Why is my credit card company screwing me over when I have a great payment record?

Question

I got a notice in the mail yesterday that after review, my interest rate is going from 10.99% to 29.94% in January 2007!!

I called Chase and was told that even though I have perfect credit and have an excellent record with them, their risk department has seen that I am using over 50% of my credit limit on more than one card and so they are cracking down on me. They are "worried" that I won't be able to continue paying them back.

This is crap! I make more than the minimum payment every month, and have busted my butt to keep my credit blemish free.

I was fortunate enough to be able to take an opt-out option which means that I will keep my low rate for another 6 months, and then they will do another review. If I still am in the same situation thought, they will send me another notice and jack my rates up.

Why is it that they have to stick it to the good customers? Once I have my balance paid off I am taking my business elsewhere.

Answer 1

It's called Universal Default. Any credit card company can raise your rates, it's in the contract. Credit card contracts state that they can change the interest rate at any time and for any reason, as long as they notify you within 15 days. Because your credit usage is more than 50% it is more likely for you to default in the future, regardless it's with Chase or another creditor. Not only that, you may not have been late on any credit cards at all to trigger the default rate. Creditors can raise rates for unpaid/late phone bills, cable or gas, library fines...
Just be thankful that none of your other creditors haven't jumped on the bandwagon yet.

Answer 2

Unfortunately, even though it is crap, they can do this to you. No matter if you have a good payment history or not, if they see you are using more than 50% of your limit, then they can rack up the interest rate without your consent. My advice is to transfer the balances to a lower interest rate card and not have to worry about that new interest rate in January. I have done balance transfers many times and I have saved over $2000 in the end. Only do this if you can and there will probably be a balance transfer fee. But it will be small and you will still save more money in the end.
This type of stuff is also in the FINE print on applications. That they can kick up the interest rate if they feel you are starting to over do it. This just gives them the opportunity to start getting their money back at a faster rate. I heard this information on a Finance show, and it does happen. Save yourself the hassle and money and try to transfer all your balances to one card. Best of Luck to you!

Answer 3

i think of it extremely is often extra useful to not do financial disaster, which will injury your credit record worse than mere fee-offs and collections will. yet of direction it relies upon on a great variety of aspects. you additionally can evaluate credit counseling. Your lenders can take you to courtroom and sue you to get a judgment. The judgment could bring about garnishment of wages or a lien on your place, or get right of entry to on your checking account. word that those ideas are extraordinarily limited -- financial disaster is basically a ability to guard your sources from lenders -- in many circumstances not mandatory for unsecured debt. word that your subject with credit enjoying cards is a few distance distinctive than the guy above who had scientific expenses. distinctive regulations prepare. I very plenty doubt something as draconian could ensue to you. and you don't get arrested for not exhibiting up in courtroom. you in basic terms lose default judgment. plenty extra in all probability, they won't in any respect take the step of suing -- that takes time, money and attempt. yet no ensures. Your state has a statute of limitations, and then lenders can not efficiently sue you (varies, in many circumstances approximately 3 - 6 years). you're able to desire to examine that, and what triggers the "clock" and what if something can restart the clock on your state. some human beings in basic terms wait it out til SOL expires, then take action to clean up their credit comments.

Answer 4

because they can. not everyone notices and they make a bunch of money doing it. You should apply for a different card. Take advantage of the low rate introductory offers.

Answer 5

Don't wait til you are paid off, cancel card now and tell them why. Then just pay them off.
It does suck that they are taking other credit issues out on your on this card!
js

Answer 6

It's time to shop for a new credit card !

Screw them - i'ts yourr turn !

Good luck !