Credit Card Rate Jump

[Emily Russell]

What is the name of your state? Illinois
I have a BOA fixed rate credit card with 8.99% interest. I received a letter today saying that it was being changed to a variable rate that effectively makes the interest rate 17.99%. I have the option of keeping my old rate if I cancel the account. I would like to keep this account open, and right now paying it off isn't an option. It seems to me that since I opened this account at the 8.99% rate, they should at least let me keep that rate for what is on the account now, and just charge the higher rate for what I charge in the future. Is there any chance they will agree to that, or should I just accept that I can't fight them?What is the name of your state?

[Zigner]

Originally Posted by Emily Russell

Is there any chance they will agree to that

50/50, more or less (did you ask them?)

, or should I just accept that I can't fight them?

You may have to accept that you can't fight it. The fact of the matter is that the CC company is allowed to do this, barring any specific agreement to the contrary (ie: a 6 month introductory rate should stay the same, assuming you keep your end of the bargain)

[SimpleMind]

Chances are in your Terms and Disclosure statement it probably says something like. "The card company has the right to change any terms with little or no notice." It means they can do anything they please. Introductory rate or not. With little or no notice. I don't mean to be rude in my post. Credit Card companies believe it is a privilage to grant you that unsecured debt. You basically have no rights to object. You agreed to those terms when you signed for the card. Those card companies can be stinkers. It isn't fair, but it is a free market society. If you don't like them move the balance onto another card.

Hope that helps.

[Ladynred]

BofA, along with many other issuers, are converting all their fixed-rate cards to variable -- so they can make more money !! Chances are you can't keep the account open and keep that rate. You can try, but don't be surprised if they refuse. It's in their terms, those things that are incomprehensible to most humans and that they sneak into your billing envelope now and then.

[SimpleMind]

I never really understood the "Universal Default Rate".

For example.. If I have a Chase Credit card. Chase looks at my credit report and found a late payment posted to a Bank of America card 2 years ago (30 days late). Chase can classify me as a risk. So Chase jacks up my rate to the "Universal Default Rate" of 24 or 25%?

Even if I have been a good customer to Chase and made timely payments. It is in the disclosure agreements, Chase can jack up my rate even if I had a late car payment, or was late with a Bank Of America, Sears, or mortgage payment. Its not right, but it is in the agreements of all credit cards I have.

[MyHouse]

I got the same notice from CHASE, except they are changing it to 20.24%. I'm going to do a balance transfer to my credit union. I'm not charging anymore anyway... just working on paying off the balance.

[moburkes]

Well, I just got 1 in the mail yesterday. I was trying to figure out when I had made a late payment to warrant this. Now, I understand that it wasn't just me. Thanks for letting me know that I didn't screw up somewhere.

[MyHouse]

No... It wasn't just you! I never pay late either. I did not understand all the fine print though. It said that you can opt out the changes in the APRs by notifying them in writing. Does this mean that if I write them then I can keep the same low interest rate? I'd rather just transfer the balance to a credit union visa because I think it's more stable. As far as I know the rate has not changed there in a long time.

[moburkes]

Originally Posted by MyHouse

No... It wasn't just you! I never pay late either. I did not understand all the fine print though. It said that you can opt out the changes in the APRs by notifying them in writing. Does this mean that if I write them then I can keep the same low interest rate? I'd rather just transfer the balance to a credit union visa because I think it's more stable. As far as I know the rate has not changed there in a long time.

If you opt out, they will close your account, and you will owe your balance in full. I'm going to just double up on my payments. I've got 2 accounts with them, so will pay them off over the next few months so that it will impact my pocketbook less.

[MyHouse]

OK, thanks... I didn't think that opt out meant that they would just keep the interest rate the same... LOL... Would be nice though if that were the case. Unfortunatley I can't double up on my payments and get it over with. It will take 3-5 years and that is if I don't charge anything else (which I'm not). Hopefully the credit union will approve the account and let me do a balance transfer.

[SimpleMind]

come to think of it. I never had any problems with my Credit Union Credit card. I didn't notice anything funny with them. I did have a problem when I moved out of the area and couldn't close my credit union account until the card was paid off. Usually it is no longer an issue to do banking a distance away. Back then, we didn't have direct deposit, or online billpay.

I don't use cards anymore. I am tired of the crap they pull. But, I do have very good luck with Overdraft protection from my checking accounts. Its a fairly low amount of credit line $200 to $500.00. If I have an emergency I can eaisly use it. The credit limit is usually low enough to eaisly pay it off. I think they can give you options to for $500 to $2,500.00 but I am not interested in anything that high at this time.

[boonehead]

Usually you can decline the rate increase, they will close your account and you pay off your balance at the current rate. It is best to decline the rate increase and have the account closed obviously you are carrying a balance and not paying it off monthly otherwise the rate makes no difference to you. you will get yourself deeper into debt by not letting them close the account, if you cannot pay it off at the lower rate and you continue to charge at a higher rate you will dig a deeper hole to try to climb out of.

[moburkes]

Originally Posted by boonehead

Usually you can decline the rate increase, they will close your account and you pay off your balance at the current rate. It is best to decline the rate increase and have the account closed obviously you are carrying a balance and not paying it off monthly otherwise the rate makes no difference to you. you will get yourself deeper into debt by not letting them close the account, if you cannot pay it off at the lower rate and you continue to charge at a higher rate you will dig a deeper hole to try to climb out of.

You generally don't get the option of payments once you close the account. Its also bad for your credit that the account limit is $0, but you owe $$$$$$$$$$$$$$$$$$$$$$.

[byrd42]

Just some food for thought. I borrowed from my 401K to pay off all my Credit Cards and I am paying myself back 9.5% interest. My monthly payments are considerably less and I am making money on myself.

[moburkes]

Originally Posted by byrd42

Just some food for thought. I borrowed from my 401K to pay off all my Credit Cards and I am paying myself back 9.5% interest. My monthly payments are considerably less and I am making money on myself.

I fyou lose your job or quit before you've paid it back you will need to pay it back immediately, or it will be considered an early withdrawal.