Credit Tips: Changing Credit Card Terms
Written by carnold
Posted On: October 1, 2004
Author: VerneSENIOR MEMBER (Member for 2 yrs.+)
Joined: 14 May 2003
Posts: 474
Location: Midwest
Posted: Sun Nov 16, 2003 12:45 pm
Post subject: Changing Credit Card Terms
Good Morning, GM sent me a mini change-in-terms notice that could be worrisome.
1. As of March 2004, the minimum payment will be 2.5% or $20 (which ever is greater or the balance if under $20).
2. The paragraph labeled “STATEMENTS” has been removed from the agreement. and they conclude with:
3. “We may change or terminate all or any part of this agreement or add new terms at any time, including without limitation adding or increasing fees, increasing you periodic payment and increasing the rate or amount of finance charge, or changing the method of computing the balance upon which finance charges are assessed. Written notice will be provided to you when required by applicable law.”
Over the last few years GM has given me the best rates and numerous no-fee balance transfer deals. They increase my credit limit every year and send new balance transfer offers every other month. But this change in terms has me a little worried. If the minimum payment is increased from 2% to 2.5%, what’s to stop them from raising it to 10% or higher? And with little or no notice. 2.5% min pay is no problem for me. But since I’m carrying a balance with GM at 6.9% (my best rate), I’d rather pay the minimum and throw more money at higher interest cards. But I know too that if I make a string of minimum payments, I’ll be more suspectible to a rate change. So in the end I pay about double the minimum on this card just to be safe. I’m just concerned that GM is up to something. They’ve tried for years to get me in deep with them. In less than four years the credit limit went from $6,000 to $14,000 with very enticing BT offers. They check my credit report every month in hopes to find a derog and hit me with the penalty rate. I don’t know what was in the original “statements” clause but I’m sure its removal won’t benefit me. I know they can change anything at any time and the “agreement” is worthless anyway but the wording in this change in terms suggests they are trying to justify themselves ahead of time. Sort of like Hitler claiming Poland attacked Germany a week before he invaded them. After recently closing my Bank One account with a hefty balance I’m finally running out of manuevering room. If the other shoe drops with GM, I’ll have to close that account with a balance and my credit utilization should rocket to new heights: 200% or higher. And if more cards follow suit, I’ll be left with just my credit union card and 425% utilization. But the good part is that the debt continues to go down and my interest rates are low. Don’t do what I’m doing at home! This is for professionals who’ve mastered the art of walking off a cliff only.
Verne
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Curtis Arnold, a nationally recognized consumer educator and advocate, has been educating consumers about credit cards since 1998. Curtis is the author of "How You Can Profit from Credit Cards: Using Credit to Improve Your Financial Life and Bottom Line" (FT Press, 2008). He is also the co-author of the upcoming Complete Idiot's Guide to Person-to-Person Lending (Alpha Books/Pengiun Group USA, April 2009), a contribitor to The Ultimate Allowance (InnerWealth Publishing, 2008) and is extensively featured in 42 RulesTM for Driving Success With Books (Super Star Press, January 2009).
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