A Crazy Tale of Two Credit Card Companies.....

[radfringe]

A couple of days ago, my partner received her credit card bill - they raised the rates with no notice. Being the "pit bull" (sans lipstick) that she is, she called them up and got the rates lowered to their previous level.

I observed her "outrage" over the rate increase, then while on hold - her muttering and swearing about credit card companies screwing everyone, and concluding with more ranting about corporate execs getting bonuses. The reason given for the rate increase had nothing to do with the timeliness of payments - she hasn't missed a payment, and usually pays double the minimum due - the reason was "the economy is bad".

This got me to thinking - yes the economy is bad, big and small businesses are hurting just as much as individuals. However, how does raising the rate to a point where a person can't afford to pay the bill benefit the economy?

So here's the crazy idea - it's a long shot, and probably won't ever happen...but I'll throw it out here anyways.

Let's say you have two credit cards: You receive a letter from Card-A advising you of a rate increase, a second letter arrives from Card-B which says the economy is bad, and in the spirit of working together and having to make sacrifices Card-B is LOWERING your rate on the current balance until it's paid off.

Flash forward to when you are on better economic footing - would you be more likely to use Card-A who raised your rates, or Card-B which showed some compassion, understanding of economic situation and lowered your rate?

If a friend/relative asked for a credit card recommendation - which would you recommend?

The "goodwill" effort showed by Card-B may cost the company in the short run, but it would pay-off in the long run.

I seriously doubt a credit card company would voluntarily lower their rates, if they were smart they would. However, they are not smart - just greedy, and greed is their public image.

[Jackpine Radical]

1. American business is always about short-term greed.

The next quarterly statement is God. For many of them, the CEO is a parasite padding his resume with profits so he can move on to the next host. That's what drives a lot of takeovers, and what keeps them from doing things that are in their own long-term interest. Nobody gives a shit about the long term. Parasites never worry about keeping their hosts alive so they can continue to leech off them, nor about the health of the larger environment, which is obviously necessary to keep the whole host species alive.

[radfringe]

3. Like I said

They aren't smart - just greedy.

When we have recovered, and are on better footing - spending and borrowing habits are going to be greatly changed. People will watch their pennies more closely and hold them even closer.

We will remember who gave us a break and who didn't.

[Jackpine Radical]

19. Was it Lenin who said of the capitalists

that they'll sell you the rope that you intend to hang them with?

[Democrats_win]

2. Raising the rates should be illegal especially on past debt. eom.

[NNN0LHI]

10. It would be if the companies didn't disclose that possibility when someone applies

Not saying its right, just saying what can happen when we get in dept to these legalized loan sharks.

Don

[jmowreader]

13. And MORE especially...

raising the rate based on your relation with your OTHER creditors. If you send in the light bill a day late, the credit card companies should not be able to raise your rate 10 percent if you're current with them. It happens. Frequently.

[Somawas]

4. Credit card companies are scum.

Basically, corpsefucking douchehammers.

[radfringe]

5. and that's their image...

this is the reputation they have created.

[napi21]

6. From a marketing standpoint, you're right, but that's not the biggest

concern right now. My biggest concern is that the NEXT crash we will all see is thefailure of the CC companies! Think about it...

Housing prices are falling and many are upsidedown in their mortgages so the bank raises their mtg. pmt. to try to offset their risk. They can't pay the higher pmt. and lost their house.

The economy is collapsing and millions lose their job so they have to rely on their credit cards to survive. They they realize they've maxed them out and now can't pay the payment at all.

Credit card companies collapse because of the millions of defaults.


I think it's foolish for the CC co's to randomly increase interest rates without cause, but I also can't fault them for seeing red flags on accounts that are paid late or maxed out!

I hate to sound like such a pessimist, butt I've been looking for some small glimmer of positive news ANYWHERE, but all I see is foreclosures, job losses, retail failures, business cut backs, commercial real estate forecolusres due to businesses closing and too much empty space. I'm 65, and I seriously question is I will ever see anything similar to normal in my lifetime!

[radfringe]

7. Yes, they will crash

probably by spring we will see credit card execs flying their jets to D.C. and ask for a bailout so they can buy a $1,200 wastepaper basket for a newly redecorated office.

[Sydnie]

8. your story reminded me of this

http://www.youtube.com/watch?v=cJv1CC7Ehq0

The video is not so good, but you'll get the gist of it from this.

I have never forgotten this silly little bit in this movie and it often crosses my mind in times like these. This is a fictitious company, but I remember their name just the same. See how this could work in these days that we live in?

[global1]

9. American Express Is Giving Me A Run Around - They Are Unscrupulous.....

I only got an AmEx card to be able to charge at Costco. Costco should learn how AmEx treats their customers and switch to another credit card company. I'm dumping AmEx and as such will not be a CostCo member. CostCo lost a customer because of AmEx.

[NNN0LHI]

11. I just got one of their cards and they are driving me nuts too

I only applied for the card because if you charge $500 dollars on it in the first 3 months they give you a $300 dollar gift card. I put one purchase on it that came to over $500 dollars and don't plan to charge any more on it so I wanted to pay it off early online. No deal. Their website won't let me make the payment to pay it off and get it off my mind. It keeps telling me that because no money is due so I am ineligible to make a payment now? I never heard of such shit. I just want to pay what I owe right now and they won't let me until the billing date of the 5th of this month.

Crazy. I tried to give them their money weeks ago and they won't take it. Doesn't sound like any way to run a business to me.

Don

[L0oniX]

15. Uhm ...it's called a billing cycle. You can't pay what isn't due yet.

That's standard for all credit cards. You can still pay on it but it won't count as a billing cycle payment.

[NNN0LHI]

17. My MasterCard and Discover don't work that way

I can go shopping and come home and if it has already been entered on my bill I can pay that amount right then. Been doing it for years that way.

Don

[L0oniX]

18. Of course you can pay anything anytime but it doesn't count as a billing cycle payment.

[NNN0LHI]

21. I should have been clearer

The American Express website won't let me pay anything at all until the 5th of the month when the bill comes due even though it is currently showing I have a balance.

Thats what I am not used to.

Don

[SmileyRose]

12. Which company is credit card B.

do tell. Those of us who use credit would love to throw them our business.

[jkilvik]

14. Company A purchases Company B

In the real world, Company A would use their short term profits to purchase Company B and begin raising the interest rates of Company B's customers to cover the cost of the acquisition. Senator X and Senator Y of Company B's home state would issue a press release decrying the purchase while riding on Company B's corporate jet to an important legislative conference in Scotland.

[Muttocracy]

24. that added to my debt woes - I couldn't play cards against each other when they merged. nt

[4lbs]

16. People need to start reading the fine print on these CC agreements, however small the font they use.

Nowadays, CC companies can raise your rates based on activity not even related to that particular card.

For example, if you have a VISA with a certain bank/company, and you are late paying a utility bill or rent/mortgage, the agreement you signed often gives them the right to raise your CC interest rate. This is even if you've never missed a CC payment.

Or some will raise your rates if you get a moving violation driving a car.

Any reason a CC company can think of to raise your interest rate a little at a time they'll do it.

[Muttocracy]

23. yep, be aware of the terms AND that they can pretty much change them at will. nt

[MadHound]

20. Why don't you, your partner, and the millions of other credit card users try this novel idea

Cut up the goddamn cards and go to a cash/check/debit card basis only. Stop paying that outrageous interest, stop paying all those fees, stop racheting up your blood pressure every time you hear from these companies, improve your personal budget, improve your credit score.

Just pay the balance off, cut up the cards, and go forth and charge no more. I've been CC free all my life and my life has been better because of it.

[Muttocracy]

22. My credit card doubled my interest rates because I "wasn't paying down my debt fast enough"

:wtf: - how did they think that would improve the situation? I really think it was because of a couple of credit inquiries on my credit report - NOT any negatives on my credit. I was unemployed shortly after that and am still digging myself out of the whole.

Anyway, that was several years ago. Refinanced my debt into an installment loan with a local bank, and it's slow, but I'm catching up.