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Over at the Consumerist, they wrote about how credit cards are raising interest rates if you happen to go over the credit limit:
Discover is the new cheerleader for penalty APRs and plans to asses rates of 31% on top of their $39 over-the-limit fee. Other creditors are rushing to get in on the action, too.
[Via Consumerist.com]
Make sure you read the comments on this one. You’ll read about credit card companies lowering credit limits to just above how much you have charged on it. If you do not catch it, and pay extra next time, the finance charges they charge you may just put you over your credit limit. Scary!
Always check your statements!
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Posted: April 13th, 2008 at 9:29 am
GM Card (owned by HSBC) did this to me in addition to raising the APR to the default rate a few months ago. My APR is currently at 30.99% and they lowered my credit limit to around $100 over my current balance. It seemed like a really arbitrary amount to lower the credit limit to, as my new credit limit is now $x,705.
I’ve never had a late payment, been over the limit, etc. on ANY of my credit cards. My credit score is decent (low 700s) and I’ve had this card for about 8 years. I couldn’t get an explanation for why this happened to my account other than it occurred after a “periodic review.” Further, I wasn’t given the option of opting out of these changes.
I’ve had similar issues with another one of my cards. Credit card companies are EVIL!!!
Posted: April 14th, 2008 at 12:08 am
What will they think of next? Anything to make us pay an extra dollar and ding the consumer. Thanks for the heads-up - I’ll be checking my statements and limits that much closer!
Posted: April 14th, 2008 at 3:19 am
Thats nothing. The credit card companies have been doing this since the 1980s.
Posted: April 14th, 2008 at 11:07 am
Ive had this happen to me at some point in the past. Heres a kicker too: credit card companies might charge you just for “potentially” going over your limit. Same thing with raising rates.
Posted: April 15th, 2008 at 10:13 am
It’s like they’re moving the goal posts in order to make you lose. I wonder how much longer it will take before they randomly decide to take payments or not. At the same time I don’t think this is as bad as the lenders freezing HELOCs.
Posted: April 15th, 2008 at 7:16 pm
They (washington mutual) haven’t changed my credit limit (yet), but they did just raise my interest rate to 22% + Prime (currently 5.25%) last month.
Insane. I didn’t bother to call and argue with them since I pay my bill entirely every month so I never get charged interest. I’ve never made one late payment either and I’ve been a customer for 6 years.
Seems like they’re just doing this to everyone…I really feel for young families and others struggling just to buy food and gas and then suddenly get charged nearly 30% interest on any amount of credit card debt they may have…
Posted: April 19th, 2008 at 7:01 am
Citibank last week assessed me a late fee and bumped my rate up to 29.9% because I made a payment on the due date but at 8:00pm instead of before 5:00pm. (I was on vacation— made the payment from a hotel room, after I confirmed that my paycheck had been deposited!) Minimum payment was immediately over 2ce previous amount.
I called and complained as soon as I found out. Initial rep “could not do anything.” I was considered in default even though she could see that the date of payment was the date it was due.
I asked to speak to a supervisor. Said supervisor congenially took the rate down to 13.2% and refunded the additional finance charges. Suggested I schedule a payment online (a tool they have on their site) for the day before it’s due in the future. That’s a little tricky for me personally due to direct deposit timing—what they might do if the payment is unfunded, I can’t imagine!—but I’m certainly going to be hyperconscious of this in the future!