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.

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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 [e-mail].

Comments

[ponderingmuch]

Keep all threads of credit card usury alive.

They get started but then disappear in favor of the fights between zillionaires.

[Andreerdna]

I had been sending it the same way, by mail, two weeks before due, for years. I had considered suicide, trying to figure out a fairly quick and painless way to do it without making it look like suicide..
so my life insurance would pay my kids. Don't worry, though. I worked through that kink and untied the psychic knot with some much needed help.

[Andreerdna]

I took the verbal offer of $6000 balance transfer on the terms he outlined (being reminded that the call was being recorded) so that I could pay off my high % Chase card. The money arrived in my bank account in a few days. I called B of A to make sure they were sending me a written terms of agreement on the money. I was assured they had done that. I was desperate to maintain my good credit ratings (I needed credit to make large purchases) and immediately paid off the high balance Chase card.
In summary, B of A never sent the terms. I went a few months before I called them again and this time was told that the balance transfer offer was only for 6 months and when it expired I would be paying it back at 22%!!!! I exploded. I imploded. I expanded and contracted violently.
I demanded to speak to supervisors and blah blah blah.. it led nowhere. I reminded them that it must have been recorded somewhere! I was told the recording was not available. I insisted that I was told "this" and they said "no way would we make that kind of offer".... I panicked. It is now March and the new 22% will begin on a $12,000 balance. In the meantime, my other Chase card's balance was raised to 15% after they said they did not receive the payment in time.

[That Guy]

NEVER do ANYTHING with ANY credit card company without getting something in writing. As for you, I suggest you default on both cards and settle it in court (or before court).

[Andreerdna]

I tried to revive my business to no avail. The only way to get what was needed was... my credit cards and their wonderful offers.
I have had my B of A credit card for at least 9 years. My Chase account I have had for more than 12 years. Late last year, approx in November, I was called by B of A (or someone in India working for them) to offer me a balance transfer with my account at 0% for the first year then 7.99% FIXED for the life of the loan. I already had a balance of $6,000 that I had been paying off at 7.99% and I have Chase cards with balances of approx $6,000 at 10% on one and $3,000 at 12% on another. (cont)

[Andreerdna]

I would come home and cry. This company handled evictions and foreclosures as well as estate sales. I would arrive on the premises and often see families still in the home with children. I would apologize dozens of times as I photographed the property. Nobody knows the trouble I seen.
Anyway, I had to quit. This, of course, led to more use of my credit and
personal assets. I have a daughter in college and another approaching.

[Andreerdna]

First, let me tell you. I had been successfully self-employed for a dozen years in the estate sale business until a year and a half ago when I went to work for an auction-liquidation company as an appraiser/inventory control and website manager. While working with them, I saw horrific life situations that this business exploited and profited from. It was not that way in the estate sale business where I would mostly deal with deaths and the families liquidating the deceased's assets. It was an honest enterprise with helpful results that was my primary (modest) income for many years until business, well...died. Families would cut out the middle man and sell items themselves instead of hiring liquidation-estate sales companies. As business waned, I drained savings and used credit to create more business and failing that went to work with this large and sucessful firm (reluctantly).
I only lasted a few months. (cont..)

[DestinationsUnknown]

The SEC settled administrative proceedings against JPMorgan Chase & Co relating to its activities as an asset-backed indenture trustee for certain special-purpose subsidiary programs (programs) of National Century Financial Enterprises, Inc. (NCFE), formerly a Dublin, Ohio healthcare financing company, during the approximate period 1999-2002. (Remember this timeline)

JPMorgan Chase & Co., the largest U.S. bank by market value, agreed to pay $425 million in 2006 to settle claims by Arizona noteholders. The noteholders said JPMorgan and other banks underwrote or were trustees of the notes used to defraud investors.
After the last trial for National Century Financial Enterprises, Inc. in December 2008, February 2009, ‘Credit Suisse Securities LLC has asked the court overseeing litigation over the collapse of health care lender National Century Financial Enterprises Inc. to sanction Lloyds TSB Bank PLC for allegedly hiding a deal with Moody's Investor Services Inc…’

[aaron1948]

Dear American Express:

Last month you asked me to pay my $300 monthly charges 2 weeks early.

Today you suspended my charge privileges and will restore them only if I pay my bill 3 weeks early.

I have been a card member since 1979, and have always paid you.

I am sorry that I cannot upset my cash flow and pay you early. My cash flow is delicately balanced in these trying times. Each month I have significant medical bills stemming from a major medical error. If I pay you early, I will have to forgo the medication that keeps me alive.

Asking for payments early seems to hint that maybe you, too, are having cash flow issues. And maybe just looking for an excuse to cancel my card because I'm small potatoes.

You have always treated your cardholders with respect. What are you thinking now? I fear that if you start treating your customers so poorly, it is the beginning of the end for you.

Actually, you probably need us more than we need you.

I don't respond well to threats and such poor treatment. Until I decide whether to even give you another penny, please credit my share of your bailout funds to my card balance.

I hope you considering return to Customer Service, and disavow Customer Servitude.

[zeiben]

So far so good with BoA. Promotional rates of 4-ish for 12-18 months are fine by me, and as long as they don't bullshit me they can count on me rolling them any other CC balances I have or using their bank checks to deal with cash flow in my business from time to time. If at the end of 18 months they don't extend the promotion, I'm sure someone else will be happy to collect those 4 points

[OlderBudWeiser]

Citi/ Sears upped my interest rate to 18% and I have never even used the card, don't owe them a dime and don't plan to, ever.

[elsieach]

http://www.defendyourdollars.org/2009/02/congress_is_not_giving_up_on_c_1.html

I've passed this petition/link on to several people. All of us got (pretty much immediate) responses from our Reps, Senators, Governors and the White House.

PLEASE USE IT AND SEND YOUR MESSAGE, TOO. It has a prepared message you can send, change, or add to.

The President got where he is because of us and we should not stop that grassroots push for any reason - in fact, we need to accelerate it to fight these big money interests.

PLEASE USE THE LINK!

[justafarmer]

OMG! Discover nailed me for a bogus $38.66 charge tonight, even thought I had the balalance paid off.
First supervisor tole me it was because of a cash advance my husband made while of restoring power in western Kentucky at the beginning of Febrruary that I PAID OFF on Februrary 13, even though I made an additional payment on February 24. Sh was really REALLY nasty.
I called back to dispute the $38.66 charge I found on the account on February 27 (nark that is THREE days after I made an additional payment on February 24)...this next person says it's a charge at Kroger's on February 17 (keep in mind already paid $42.05 on February 24!)
thieves, and I'm back on hold...they say I'm available for a great dea on a low rate transferl!!!!!

[justafarmer]

called Discover three times...got three different explanations and all of them are bogus. They are looking at my payment dates and claiming they are three different card charge dates.
I'm done. Paid the $38.66 and closed the account.
Good riddance.

[MoMick]

Read the following HuffPo article:
http://www.huffingtonpost.com/arianna-huffington/financial-follies-is-the_b_170373.html
then write to your congress(wo)man and senators and demand that they work to implement the new rules now rather than 18 months down the road.

[justafarmer]

I had a good experience with BoA tonight, got a good offer for another 15 months. Discover was a nightmare...I paid them off a few month sago and have continued paying them off but they informed me in January that my rate was going up to 11.48% on March 1.
No problem I thought, but tonight I checked my account online and learned they charged me $38.66 for a cash advance my husband made earlier in February when he found himself in western Kentucky working 16 hour days restoring power and left home Sunday, February 1 with $5-10 dollars in his pocket (he had just gotten home that Saturday afternoon restoring power in Ohio and the bank was closed).
I had ALREADY paid for the cash advance on February 13 and then checked and pid additional charges on February 24. On February 27 all of a sudden I see this $38.66 charge and they tell me it's the $200 cash advance and get nasty with me when I argue???

[justafarmer]

DiscoverCard is the pits!!!
They rose my rates from 8.99 to 12.99 in Janaury, despite me EVER missing a payment and my balances has been paid of since January.
My husband is a power lineman and was using the card for gasoline and food, which I had already paid off for January, but Sunday, February 1, he got a call (after only being home less than 12 hours) to head to western Kentucky for the ice storm with $5 or $10 in his pocket. I paid off his road expenses on the card on February 13, INCLUDING a $200 cash advance he got as a result of me getting him an ATM PIN number. I paid off another $42.05 outstanding balance for gas and food on February 24 after he came home (and was laid off on the 16th).Tonight, February 27, I checked my Discover balance and found that I owed an additional $38.66!!!! (THREE DAYS after I paid $42.05!!!) The supervisor told me the $38.66 was because of the $200 cash advance at an ATM at the beginning of the month, and there was a hefty ATM charge at the time!!!!
Shysters....Card got canceled tonight and I don't give a crap about my credit score anymore.