Credit Tips: Credit Card Interest Rate Hike

Posted On: March 1, 2005

Author: archive
Joined: 23 Jul 2004
Posts: 5007
Posted: Thu Jan 13, 2005 4:34 pm
Post subject: Interest rate hikes due to other creditors!

Jamie Sutherland
Date: 4/21/2000 0:22 am CDT

I stumbled upon your site after searching for consumer oriented sites
with credit card information.

I received a “Notice of Change In Terms to Your Citibank Card Agreement”
recently. Within this notice lies this gem, “In addition, the annual
percentage rate for purchases and cash advances may vary if you default
under any Citibank Card Agreement because you fail to make a payment to
us OR ANY OTHER CREDITOR WHEN DUE (emphasis mine), you exceed your
credit line, or you make a payment to us that is not honored by your
bank. In such circumstances, we may increase the APR on all balances to
a higher rate of up to 14.99% plus the Prime Rate, currently up to
23.74%.”

Is this legal???? If someone makes a late or misses a payment to Sears,
Mervyns, or whoever, Citibank can at their discretion increase the APR
to nearly 24%? How can a third party problem between Jack and Jim give
Bob the right to take a bite out of Jack?

I’ve received offers including these type of terms and always tear them
up. I assumed they were barely legal institutions…..but Citibank?

Is there any legislation pending or being developed to void this type of
predatory practices. Does anyone know if there any class action suits in the works?

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Author: archive
Joined: 23 Jul 2004
Posts: 5007
Posted: Thu Jan 13, 2005 4:34 pm

Eugene Skorodinsky
Date: 4/25/2000 0:14 am CDT

Jamie Sutherland wrote:

> “In addition, the annual percentage rate for purchases
> and cash advances may vary if you default under any
> Citibank Card Agreement because you fail to make a
> payment to us OR ANY OTHER CREDITOR WHEN DUE…..”
> Is this legal????

Absolutely!

> If someone makes a late or misses a payment to Sears,
> Mervyns, or whoever,

… they become a higher “risk” for other creditors as well, so…

> Citibank can at their discretion increase the APR to
> nearly 24%?

Yes, it can. Whether it will, though, is a question. They might loose you if they will, and they don’t want that, at least not untill you show real signs of risk.

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Credit Tips: Credit Card Interest Rate Hike

Posted On:

Author: archive
Joined: 23 Jul 2004
Posts: 5007
Posted: Thu Jan 13, 2005 4:28 pm
Post subject: Fleet raised my rate! Is this legal?!?

John
Date: 4/25/2000 10:21 am CDT

I have a question. I recently received a letter from my credit card company
(Fleet Platinum)informing me that my “FIXED” rate of 7.99% is being
increased to 10.5% and an annual fee of $35 will now be initiated in order
to meet the increases that the Fed has placed on the rates. Do they legally
have the right to do this even though I have never missed a payment? I
think this is ridiculous and I believe the credit card company is hoping
that most people won’t read their mail and not say anything! Can anyone help me?

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Author: archive
Joined: 23 Jul 2004
Posts: 5007
Posted: Thu Jan 13, 2005 4:28 pm

Board Monitor
Date: 4/25/2000 10:37 am CDT

Unfortunately, this is legal. We have had quite a few complaints about Fleet (in regard to this very situation). Disover Card has recently raised their rates as well for the same apparent reason (rising rate environment). Only they changed from a fixed rate to a variable rate.

Fixed rates are never permanently fixed. The only advantage is that they don’t fluctuate as much as variable rates.
The only advice I can give you is to search for another card!

Good luck and I hope this helps…

Regards,
Jackie Hughes
Board Monitor
CardRatings.org

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Author: archive
Joined: 23 Jul 2004
Posts: 5007
Posted: Thu Jan 13, 2005 4:28 pm

Phill Leamons
Date: 5/3/2000 12:48 am CDT

The same thing happened to me and When I contacted them I was told “They weren’t making enough money. And they raised the rate because the wanted to do so.” Want to guess what I cut up last night. Will get a bank loan and pay their card off.

I will also advise everyone I know of to cancel their card and return all of their applications shredded to fleet.

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Author: archive
Joined: 23 Jul 2004
Posts: 5007
Posted: Thu Jan 13, 2005 4:29 pm

TomB
Date: 7/13/2000 11:06 pm CDT

When they told me they were starting a $35/yr fee because “the fed has raised interest rates 6 times in the past 1.5 years”, I said “When I was paying 15% for 5 years (they lowered it to 9.9% about 6 months ago when I said I would cancel it), they didn’t send me a card saying they were lowering my rate because interest rates were so low”!

I cancelled my card and recommend everyone else do likewise.

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Credit Tips: Credit Card Interest Rate Hike

Posted On:

Author: archive
Joined: 23 Jul 2004
Posts: 5007
Posted: Thu Jan 13, 2005 3:51 pm
Post subject: Beware! Traveler’s Jacked Their Rates Up!

Katy Winslow
Date: 5/4/2000 12:35 am CDT

I just received my latest statement from Traveler’s. My finance charge rate went from 9.9% fixed to 18.14%. I have never been late, I send more than the minimum each month so there is no legitimate reason for the increase. I called to see if there was an error. The service rep on the line immediately got snippy and said that the bank had increased the rates. I asked how they could do that with no notice and was told notices were sent out at the beginning of March. I got snippy back and said obviously I had not received any notice or I would have called much sooner. I asked that the information be faxed or mailed to me. The rep said I would receive it in approximately 7 working days. I will not be keeping this card.

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