. isnt doing anything about it… jus cant believe this.
Cathy responded:
Posted: April 1st, 2008 at 9:13 pm
I received my letter from Wells Fargo Financial yesterday that they are increasing my interest rate by 3%. I have never heard of “risk-based pricing” unitl I received their notice informing me that I am now considered a risk. They used the same credit report to approve my credit card as they did to determine that I was a risk. They didn’t deem me a risk when they used that same credit report to approve my application for their credit card, nor was I deemed a risk when they increased my credit line. I’m a risk now because I have too much credit according to the customer service rep I talked to at Wells Fargo. I recently looked into refinancing my home which apparantly was held against me, my credit couldn’t be too bad since I was approved for a loan at 5.35% interest could it?

I suggested to the customer service rep that maybe they were raising interest rates because their rates are based on the prime interest rate and since it was so low Wells Fargo was losing so much money that they had to make it up somewhere. After all, I’ve never been late with a payment and I always pay more than the minimum payment. She assured me that this was not the case, that they recently reviewed all their customers credit reports, some customers interest rates actually went down as a result of their credit report. I did go on to express my feelings on their practices which I think is very unfair, which got me no where.

I have done a lot of research since yesterday and it seems to me that this is just a legal form of loan-sharking and rape, the credit card companies can charge you any interest rate they want to, and the American people just have to accept it.

The Senate and Congress is aware of what is going on, hearings were held last year but nothing ever came from them to help the consumer. There is a bill in the House that is supposed to address credit card companies again (I’m not sure how it reads) but I urge everyone to contact your Senator, Congressman, call the FTC and the Federal Office of the Controller and file a complaint-thats what I did today, let your voice be heard. A lot of people do not know that this is going on, even the aide to my Congressman didn’t know about it, I got to educate him on it.

I did transfer my Wells Fargo balance to a credit card with a low transfer APR until the transfer balance is paid off and I intend to pay it off soon and this company does not participate in risk-based pricing, they use only your payment history with them to determine if your APR increases.

If every customer of Wells Fargo, Bank of America, and all the other blood sucking credit card companies out there would start complaing to the right people and stop doing business with them, maybe these companies would stop their sorry business practices.
Emmi responded:
Posted: April 7th, 2008 at 3:49 pm
Right on, Cathy. If regulation is non-existent then the power of the purse is the only thing left (well, aside from civil disobedience, but we are all too busy making ends meet to get around to that, it seems). Take your business elsewhere, a credit union for example (which the banks have worked very hard over the years to get shut down, which recommends them highly, in my view.) There are also some new players out there eager to please because they are relative newcomers, like ING and other online-only banks and State Farm and other insurance companies (I don’t work for any of these, just using them to out that the field is broader than it used to be, the one upside of deregulation).
Gloria responded:
Posted: April 11th, 2008 at 7:21 am
My Bank of America credit card rate has decreased 1% since December 2007. Can’t remember the last time I used it. Actually, did not activate the new card they sent last year. Have been paying more than minimum. The past two months, the minimum due was $15, although the current due was over $200. They really want me to stop paying so much. I am surprised they lowered the APR.
Kevin responded:
Posted: April 11th, 2008 at 10:45 am
Hello all. I would like to share with you my story. I have right now three credit card accounts. Two with Capital One and one with HSBC credit card. I have had them for seven years. I have never been late or late in paying my bills in all my years of being with them. I paid my bill on time and sometime paid more then what I was asked to pay. I also am someone who has received these same letters from both them telling me that they were going to change my interest rate from 12 to 24.99. When calling both these credit card companies they gave me no reason to the reason why they were raising my interest rate. I asked them why they are doing this to me and raising my interest rate when I was never late or behind on my bills to them ever since I have had them and been with them in these seven years I had these three cards. The only thing they told me is that it was that the head people of these banks that have chosen to raise interest rate on everyone that has account with them. I told them this was unfair and feel that they are just being greedy, selfish and robbing us all of our hard money we all make. After getting off the phone with them and when I was on the phone with both these companies. I told them that I do not want these cards any longer or agree with these changes or agree with them and will not and refuses to pay a higher interest rate after I been with them for many years and never was late or behind. What you all have to do and must do is. Write them all a simple letter that state you disagree with this change and refuses to pay this high interest rate that they all want to charge you on your accounts. You also must tell them that you want your account closed with them. What people are now getting told is wrong by these lenders. It is said if you close an account then it will lower your score with the credit reporting companies. This statement is false. All these Credit card lenders do this lie to try to use this lie to scare you and keep you in trapped in their company or to try to keeping you as their costumer to them. The other lie they will tell you is and what they will tell you if you close your account with them and make your payments to them that they will charge you a service fee of three or more dollars to process your payments you make to them on time. This is also a lie and if they tell you this after you been a good costumer to them or any of you our told this. You must file a federal complaint with the costumer protective league in D.C and report all these statements that they tell you to scare you into keeping their cards. They are clearly violating and going against the law and the fair credit reporting act. The only way to stop these companies from doing these things to us is to report them and get the word out like we all are doing. I hope this help you all with this issue. May God bless you all.
Lori Conners responded:
Posted: July 30th, 2008 at 4:53 pm
Advanta Bank recently raised my rate to 34.99% for no reason whatsoever. They just felt like it. I have perfect credit have paid my business credit card on time or early for the past 8 years that I have been in business that now it is all of the sudden 34.99%.
Nina GAss responded:
Posted: August 4th, 2008 at 3:41 pm
Yes, Lori, Advanta just did it to me too. I had to shut my business down but always had perfect credit and this is when i needed the rate to remain low so that I could keep making my payments like an honest hardworking person and they just don’t care. It’s like they want people to go to a credit counselor and then receive pennies on the dollar while we face the possible destruction of our credit scores! It’s sickening.
James responded:
Posted: August 13th, 2008 at 10:04 pm
HSBC just sent me a notice telling me they were raising my rate from 16.99 to 31.99% as of Nov. 1st, 2008. Clearly it must be a “business” reason because I’ve never been late or went over my limit. I had seen recently on the “Today” show that card companies can raise rates for no reason, and as shocked as I was in hearing that, didn’t believe it until I got my HSBC notice a few days ago. I mean, nearly DOUBLING my rate? Come on! That’s out and out robbery, no matter how you slice the pie. OK, HSBC, I got your drift — now I’m going to drop you as my card issuer. I agree, everyone who experiences this should write their CongressPerson. How many people would stand for, say, grocery shopping for a $3.99 jar of peanut butter, seeing it labeled on the shelf for that amount, then taking it to the check-out stand only to have the cashier tell you it’s now going to cost $7.99? Sheeesh!
Carla responded:
Posted: August 25th, 2008 at 4:41 pm
We just experienced the same thing with Advanta. The interest rate went from 7.99% last month to 20.39% this month. We’ve never had a late payment with them or anyone else, always paid on time, rarely made minimum payments (usually more). There have been no changes in our debt/income ratio, no late utility payments, etc. Nothing has changed on our end. We talked to three levels of customer service, and no one could tell us exactly why this happened to us specifically.
So we promptly paid off our balance and closed the account. We suspect they hope enough people do just that – liquidate, because they need the money; their stock is in trouble.
Perrin responded:
Posted: August 26th, 2008 at 11:49 am
Nina and Carla, the same exact thing happened to me with Advanta. Literally, the same story. No late payments anywhere, excellent credit, nearly always paid the balance in full each month. I used to tout this card to everyone that would listen, too. But what I don’t get is, the is a BUSINESS card. I didn’t have that high of a balance, but promptly went to my credit union and got a loan at a low interest rate and paid it off after an infuriating conversation with customer support. But, because the interest rate was so low, I have a friend who uses it exclusively for business purchase, with a balance of 18K. This jump happens with no notice, i.e., the letter I got last week said it would take affect in Sept! This will really hurt small businesspeople that used this card heavily for business expenses.
npep responded:
Posted: September 3rd, 2008 at 1:29 pm
I run a small business and this just happened on our 2 corporate cards. I and the business have a great credit rating and have never missed or been late on a payment. Our Advanta card went from 7.99% to 20.99% and our Chase Visa went from 15% to 20%. To opt out we have to cancel the card and agree to pay under the old terms.
Swaize responded:
Posted: September 9th, 2008 at 9:44 am
HSBC has just included in their September statement the Notice in Change in Terms. They are raising the interest from 13.99% to 21.99 percent on purchases (cash advances to 28.99%) to remain “profitable” they indicate in the notice. I just read an artical that HSBC is one of the 5 most profitable banks in the world.
What the whole issue and problem is that the government has allowed the existing USARY laws to remain un-enforced, thus resulting in these unjustified increases in rates and charges. It is LEGAL loan sharking. The get you stuck with a debt they know you can not immediately pay off, and increase your expenses to keep the debt long into the future assuring cash flow. They even organize the due dates on holidays and weekends, knowing it will be harder to pay at those times, resulting in more fees.
jody responded:
Posted: September 22nd, 2008 at 10:11 pm
and I quote from Citibank when I inquired via email today about my 6% interest rate hike (and I have 4 cards with them but this is the one I have ahd the longest:

We received your request regarding the Annual Percentage Rate (APR) on your account.

We periodically review our pricing policies and adjust account terms to offset changes in the cost of doing business.

The change in account terms was not caused by your account performance. The change is a result of a review of our pricing policies and is based on our increased cost of doing business.

Changing the APR may also cause other terms to change on your account. Please call us to discuss the terms that would best meet your needs.

Thank you for using our website.
Jason responded:
Posted: September 24th, 2008 at 3:28 pm
Wow am I in the same boat. Advanta credit card. I just opened it and went from 9.99% to 25.08% That is more then double! I could see if it went to 11.99 or something but geezus! Now I see how this economy is out of money and its not affecting all the small fries.

Anyway same story as everyone else. Payments on time, paid more then I’m suppose to, my financial situation has not changed. If they would have done this for all new purchases fine, but not for what you were at previously before this change.

I have a 14.5k balance on this business card. THAT HURTS! Time to go elsewhere.
Jen responded:
Posted: September 26th, 2008 at 10:27 pm
Thought I should just post an update – a few months ago HSBC doubled the rate on my GM Card. I called this week and asked for a rate reduction and they took it back down to 15.99%. No questions asked, I didn’t have to speak to a supervisor. I still vow to never use this card and have an intense hate for HSBC but am glad that they were able to drop my rate back down. I’m still bitter about the fact that I ended up giving them so much extra money in interest payments.
Lisa responded:
Posted: November 30th, 2008 at 10:42 am
When MBNA raised my rate a few years ago, and would not lower it, I took out a personal loan at a lower rate, paid it off, closed the account, and have not done business with MBNA since (or future).

Recently American Express raised my rate from 7.99% fixed to 10.99%, Citibank from 8.99% to 16.99% (!!!). Mind you I’ve never been late on a payment, use the cards regularly and have an excellent credit score.

Fortunately I owe little on the Citibank, and will have the Am Exp paid off shortly. I will not cancel the cards at this time, since that would adversely affect my credit score. Not everyone with outstanding balances are able to do the same, but these companies certainly won’t get another penny in interest out of me.
Laurie responded:
Posted: January 19th, 2009 at 11:29 am
I received a letter from Discover ( I have 2 cards 1 w/a limit $4800 and 1 with a $500, the letter was for the higher card and told me that they were raisung the rate from V+Prime + 4.74% to V+Prime + 12.99% or something like that as I can’t seem to find the letter. My husband and I are unemployed and are barely able to pay our bills. We have had to get food stamps and medicaide for our children. If the company wants to keep getting their payments they shouldn’t make interest higher as that will make it harder for them to get their money in the long run.
Paul responded:
Posted: January 25th, 2009 at 11:24 am
Both my Bank OF America and AT & T Universal Cards nearly doubled the interest rate in the last 4 months. Both said they sent me an opt-out letter which i don’t recall seeing. Despite a perfect payment record and a very good credit score, BOTH companies are requiring me to lock in the old rate by agreeing NOT to use the credit card anymore. The goverment needs to step in and STOP this from happening.
Jody responded:
Posted: January 25th, 2009 at 11:18 pm
I posted in September that Citibank raised my rates. At that time I called to cancel and they said there was nothing they could do. I called to cancel and after some time wasted they gave me a 6 month 2.99% intro rate after which it goes to something stupid like 16% or so. I have never been late. Granted I am like everyone else and have more debt that I probably should but it’s been manageable. Unfortunately with higher interest, the payments go up and you are at risk of default.
At the time I asked if any of my other accounts with them were scheduled for an increase – she told me no. Now imagine my surprise when this month I looked at one of my bills and saw my interest went from 7.99 to 16.99% I emailed and they claim they sent me a letter in November. I too have never seen it. I accused them of fraud, etc and said I do NOT agree to these changed, I want my rate back and they can close my account. I will gladly pay it off (in payments of course but at the lower rate). I guess at this point I don’t care if my credit gets hurt. Things are so bad everywhere that I’ll default on all my cards and go bankrupt before I lose my house. If they can’t play nice in the sandbox then I am throwing my sand out of the sandbox and having a fit and going home to sulk. ha! WTF – things are so bad that I don’t feel bad for companies who are getting BILLIONS of dollars because they are hurting while the rest of us get jack and have pay for those companies who tell us to bend over.
ashley responded:
Posted: February 8th, 2009 at 10:30 am
I have experienced the same situation with Chase. I did get the letter and had no option but to close the accounts (which doesn’t look good for my credit score) I have always paid on time and have an excellent credit score. I have actually not even used the cards for over 3 years. It is fraud in my opinion. Chase is a very dishonest company. It is very disappointing considering I have done business with them for the past 18 years!
Susan responded:
Posted: February 12th, 2009 at 5:59 pm
This happened to me as well. I had a 750 score. I had never been late, always paid way more than minimum. We are in the waterproofing business and had a couple of years of drought, and had to use the cards more than usual. The credit card companies raised our credit line, then when we got close, but not to, the new limit, LOWERED the limit and raised the rate!
They don’t do it because they think you’re a higher risk. They do it to you because they know that consumers who always pay their bills are least likely to default. They also started lowering limits when they got into financial trouble. The problem is, when they lower your limit, it appears as a negative on your credit score. Now, I, who have never missed a payment, have a 620 score because of what they did!
Every consumer should watch the DVD documentary “Maxed Out”. It explains how card companies actually shredded or put payments in a drawer until they were late so they could charge the higher fees.
It’s a darn shame that these same companies are holding out their hand for our tax dollars while they are stealing out of our pockets with the higher interest rates. They raise the rate, which in turn means less of the payment goes to pay off the balance. Then you, the consumer that faithfully pays, are indebted to them forever.
We should have an intense campaign to lobby Congress and the President to make them lower those rates on previous balances.
One woman has a site, Bring Them To Their Knees, http://bringthemtotheirknees.vpweb.com/calling for no payments at all in April, which would cripple the card companies.
Something must be done to help the consumer, not the banks. No wonder the country is in crisis. These greedy banks are robbing us!
Susan responded:
Posted: February 12th, 2009 at 6:12 pm
Oh, yeah. When they close your account because you don’t want to accept the new rate, it will result in a lower credit score. The more open credit you have, the higher the score. Close an account, lower your score. Also, they will cite “too many inquiries” often as a reason to raise your rate. Those “inquiries” are usually only the banks themselves. Why should we be penalized because they decided to look at our credit history?
Carmen Talbert responded:
Posted: February 23rd, 2009 at 7:42 pm
My husband and I have two seperate Capital One credit cards with a credit line under a thousand dollars. We have not been late on our payments, and have repeatedly paid off the balances. Our APR is 15%. Today we recieved a letter in the mail stating that our apr was being raised to 29.95% WOW!!!! I don’t know the reason why this is happening. We do have the right to decline this apr raise but then our account will be closed and we will lhave to pay off the balance. How can these companies do this at a time when everyone is hurting financially? THIS IS CRAZY and should be illegal to do so! We do everything we can to maintain our credit score, and yet these companies can do this at their discresion. They need to be stopped!
Nirvi responded:
Posted: March 5th, 2009 at 4:02 pm
Hello there. I’m writing about the issues many of your are discussing here for a story for The Miami Herald. I’m curious if any of you live in South Florida and would consider speaking with me?

Thank you.
trish responded:
Posted: March 30th, 2009 at 3:38 pm
We just got a letter today. I say everyone should stop using credit cards,go to a credit union they have low rates,as low as 3.5% And may the credit card companies go under, and not take up any more of our tax dollars!!!!! Who needs them with those HIGH RATES!!!!!!!!
iggy responded:
Posted: April 7th, 2009 at 8:17 pm
BOA strikes again!! I paid off two mortgages, have investments, banked with for over 18 years, and have two credit cards with them, always pay ontime, no less than double the minimum payment, and they just raised one of my cards that was at 6.9 to 22.65!! This is total BS!! May they rot in hell!!
davz responded:
Posted: April 9th, 2009 at 3:57 pm
Happened to me today as well 4/9/09. B of A. as others have mentioned I have had ZERO late payment on any bills in over 5 years. 3100 balance at B of A. I called 2 different US representives and the White House and complained Chris Dodd Carl Levin and The white house . Who knows maybe everyone should call.
Jill De Lany responded:
Posted: April 15th, 2009 at 6:22 pm
Same as everyone above. Mine was raised from 7.9 fixed to 13.50 Adjustable. . . I called.
Asked very simply: “How do you determine WHO to raise.?”
Supervisor told me – 10 million got increase or opt out letters.
I repeated my question. And, she said anyone who’s Interest Rate was under 10 % got the letter. . . .10 million vauled Visa customers.
She also told me – I could opt out, but you know she said . ..not good for your credit rating.
Jason responded:
Posted: April 15th, 2009 at 9:11 pm
I’m pretty much at my end with this…. I’m gona keep my mortgage payment strong. Everyone else can eat my debt after I declare bankruptcy.
Jennifer responded:
Posted: April 16th, 2009 at 2:32 pm
Bank of America seems to be on a roll with this. My previous interest rate of 8.9% was recently raised to 21%. I too have never missed a payment with them
or any of my other credit cards, and have always had my payments on time. I opted out of the increase
(at about $7000 in debt with them after going through divorce procedures) it would have been financially impossible to make the minimums, let alone pay down the debt anytime before the next century… I’ve been a customer of BoA for over 10 years! And the customer service agent I spoke to on the phone lied and said the letter went out to EVERYONE, which now I’m finding out isn’t true. The funny thing is, another agent, when I was inquiring last month about a balance transfer, lied and told me I was going to be up for a promotional 0% balance transfer rate BECAUSE of my good credit with the company. Good thing I didn’t transfer any other balances to them!
Ouida responded:
Posted: April 21st, 2009 at 8:23 am
I have a Bank of America card and my interest went from 8.9% to 24.99% after their so called review. So my reponse was to call then and refuse the changes. I will continue to pay off the card at the 8.9% interest and never have anything to do with Bank of America again. The same thing happened to a friend of mine and she could not pay them off until she got a lump sum payment to give them when she was laid off. i intend to call them today to totally close out the credit card so that no charges can be charged to it anytime in the future as they say if anything is charged the whole balance will go to 24.99% and they want to keep the card open so that somehow a slip up could occur and they have you then for the whole balance. I want it closed out or number changed so that no charge could be applied as I would be the only one to know the number.
Jaci responded:
Posted: June 3rd, 2009 at 9:44 pm
Is it legal for the bank (Hells Fargo…I mean Wells Fargo) to change my payment due date on a visa?! My payment is always due on the 4th of the month & I always make online payments on the 2nd or 3rd with no problems with it posting on time. Today (June 3rd) I get online & see that I have a late fee charged to me on 06/02/09. I couldn’t figure out why until I noticed that my due date NOW says 06/02/09 instead of 6/04/09 (the 4th of every month like it has always been). I really can’t see how the heck this is legal.
Rosie responded:
Posted: June 6th, 2009 at 7:59 pm
I just had JCPenny Mastercard raise my rate from 14% to 28%. OUCH! I have been a great customer for 10 years-always making double payments even when they said I could take a payment vacation. Crooks! Never again with CHASE either. They did the same thing to me with their promotional “lifetime” offer of 8% interest rate that I received off the Amazon website. I am so stinking mad I feel like my heart is coming out of my chest. These credit card companies are stealing our money. Their interest is so high that I can’t get past the high balance. Then they assess fees for over the limit status. I can’t win for losing! Are there any lawyers out there who can help with this corruption.
Linda responded:
Posted: June 9th, 2009 at 9:15 am
I had the same thing happen. Bank of america sent a change of terms notification and I called and was offered to keep my low rate if I didnt charge anymore. And also Citibank did the same thing but I only was given 1 option for 6 months at 12.9%apr then it is going up to 19%. I questioned why and was told because of the economy and everyone is doing it. I believe that the banks are trying to recoup their losses and get it from people who are paying their bills on time. As I am writing this my balances are being transfered to a credit union who has guaranteed not to raise the interest rate.
Nancy responded:
Posted: June 13th, 2009 at 6:51 pm
I’ve received letters from BOA and whatever cc co. Sears uses that they were cancelling my cards – cards I haven’t used for years. We still have 2 or three other BOA cards that my husband got when they were MBNA and we haven’t heard a word about them. The reasons were either: a review of our credit report OR a periodic review of their business practices, OR the fact that we haven’t used the card, etc. Take your choice; they’ve all just capriciously decided to chop heads/increase rates and there is no reason. I’ve only received two rate increases, one minor, from Chase Amazon, but as someone above said it was 8% guaranteed when it was offered 2 years ago and now will be around 13. I feel for anyone who has real debt on their cards or is a small business person who must have a credit card. I only use a credit card to make online purchases. The Credit Card bill is next to worthless. They must think we’re total morons. It does nothing to throw a line to people newly drowning in finance charges engineered by the very companies our tax dollars are keeping alive. It’s an outrage. They couldn’t even find the gumption to cap the rates at 34%! – it couldn’t be clearer who Congress really represents.
Jan responded:
Posted: August 3rd, 2009 at 2:59 pm
Beware of closing your accounts unless you can pay it off in one lump sum. I closed a Citibank account and was paying them off in payments as agreed upon. They raised my interest rate from 12.9% to 29.9%. I called them to complain and they told me that it was considered ‘active’ even though I had closed it because I was making payments on it. Therefore they could raise the rate to the maximum allowed. I guess I should be thankful it was not to the full 32%!! IMO ALL credit card companies are legalized THIEVES!! With the new laws going into effect Aug. 20th and in Jan. they are ALL raising their rates and fees now so they don’t have to follow the law about having to notify the consumer 60 days before they raise the rates. They are going to end up bankrupting us all!
G. Griffin responded:
Posted: August 16th, 2009 at 5:37 pm
WE NEED A CLASS ACTION SUIT AGAINST CREDIT CARD COMPANIES for DEFERMATION of CHARATER
• Pinging the credit reporting agencies – alone lowers the credit score.
• Raising interest rates (the amount they did) flags us as a RISKY customers
• Raising interest, increases monthly minimums – again changing net to worth ratios
• Lowering our credit limits shows us as Credit Risk.
• Domino affect, one credit card company makes you a risk therefore other card companies follow suit.

Basically – we are screwed no matter what we do.
• If we pay the credit card companies off, and close the account, we get a ding on our Credit Score up to 30%.
• If you keep the card open and not use it, those that have yearly fees, have to pay that.
• We cannot control when they ping the credit report so we are screwed there.
• A credit report score tells the business world what kind of person you are. If you are not a risk, you have many doors open to you, and you feel good about yourself and your accomplishments in life.
• A credit score allows banks to determine if they will lend to you, to open a small business, if that is what you want to do.
• Employers look at credit scored to determine if you are a responsible person. If you are seeking a higher paying job, companies want people that take control of their financial situations.
• With a lower credit score, if you are in the market to change your Auto, Health, or Home insurance it will determine how much you will be charged for coverage. If you are a “risk” you will be charged more regardless of your driving history, health conditions, or ability to pay.
• They have caused good payers to suffer extreme mental anguish.

I WAS NOT A BAD RISK until their Directors embezzled or lied about the financial condition of the company. Then they gave themselves bonuses!
Those of use that pay our bills have been given the middle finger by the credit card companies.

We are all a “RISK” to them. We are made to believe “it was our actions that forced them to do what they had to”, we are all bad people and must be punished. I didn’t ask for their bloody spending limit increase, and when I took them up on their offer they do this? I lived up to my end of the bargain and paid my bills.

What they did to me and other GOOD, hard working people amounts to nothing more than Legal Extortion, Mafia like strong arming, and should be against the law!
lharrell responded:
Posted: August 18th, 2009 at 11:01 am
So what do we do when we get a notice of a higher interest rate, opt out? It will take me forever to pay off these cards. What are people to do?
Neva responded:
Posted: August 18th, 2009 at 12:24 pm
Pretty much same story. Capital One raised my rate in April from 8.9 to 17.9 for no good reason other than that they could. Made me angry, so I opted out, closed the card, and began to use another card which already had a 17.24% rate. Not much diference from the 17.9 that Capital One was going to; and maybe some will say I cut off my nose to spite my face; but I refuse to continue doing business with crooks! Besides, I almost always paid my balance in full each month; so the higher rate would not usually affect me. Then, lo and behold I got a notice yesterday that the other card was increasing to 25.24%. So now I will opt out of this one and close the account. From here on out I think I will just not use any credit card. My debit card will work as a credit card on those occasions when cash or check is not acceptable. I know that a lot of people don’t have the option of completely paying off their cards; but I would highly encourage them to also stop using credit cards and just pay down their balances if at all possible. In both cases with me, I had the option to decline the rate increase and just pay the card off at the current rate if I carried a balance. If you get a notice, you MUST opt out before the deadline. Read your notice carefully!! If enough people quit using credit cards, maybe the cc companies will wake up and smell the coffee!! I think, though, that enough people will accept the higher rate that the cc companies will continue to accrue their ill-gotten gains. I also think that they wanted me to close my account with them because they weren’t making enough money off me. It made me angry; but I was willing to oblige!
ALLETTA responded:
Posted: August 24th, 2009 at 5:56 pm
I’m not the only one! I feel bad that people are in this boat. I opened an account with WAMU (before they flopped) I had an 11% APR. Fast forward 2 1/2 yrs my now Chase card carries a little over a 27% interest rate which is outrageous since I’ve never been late on a payment and always pay at least double the minimum. Maybe due to the fact that I do carry a balance but seriously how can they expect me to pay it down? My payments are eaten up by interest! I am trying to transfer my balance to a card with a credit union. I really want to cut all ties with chase and close out my account but I’m afraid this will hurt my credit
gary responded:
Posted: October 27th, 2009 at 1:10 pm
HSBC(GM Card) doesn’t seem to care about disabled!! I am a disabled person and have used my credit card ONLY for medical expenses that medical insurance did not cover. I paid every month on time and always over the minumium. Even though I may be poor and on a fixed income with only SSDI as my only source of income, I have always managed to have a good credit score as my goal was to eventually get better and rebuild my life. I was shocked to see my fixed 6.90% rate increased to 13.99%. I have no choice but to opt out and suffer the hit to my credit score. I called GM Card but they could seem to careless. God Help us all.
Vicki responded:
Posted: October 29th, 2009 at 4:40 pm
I have never been late on a payment, pay more than the minimum and Citibank just sent me a letter raiding my interest rate from 10.9% to 29.9%. I hardly owe them anything (less than $800).
Alan responded:
Posted: November 9th, 2009 at 10:27 pm
My rate went from 10.99 to 30.99 on Citibank card . The excuse given was to make credit available to there customers. I’m opting out, paying off and will never be a customer of these LOSERS again!!