Credit Card Companies Gouge HuffPosters
Banks capitalizing on taxpayer bailout money from TARP have alarmed their customers by hiking - often doubling, and in some cases even tripling or quadrupling - interest rates on credit cards, according to an outpouring of reports from HuffPost readers.
In some cases, banks have raised rates despite a cardholder's flawless record.
"I have never missed a payment on a credit card," wrote Beth Stubbings of Duluth, GA. But about two weeks ago, she received a letter from Chase stating that the APR on one of her two cards had gone from 9.9% to 14.9%."
What reason did they cite? "To maintain profitability on my account," said Stubbings.
A glance at the 250 plus responses to Arianna Huffington's callout for personal stories about credit card debt shows that Mrs. Stubbings is far from alone. Capital One notified Peter Economou of Seacaucus, NJ that, on April 17th, the interest rate for the credit card he's had since 2004 will spike to 15.9%.
"I called them to inquire about the rate increase and I was told this rate will apply to my existing balance which is about $12,000. Presently I have a floating rate that most recently was 4%," said Economou.
The interest hikes may seem unsurprising, if disconcerting, as banks scramble to maintain solvency in the wake of the subprime mortgage meltdown. But the implications are troubling. Ballooning consumer debt - bundled (like mortgages) into investment packages for finance industries while Wall Street was drunk off deregulation - will most likely be the next heavy blow to an already crippled economy.
Individuals nationwide are already reeling from a phenomenon that has yet to be comprehensively addressed by the media or on Capitol Hill, while banks continue to hike rates and consumers are left without recourse.
Washington Mutual, which was bought by JP Morgan Chase last September after becoming the largest U.S. bank to fail, "more than doubled my credit rate, although I had kept my account in good standing for 8 years," said Ryan Colclasure of Galesburg, IL.
"When contacted, they would only state that it was a 'business decision' and that I could opt out of this by immediately paying off my balance. Since I had just been forced to sell my business at a loss due to the economic downturn, this could not be further from an option for me. I later found out that WaMu had done this to a huge number of their cardholders after losing billions on their mortgage holdings."
The tone of outrage found throughout HuffPost readers' written stories indicates a rising groundswell of anger against banks. When this next domino of the financial meltdown falls, it could bring with it a generation of Rick Santellis who, instead of taking issue with mortgage relief, raise hell over bailing out these banks.
Are you being forced to use your credit cards to make ends meet? Has a credit card company jacked up your interest rate after missing a single payment - or raised your rate even though you haven't missed one? Have you been charged unexpected add-on fees?
If so, we want to hear your story too. Share it with us by emailing firstname.lastname@example.org.