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Have you gotten your new loan-sharking agreement yet?

post #1 of 52
3/10/09 at 8:23am
Thread Starter 
Most credit card companies are sending out new account agreements, which they're free to do at any time. I just received the first such for one of my accounts. As of April, the regular rate for revolving credit has gone up to 14%; the cash advance rate has been raised to 25%; and the penalty rate has been raised to 30%. I have to wonder if the next time they change the account agreement it's going to say something about breaking kneecaps.

This doesn't really affect me as I don't use this particular account, and I pay off the full balance on all my accounts anyway, so I never pay interest. But there are a lot of people that carry balances who are going to be very shocked at the interest they're going to see. So if and when you get a letter from your credit card company that looks very much like one of those solicitations for new cards they send out all the time, you'd best open it and read the mice type.
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post #2 of 52
3/10/09 at 8:30am
I got mine. I'm glad I paid off both of them in January. The one with the largest limit is I have in safekeeping with my Mom and it's only to be used in the case of a dire emergency. The card I've been keeping and using only has a $500 limit. I use it a little each month then pay the balance off.
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post #3 of 52
3/10/09 at 8:39am
One of my credit cards has a rate of 30%! That one still carries bills from college, too. It will probably hurt my credit, but I think I will have to transfer it to a lower rate card, or I will never get that paid off!
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post #4 of 52
3/10/09 at 8:43am
I know one of mine is like 25%. Oh well, I don't care cuz I never pay any interest, I just pay the full balance. I heard that's not a good idea if you want to build up a good credit history though. I think anyone who uses a credit card and then pays interest on it is crazy...it's wayy too expensive and doesn't pay off in the long run. If money is short and it's absolutely necessary, i'd rather get a loan of some sort, mortgage or whatever..
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post #5 of 52
3/10/09 at 10:48am
Your credit and payment history with all creditors (predators) can be perfect and they still jack up the interest rates. Even though they received all that taxpayer bailout money they are still gouging their customers.
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post #6 of 52
3/10/09 at 11:31am
I thought all credit card interest was up around 25-28% at the best of times.
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post #7 of 52
3/10/09 at 12:35pm
Quote:
Originally Posted by Yosemite View Post
I thought all credit card interest was up around 25-28% at the best of times.
No, the highest rate I have is 18.x (forget what the decimal is) and one of mine is 9.9%. I seldom carry a balance, anyway.
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post #8 of 52
3/10/09 at 12:36pm
Quote:
Originally Posted by Yosemite View Post
I thought all credit card interest was up around 25-28% at the best of times.
The interest rate on my only revolving credit card is currently 13%. The rate depends at least in part on your credit history.
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post #9 of 52
3/10/09 at 1:17pm
Quote:
Originally Posted by mschauer View Post
The interest rate on my only revolving credit card is currently 13%. The rate depends at least in part on your credit history.
I may be confusing Visa/Mastercard with the credit cards from places like Sears/The Bay.
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post #10 of 52
3/10/09 at 1:36pm
We got ours last month. It went up to 22%
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post #11 of 52
3/10/09 at 1:39pm
Quote:
Originally Posted by mschauer View Post
The interest rate on my only revolving credit card is currently 13%. The rate depends at least in part on your credit history.
In which case my interest rate should be close to 0% since our mortgage has been paid off and we don't owe anything on any credit cards. I wonder if it works the same in Canada although since we con't carry any balance on our credit cards I guess it doesn't really matter what the interest rate is.
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post #12 of 52
3/10/09 at 1:41pm
reg( ie visa ) vary ... like one of mine is 0 another just went to 23 since that company was bought...

If you keep a balance watch the limits .. one of mine lowered mine by nearly 500 $ ... They sent a letter with the info a MONTH later ... This WILL screw with your credit score ... Legally you have some options , I think if more of us did that the companies would think twice
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post #13 of 52
3/10/09 at 1:42pm
Thread Starter 
Quote:
Originally Posted by ut0pia View Post
.... I never pay any interest, I just pay the full balance. I heard that's not a good idea if you want to build up a good credit history though....
No, that won't hurt your credit score. We get a lot of questions like that on the finance forum I mod. The criteria for the FICO scoring model is outlined somewhere on this website: http://www.myfico.com
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post #14 of 52
3/10/09 at 1:46pm
Thread Starter 
Quote:
Originally Posted by sharky View Post
If you keep a balance watch the limits .. one of mine lowered mine by nearly 500 $ ... They sent a letter with the info a MONTH later ... This WILL screw with your credit score ... Legally you have some options , I think if more of us did that the companies would think twice
You say they LOWERED your credit limit? That's bizarre. And that definitely WILL affect your FICO score adversely. About one-third of the score depends on the ratio of credit used to credit available. So if your limit is lowered, that reduces the credit available. Legally, the only option you have is you opt out; i.e. cancel your account. But that affects your score as well, for the same reason. So we're all screwed, basically, because legally they can do it.
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post #15 of 52
3/10/09 at 1:48pm
Quote:
Originally Posted by coaster View Post
No, that won't hurt your credit score. We get a lot of questions like that on the finance forum I mod. The criteria for the FICO scoring model is outlined somewhere on this website: http://www.myfico.com
Oh wow thanks for that info!! My parents keep telling me that it will not hurt my score but my boyfriend keeps insisting that it will and that credit card companies NEED to make money out of you otherwise your credit history will not build up...I was confused and didnt know which version is right.
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post #16 of 52
3/10/09 at 1:59pm
Quote:
Originally Posted by ut0pia View Post
I know one of mine is like 25%. Oh well, I don't care cuz I never pay any interest, I just pay the full balance. I heard that's not a good idea if you want to build up a good credit history though. I think anyone who uses a credit card and then pays interest on it is crazy...it's wayy too expensive and doesn't pay off in the long run. If money is short and it's absolutely necessary, i'd rather get a loan of some sort, mortgage or whatever..
Don't believe everything you hear. That is absolutely untrue. I have ALWAYS paid my credit card off in full each moth and have never had but one small loan in my life until I bought my house and when they pulled my credit reports, they were over 800 so I can say with certainty that is not true.

But I know that the moron Susie Orman or whatever her name is IS saying that exact thing as my brother heard her on some program just in the last week or so. I guess she isn't as smart as she puts herself out to be.
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post #17 of 52
3/10/09 at 2:05pm
Quote:
Originally Posted by ckblv View Post
Don't believe everything you hear. That is absolutely untrue. I have ALWAYS paid my credit card off in full each moth and have never had but one small loan in my life until I bought my house and when they pulled my credit reports, they were over 800 so I can say with certainty that is not true.
That's how my parents are. But, according to my boyfriend the reason for that is because they have paid bills like phone bills, rent for apartments, electricity, buying new cars, random stuff like that before they bought a house about 5 years after they rented...He says someone like me and him in our 20s who need to build up credit fast should pay some credit card interest to make things move faster....I dunno either way- I'm not paying interest no matter what because I think it's a waste of money.
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post #18 of 52
3/10/09 at 2:07pm
Quote:
Originally Posted by ut0pia View Post
That's how my parents are. But, according to my boyfriend the reason for that is because they have paid bills like phone bills, rent for apartments, electricity, buying new cars, random stuff like that before they bought a house about 5 years after they rented...He says someone like me and him in our 20s who need to build up credit fast should pay some credit card interest to make things move faster....I dunno either way- I'm not paying interest no matter what because I think it's a waste of money.
Don't listen to your boyfriend Utopia, You are right on this one. He is very wrong.
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post #19 of 52
3/10/09 at 2:29pm
Quote:
Originally Posted by Yosemite View Post
In which case my interest rate should be close to 0% since our mortgage has been paid off and we don't owe anything on any credit cards.
The interest you pay is 0% if you have no balance to charge interest on.

If you mean that if you did start to carry a balance over from month to month you think the interest rate you would be charged would be close to 0% just because you previously had no balance, no it doesn't work that way. There is always a minimum amount of interest you would be charged. There might be a low, possibly 0%, "teaser" introductory rate for a new card but it would only be a temporary rate and would have restrictions.
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post #20 of 52
3/10/09 at 4:08pm
Thread Starter 
Quote:
Originally Posted by ut0pia View Post
Oh wow thanks for that info!! My parents keep telling me that it will not hurt my score but my boyfriend keeps insisting that it will and that credit card companies NEED to make money out of you otherwise your credit history will not build up...I was confused and didnt know which version is right.
OK, maybe I didn't say enough, because I didn't know enough. If you have no credit history, then you have no credit score. The length of credit history is one of the inputs into the scoring model. If I remember right, they go back something like seven years and look for things like late payments, defaults, and so forth. So if you don't have seven years of flawless credit history, then for whatever history you do have, one late payment or other negative will have a bigger effect. And if a person has no credit history at all, then they have no credit score, period. You boyfriend is wrong in one aspect, though, credit card companies don't need to make money off of you for you to build up a credit history. But you do need to use the credit, ie charge stuff, and pay it back according to the card agreement. If you don't use the credit, then you build no history.

But you definitely don't need to pay the blood-suckers their interest.
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post #21 of 52
3/10/09 at 4:12pm
Well I've had a credit card for like 4 years. I got my first one at 16 and I've never been late on a payment. But besides my credit card, I don't have any bills.
ETA: Lol I feel like such a brat for saying this!! But I guess it's okay, I am in college. I'm still lucky and grateful that my parents pay for my education though, a lot of parents don't...
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post #22 of 52
3/10/09 at 4:58pm
Quote:
Originally Posted by Yosemite View Post
I may be confusing Visa/Mastercard with the credit cards from places like Sears/The Bay.
Sears used to be the only credit card in the country that based their interest rates on your state of resident, and those rates were set by state limits. How do I know this? I work in IT and designed their credit card systems many years ago.

But other cards are still very much driven by the regulation in the state where their associated bank resides. Many cards like Discover Card went to Delaware because they allowed the highest interest rates. How do I know this? I was on the IT team that stood up Discover Card in the first place.

If you want lower rates, do some digging on the rate policies of different states and shop around. I haven't looked at that information in years so can't tell you which states are better right now. Of course, those banks may not offer up new credit lines right now.

Got a credit card question? I may know the answer.

Now you are going to make me look at my CC statement. I pay mine off every month so never bother to look at the current finance charge rate.
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post #23 of 52
3/10/09 at 5:04pm
Thread Starter 
Ut0pia: plenty of time. You go to Emory? I used to travel to Atlanta quite a bit some years ago. I usually went to the Peachtree Center mall in Buckhead; there was a really great bookstore there, and a music store. But that was almost 15 years ago. It's probably all different by now.
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post #24 of 52
3/10/09 at 5:16pm
No, I go to Georgia Tech I believe peachtree center mall is now Lenox square mall and right across from it is phipps plaza which is another mall, sort of. It must be, because that's the biggest mall in Buckhead. We moved to Atlanta about 8 years ago so I really have no idea what it used to look like, but in the past 8 years not much has changed except for all the new overpriced subdivisions that are now built that are mostly empty... They change the names of everything though, that's for sure lol
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post #25 of 52
3/10/09 at 5:19pm
Quote:
Originally Posted by mschauer View Post
The interest you pay is 0% if you have no balance to charge interest on.
Actually, if you never charge anything at all, that is true. If you charge and pay off your balance each month, that may not be true. There are some states that allow a credit practice to assesses finance charge from the day of purchase, regardless if you pay off the entire balance each month. Most banks didn't use this practice because it made them less competitive. But I bet we see that practice starting up again in this day and age.

Read your financial terms carefully, particularly the part on how finance charge is assessed on the account.
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post #26 of 52
3/10/09 at 5:19pm
Thread Starter 
Quote:
Originally Posted by Momofmany View Post
But other cards are still very much driven by the regulation in the state where their associated bank resides.
That's the state where the headquarters of the bank is -or- if the bank doesn't own its own credit card company, the state where the credit card company is. Not the bank where you might have gotten the card. For example, I have a card that says "Oakbrook Bank" on it, but the credit card company is "FIA Card Services." Basically, the credit card company is its own bank, and it brands the Oakbrook Bank card. When I got the card, Oakbrook serviced their own cards, but then sold the them to FIA. FIA is in Delaware, so now it's Delaware law that governs my credit card agreement. If it's a national bank that issued the card, the bank is probably incorporated in Delaware as well. So they'd have banks all over the country, but the laws governing their credit card terms are the laws in Delaware. That's why so many credit card statements have a return address of "Wilmington, DE"

It's a wonderful tax revenue deal for Delaware with all those companies incorporating there to take advantage of their less restrictive laws. And great for the credit card companies, because then they can shaft us at will with nothing more than a 15-day notice.
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post #27 of 52
3/10/09 at 5:22pm
Quote:
Originally Posted by ConsumerKitty View Post
Your credit and payment history with all creditors (predators) can be perfect and they still jack up the interest rates. Even though they received all that taxpayer bailout money they are still gouging their customers.
Oh, amen to that. Credit cards are usury, plain and simple! I did have to carry charges and I called the CC company and got them to lower the rate. But it will creep back up.
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post #28 of 52
3/10/09 at 5:23pm
Thread Starter 
Quote:
Originally Posted by ut0pia View Post
Lenox square mall
You know, that rings a bell. I think it's Lenox square I'm thinking of, where my bookstore was. Peachtree Center is closer to downtown, isn't it? I don't remember a Phipps square; maybe that wasn't there yet. I don't know.....it was a long time ago.

I had a lot of good times in Atlanta.

But I really ought to shut up. I'm way off topic.
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post #29 of 52
3/10/09 at 5:25pm
Quote:
Originally Posted by Momofmany View Post
Actually, if you never charge anything at all, that is true. If you charge and pay off your balance each month, that may not be true. There are some states that allow a credit practice to assesses finance charge from the day of purchase, regardless if you pay off the entire balance each month.
Actually it would still be true. What you are referring to isn't an interest charge.
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post #30 of 52
3/10/09 at 5:42pm
Quote:
Originally Posted by Momofmany View Post
Actually, if you never charge anything at all, that is true. If you charge and pay off your balance each month, that may not be true. There are some states that allow a credit practice to assesses finance charge from the day of purchase, regardless if you pay off the entire balance each month. Most banks didn't use this practice because it made them less competitive. But I bet we see that practice starting up again in this day and age.

Read your financial terms carefully, particularly the part on how finance charge is assessed on the account.
That was also true of my Visa - I don't know if it still is or not as I pay it off immediately, like if I purchase theatre tickets on-line I need to use my credit card then I go on-line and pay my credit card the amount I just spent on tickets.
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