Credit Card agreements

[Joe]

I don't know if anyone else has noticed, but I personally don't like a trend that has taken place in most major credit card agreements. You know, those things that come with the statements that you never read and throw away...

Well, read them next time...

The BIGGEST issue I have with them is the trend for this line:

"You understand that the terms of your account, inculding APRs, are subject to change. This means that APRs may change to higher APRs, fixed APRs may change to variable APRs, or variable APRs may change to fixed APRs. We reserve the right to change the terms (including APRs) at anytime for any reason, in addition to APR increases that may occur for failure to comply with the terms of your account."


I have seen this line from 3 different major credit card companies.

Basically they are saying that they can yank that lovely "fixed APR" you have at anytime and start charging you a higher intrest on your balance, just cause they "feel" like it...

Personally, I am not worried. I carry a very low balance on my cards. Those of you that have greater amounts of debt along with the others in our country might want to be concerned about this... Why would a company need to put a line like that in their agreement when they make offers like "0% intrest till December 2007"? This basically means that they can offer you whatever to get you to switch your balances to them and then swap that promised intrest rate for a higher one... Seem fair?

I find it odd that no one seems to be making an issue of such an obvious fraud possibility by the credit card companies... :dunno:

[BigJimSlade]

Big Jim noticed that as well. I think the credit card companies have to notify you of the change in one way or another. At least they did for me.

I did have this happen to me once. I got a note in the mail saying they were raising my interest rate by 10 points. I called to complain, and the CSR said something along the lines of "oh, well since you are one of our favored customers, we will go ahead and keep your card at the prior rate."

I agree, it is definitely a hassle.

[Amortized]

Credit Card Companies = Legal Mafia

[Charles]

I usually read my agreements over pretty close, but I'm going to doublecheck them again.....

[Scott]

What I do not like is the lure of 0% - 2% interest on balance transfers but you have to start charging something to the cards 6-9 months later then if you don;t the rate goes up to some stupid high rate.

Thank goodness I have just about all of them down to zero.

[Guado]

They have had that disclaimer since at least 7 years ago. It was on the application you filled out. However recently laws have been changing more and more(you can thank california) to make things painfully obvious.

California his a boatload of stupid credit card laws. Even their statements are written in more "dumb" language.

[Deus]

Actually, I believe that the terms you described have been around for quite some time. The difference today is that many credit card companies use these provisions agressively today. It has been widely reported that some credit card companies have been jacking up low rates to like 27.99% APR's because minor delinquencies were reported on other accounts (not the credit card at issue). Other simiar increases have been reported because credit card companies have decided based upon a credit report that a consumer is overextended. Credit limits are also frequently adjusted, which can lead to unexpected "over the limit" fees and also degredation of credit ratings because debt vs. open lines of credit is an important factor in credit scoring.

In short, it is a common practice of the credit industry today to montior credit reports almost in real time. It also seems that credit card companies make the cynical decision to raise rates when the consumer has a significant debt that cannot immediatley be repaid and likely lacks the borrowing power to move it to another lender. One only wonders what new abuses the bankruptcy "reform" will spawn.