[Beetlescott]

For the first time in many years, I don't have a single credit card. Yes, they were a necessary evil at times in my life, but now, THEY ARE ALL GONE! As we paid them off, we cut them up. I have one that is closed and I can't use it anymore, but I carry my "Star Trek" card with me in my wallet.

[horatio]

Easy credit + unregulated Shylock-like bankers (double digits interest rates are the equivalent of cutting out your heart) = evil

Self-discipline isn't easy, but without it we are no more than spoiled little kids who want the candy now, now, NOW!

[Howlin' Wolf]

Originally Posted by MrQ1701

Sorry, had nothing to do with the new credit card law. This kind of thing has been happening since the credit crunch started. The law is NOT in effect yet and many banks ARE raising rates on previous balances, since the new law is not in effect yet (unless this has changed and I was not aware of it)

I had one credit card at 7.9% I put nearly all of my credit card debt on it as it was the lowest rate card I had. My minimum payments were $100 and I usually paid about $140-$150 a month on it. Then one day I see my minimum went up to $200!!! It was because my interest rate shot up to 24%!! I called right away to ask why (this was before it was all over the news and BEFORE the new CC law had been signed by Obama). I was NOT late or anywhere near over my limit, so I was confused. The answer I got was that they were raising rates because credit was tighter and that the bad economy meant they needed to make more money. Yes, the customer rep on the phone actually said that!! They needed to make more money! When I said I would NOT pay the new minimum and that I would rather default, they said I could opt out of the new terms and restore my previous rate, as long as I CLOSED the line of credit. So I did. I closed the line of credit and now it's like I have a loan payment rather than a credit card. Basically I could have kept my credit card open and paid 3 times my normal interest, but on my previous balance as well!! No brainer there!

p.s. what we WILL likely see from the new credit card law is more annual fees and slighty higher APR's (maybe 1-2 points higher). This means people that have used credit cards for all the convenience they offer like buy things online, rent cars and hotel rooms, or buy gas at the pump then pay their bill before the end of the month. These kind of CC users don't usually "pay into" the system because they don't accrue interest and have enjoyed no annual fees. Now we can expect banks to do away with this for the most part and to start charging an annual fee. I don't have a problem with this because annual fees are usually VERY low anyway (like $10-$20 per year), and the law does wayyyyyyy more to keep banks from ripping off people and does more good than harm, in my opinion of course.

The prediction was that rates would jump whether the new law was in effect or not, which it's not until February of next year I think. The banks aren't waiting that long. A friend of mine is a banker and he says policies put in place in response to the law at his bank are already going into effect.

[FranCat]

My Dad has three credit cards...only two of which he actually wants, but the third was tied to a home improvement, so he accepted it. the first one, used to be the only one. that one, he used maybe two or three times a month, and always paid off in full, every month, on time. it had no annual fee, a 5.9% APR, and he was happy with that. then, last December, he gets a letter from the card company that his credit limit has been cut in half. we call the company, they say" anyone who pays in full every month has been cut this way...we cannot afford to not earn interest on you anymore.

just as he got that letter, he was arranging to get a water treatment system for the house...it was financed through Home Depot, and how they did it was issue him a credit card with an eight thousand dollar limit, then charge the system to the card; essentially, he immediately had a card with a very high balance, that he could not even use, since it was now maxed out.

Then in February, he refinanced the house...and had the new credit card paid off as part of that deal, along with the first mortgage. This left him with two cards, one with a low interest rate, but also a very low limit; and one with a 19.9% interest rate,and a very high limit. Then he applied for a third, and got a very good deal. the third one has an annual fee of $40.00/year, a 7.5% interest rate, and a credit limit higher than the first, but much lower than the second.

Now he uses his first card for small ticket items, such as a restaurant; he uses the third card for things like hotels and airline tickets. He still pays both of these in full every month, so they are still not getting any interest from him. He does not use the second one....because it is only good for purchases made at Home Depot, and he sure don't spend that kind of money at Home Depot!

Makes me wonder just how smart those companies are, when someone can outsmart them like that...he has had three very nasty letters from Home Depot's credit card department, telling him that if he does not use his card before it is a year old, it will not be renewed...they tried to refuse to let him pay it off all at once, when we called to tell them that his first payment would pay the balance in full, barely three months after it was issued...they had set the first payment due in March, and he paid it off before the end of February. when they said they would send back the eight thousand dollar check, he told them to send it to his lawyer, who would be glad to tell them what to do with it...of course, he does not have a lawyer, but they turned tail so quick, I fell out of my chair, listening to the guy on the speakerphone! Way to go, Dad!

[MrQ1701]

Originally Posted by Howlin' Wolf

The prediction was that rates would jump whether the new law was in effect or not, which it's not until February of next year I think. The banks aren't waiting that long. A friend of mine is a banker and he says policies put in place in response to the law at his bank are already going into effect.

Well, I suppose I should have been more accurate. Sure, these things have been happening because banks are preemptively screwing people before it becomes illegal, but that is NOT the new law's fault. I am drawing a line between what banks are doing NOW and what will be the effect after it is law. The biggest complaint (criticism against the law being passed) was that credit would become more expensive for everyone since banks would lose many major income streams (due to the law itself). It's kind of funny that is the same darn effect the credit crunch was having due to the poor economic situation. I think it is obvious that banks will have to make up for some of this lost revenue, but it is very unlikely they will be able to recover all the lost revenue once the new law is in effect. Competition is a good thing and banks will still have to compete for customers. What we have been seeing lately is more connected to the credit crunch than to the new law. Even if the new law had not been passed we were going to see people's credit lines reduced and APR's go up. Banks love scapegoats. Blame the new law for "forcing" them to screw people over. The reality is the new law makes the credit card business more customer friendly and makes the fine print harder to hide. Banks are going to have to accept the fact that the credit card business will no longer be such a fat cash cow.

[Saquist]

Originally Posted by trekie

Oh my god , just got my credit card bill. The APR has gone up by more than double. My APR was 7.4 % , and now it is 18 %. Stupid banks. So I called the credit card company. all they could do was keep it at what it was before aslong as I do not use it . My Bank was the one that upped the rate. I have great credit. I can't belive this is happening to so many people. Just to think of all those who don't even have ajob and this happens to them also.

That's why it's best not to live off credit cards or better not to have one.

[MrQ1701]

Originally Posted by Howlin' Wolf

The prediction was that rates would jump whether the new law was in effect or not, which it's not until February of next year I think. The banks aren't waiting that long. A friend of mine is a banker and he says policies put in place in response to the law at his bank are already going into effect.

One more thing, these things were happening before the law even passed through Congress. If this stuff starting happening AFTER Obama signed the bill, then using the law as an excuse would have held more water (even without the law being in effect).

[MrQ1701]

Originally Posted by Saquist

That's why it's best not to live off credit cards or better not to have one.

Unfortunately credit cards have almost become a necessity. It would be very difficult to take a vacation without one. Somewhere along the line you have to use a credit card just to make reservations for things like hotel rooms and rental cars.

it should be obvious that living off of credit, not just cards, is NOT a good thing. Sometimes crap hits the fan and people are forced to do so, then the spends years trying to recover from it. Banks are now being told to do business in an open and fair way. That's why they are crying so much.

[Commodore]

I have two credit cards. One I use solely to pay my intenet provider (long story) and the other for mostly online purchases or the few instances when I'm running low on cash.

What keeps me out of trouble with both cards--my balances are zero at the beginning of each billing cycle and I don't pay any kind of maintenance fees or whatever--is that I really prefer to use cash more than anything and that I am inherently a cheap bastard to begin with.

[MrQ1701]

Originally Posted by Commodore

I have two credit cards. One I use solely to pay my intenet provider (long story) and the other for mostly online purchases or the few instances when I'm running low on cash.

What keeps me out of trouble with both cards--my balances are zero at the beginning of each billing cycle and I don't pay any kind of maintenance fees or whatever--is that I really prefer to use cash more than anything and that I am inherently a cheap bastard to begin with.

Don't be surprised when you find you are forced to pay a maintenance or annual fee. It's going to happen. Banks were able to offer fee free services because they were making tons of money elsewhere. This will not be the case as soon as the law takes effect next year. Personally, I think a small fee would be reasonable in order to have the convenience of a card.