2008 Consumer Action Credit Card Survey Declares Credit Cards 'Really !@$% Evil!'

Credit cards are so much worse than you thought, according to the 2008 Consumer Action credit card survey. Creditors have carte blanche to do pretty much whatever they want, including randomly changing terms, conditions, and rates, even to cardholders with perfect payment histories and pristine credit scores.

From the survey:

  • 77% of surveyed credit card issuers (17 of 22) answered “Yes” to the question “Can you increase my APR or change my terms ‘any time for any reason’?” This includes all Top Ten issuers – even Citibank which pledges not to change a customer’s terms before the card’s expiration date.
  • Bank of America, Chase, Citi, American Express and Capital One all reserve the right to change rates without notifying consumer in advance.
  • Representatives for Bank of America, Capital One and Citi cited “market conditions,” “the economy,” and ”business strategies” as factors that might cause an interest rate to increase.

Consumer Action also identified several practices that will seem all too familiar to many of us:

  • As consumers pay off large balances, creditors slash credit limits so that the balance is always close to the credit limit.
  • Credit limits are reduced to levels lower than the current balance, triggering over limit fees and requiring a large “balloon” payment of the over-due amount. This practice also puts the consumer at risk of being hit with a penalty interest rate.
  • Cards are declined at the point of purchase, and only then do cardholders find out that their limits have been reduced with no warning.

When asked to comment on their practices, several creditors responded: “Brahahaha!”

2008 Credit Card Survey [Consumer Action]
(Photo: Getty)

Comments

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  1. Shadowfire says:

    “Credit limits are reduced to levels lower than the current balance, triggering over limit fees and requiring a large “balloon” payment of the over-due amount. This practice also puts the consumer at risk of being hit with a penalty interest rate.”

    I don’t see how such a thing could ever hold up. I mean, yea they could lower your limit, but then you’d just never use the card and pay it off as you were before. How could they hit you up for over-limit penalties and the like, and have it hold up to legal scrutiny?

    Or is it just a matter of people who don’t fight them..?

  2. Jevia says:

    I’m really amazed that our government hasn’t imposed any regulations on this industry. But then, it only affects the “little people” not the wealthy or corporations. and I’m sure the credit card industry pays lobbyists, and through them, congress, quite well.

  3. Jesse says:

    The survey just lists what a card company can do vs. what they actually do.

    Another thing that fails to be mentioned most of the time is that these things are not materialized out of thin air but are listed, albeit confusingly, in a contract.

  4. Jesse says:

    @Jevia:

    You have to realize that these are unsecured credit lines and that banks are just trying to minimize risk. I don’t see anything wrong with that.

  5. lukobe says:

    OK, yes, credit card companies can be pretty nasty, and a credit card in the hands of someone who doesn’t know what he’s doing can be a very dangerous thing, but for someone like me who pays off his balance each and every month without fail, they’re extremely convenient. So I wouldn’t call them evil, necessarily.

  6. PølάrβǽЯ says:

    Yet another reason to NOT use credit cards, even though the Consumerist always suggests to use one to protect yourself. That protection though comes at a price, and you have to ask yourself: is it worth it?

    Is it worth it to pay interest and possibly be subject to lame practices like jacking your interest rate for no reason or for universal default, or lowering your credit limit to below your current balance just to have the ability to issue a chargeback instead of dealing with a lousy merchant yourself?

    I say hell no. I’m a big boy, I can fight with a merchant myself if I have to, and I don’t have to worry about magically changing due dates or interest or universal default.

  7. johnva says:

    @aaron8301: I don’t ever pay credit card interest, and I use them for everything.

  8. madanthony says:

    @aaron8301:

    Is it worth it to pay interest to get chargeback protection? No. But it is worth it to use credit cards and pay off the balance in full, and thus get all of the benefits and none of the costs.

    I use Amex Blue Cash for most of my purchases, with a Chase Freedom card for places that don’t take Amex. I get cash back from Amex, which usually ends up being a few hundred bucks a year. I’ve only had to use chargeback protection once for a minor amount, but I did like that Amex called me about fraudulent charges when my number got stolen somehow, and that it wasn’t my actual money that was stolen.

    Credit cards are a tool, like a hammer. If used the wrong way, like to hit someone over the head, hammers are bad, but they can also build beautiful houses.

  9. floraposte says:

    Another happy credit card user here. Not that I think it’s because the companies are so wonderful, and I keep wondering if they’re going to cut off my “deadbeat” account, but between two different cashback cards and several partner deals with places I regularly shop, plus the float through the month, using credit cards genuinely saves me money. If you pay off the balance every month, keep the use to an amount you can do that with even if they change the rules on you, and keep your eye on the account, it can be well worth it.

  10. timmus says:

    I think there’s a lot of benefit here in aggregating all the information on who are the asshole credit card companies and which ones work to provide good service, and publish it far and wide. The banks are more vulnerable than ever to having their names dragged through the mud. Maybe this is one situation where effective consumer advocacy might leverage business practices.

  11. Chaluapman says:

    @Jesse: There’s a difference in minimizing risk and screwing over people just cause you can. if they were worried about risk, they wouldn’t issue cards to dogs and babies, and the process would require much more than just entering some information on a website.

  12. bdgw7 says:

    So what do you do when a credit card company sends you a letter canceling your account because of “inactivity”. I don’t really care about the card – since obviously I wasn’t using it – but how do I prevent this from being a bad thing on my credit report?

  13. The_IT_Crone says:

    @epd: I wish that had happened to me. It took me SEVEN YEARS to get MasterCard to close my account. The worst part was that even though I moved several times in that timeframe, they kept sending ACTIVE cards to my original address.

  14. Dabigkid says:

    Thanks, Consumerist. I’m never getting a credit card Bank of America, Chase, Citi, American Express or Capital One.

    @aaron8301: Dude, credit cards are a wonderful convenience if you’re a good spender. First, they let you collect interest in the bank. Second, you get bonuses. My BP Chase card is awesome. You just need to be a good spender.

  15. Dabigkid says:

    @Dabigkid: Irony.

  16. dragonfire1481 says:

    A key problem is contracts are not in written in language most people can easily understand so people really don’t have a clue what they are signing on for. It would be helpful if some of the “key points” of the contract were summarized up front but of course that would never happen because then companies couldn’t get away with their dirty tricks by burying them in document.

  17. Jesse says:

    @Chaluapman:

    No, if the card companies were really worried about risk, then they would make all credit debt secured. You would have to back up your credit line with collateral.

    The very rare instance of issuing credit cards to babies and dogs is a completely different topic than the mechanisms employed by credit card companies to reduce default risk.

    Again, just the fact that they CAN doesn’t mean it is normal practice.

  18. sabrinad says:

    “As consumers pay off large balances, creditors slash credit limits so that the balance is always close to the credit limit.”

    Seriously? I’ve never had that happen. When I was deepest in debt, they would always raise the limit to let me keep digging myself in. Once I paid them off, they all left the ridiculously high limits in place. In fact, I just realized earlier today when going over the terms online, one card which I’ve had a zero balance on for a while now, they just randomly raised my limit for no apparent reason. While my credit rating is better now it’s by no means fantastic. I really think they just expect me to get another shovel and start digging once more.

    I’ve only ever had one card lower the limit on me, ever, and that’s probably less due to incisive banker wisdom than the fact that they went through sixty billion acquisitions and have been staffed by a random selection of incompetent baboons at each successive bank. And boy did they miss the boat on that one — that was *before* I wound up in debt, so they totally could have had beaucoup interest rolling in. Ah, sweet irony!

  19. InThrees says:

    @Jevia: I’m pretty certain all the credit card companies are careful to not do these things to senators and congressmen.

    I’m also certain that these companies are funding some very lavish lifestyles for an army of lobbyists. Doing the math here… No, I don’t see congress taking an invasive interest any time soon.

  20. GearheadGeek says:

    @Jesse: Reducing the credit line after the card holder pays down a large balance could be construed as simply reducing risk. Reducing the credit line of a cardholder in good standing from somewhere above the current balance to a figure BELOW the current balance, followed by charging over-limit fees and raising the interest rate to a penalty rate is predatory behavior.

  21. Dobernala says:

    @The_IT_Crone: Well unless I am mistaken, MasterCard doesn’t issue actual credit cards. Banks do.

  22. mythago says:

    The folks talking about how you just need to be a good spender must have missed many news stories about credit-card issuers jacking up insurance rates for the thinnest of reasons – for example, because some OTHER company issuing you credit claims you were late with a payment.

    Whether or not it is ‘normal practice’ kind of avoids the point that it is something they can do, and have done.

  23. ageshin says:

    There used to be a song called, ‘mother has a hole in her arm where all the money goes’. We have been addicted to credit by the banks for the last fifty years. True, credit is useful when we want to buy a car or home, but the notion of credit has been expanded to horrendous preportions. We have been sold a bill of goods about credit, and we are paying the price for it. Credit cards are simply a means for the banks to extract money from you. You pay them whether you pay off your balance or not. I suppose that the ideal case for the banks would be if you just sent them your pay checks, and they would give you what they think you could live on. Credit cards might be useful if the government would impose usury laws and other restraints on them, thus insuring us a even playing feld. What we see today is a vast racket making the cosa nostra’s loan sharks seem like guppies. Remember the banks have given us the housing crash, and have in general promoted polices that are turning our country into a third world basket case.

  24. Lordstrom says:

    I agree in spirit that credit cards are evil, but the idea of using debit for online purchases scares me.

  25. “Credit limits are reduced to levels lower than the current balance, triggering over limit fees and requiring a large “balloon” payment of the over-due amount. This practice also puts the consumer at risk of being hit with a penalty interest rate.”

    I frequent financial forums and I have never seen that happen. I have no idea what it is doing on some sort of official list. They do sometimes drop your credit limit above your balance (when you are flagged, properly or not, as a risk), and then when people add new charges to their card it can sometimes go over the new limit, but they do not reduce your limit under your current balance (unless they close your card). And even if they did, I would be amazed if they had the balls to try and assess an overlimit fee. That is a lawsuit waiting to happen.

  26. forgottenpassword says:

    Meh, my expectation from credit card issuers is that they are going to do every dirty, underhanded, sneaky thing possible to screw you out of your money. I learned that a long time ago (thank you capital one for the valuable lesson).

    IMO the only good/safe way of using a credit card is for the convenience & reward programs. ANd pay it off in full every month. That’s the way i use mine.

    Drop my credit limit?, fine… dont care, jump up my interest rate into the twenties because I was late turning in a library book?, fine… dont care. Because I dont spend more than $600 a month on average & keep no running balance anyway. DO your worst evil credit card companies!

  27. forgottenpassword says:

    @forgottenpassword:

    Oh . I forgot to add…. pay the credit card off as soon as you get the bill.

    And if you dont have some emergency money in a savings account to fall back on….then I believe you shouldnt be using a credit card.

  28. TechnoDestructo says:

    @forgottenpassword:

    If you’re going to do that, and want to make (closer to) sure you’re safe:

    Don’t go paperless. You won’t get any notification of rate changes or (intentional, random, frequent, and unnecessary) payment due date changes (designed to make SURE you can’t pay it off on time every month).

    And you’ll care if they see you spend 600 dollars, and drop your credit limit to 500 bucks.

    Even if you’re careful, you CANNOT trust many card issuers.

  29. doctor_cos wants you to remain calm says:

    @Jevia: I am not at all surprised by this. The Office of the Comptroller General is the gov’t oversight for these institutions, and they are squarely in the back pockets of the banks and CC companies.

    It’s bipartisan apathy and/or greed – your gubbamint at work.

  30. ckaught78 says:

    Here’s a novel idea, don’t use a credit card. Pay cash. Now that millions of Americans can’t use their houses as an ATM card any more, they are resorting to the next thing iin their wallet; their credit cards. At least the mortgage industry has some type of collateral in the form of a borrowers home, but with credit cards they do not have that and as more and more people start defaulting on their credit cards, we are going to see a situation that is far worse than the housing collapse.

    We need to stop relying on borrowed money and start saving. If you don’t like the terms of your credit card then don’t use it.

  31. OneQuietDave says:

    My credit union issued MasterCard has an agreement that is only two pages long and in type that is actually readable. I know exactly what they can and can’t do and it isn’t in legalese (or creditcardese). Deal with a decent lender and you will be treated decently.

  32. bonzombiekitty says:

    To an extent, I can see the point of the CC companies’ argument that they need flexible terms. The financial situation of a card user can change very quickly and they should be able to protect themselves from that. That said, I don’t think they should change the terms without notice except for extreme situations – i.e. they find out the card user has defaulted on every other line of credit or something.

    That said, since I don’t get anywhere close to my credit limit, and I (almost) always pay my bill in full every month, the only term changes that effect me are when they change the rewards structure. I can’t really blame them for changing the rewards on me, since I’m not exactly a profitable customer. Other than my rewards structure, the only changes they’ve made to my card w/o me asking is to increase my credit limit.

  33. mike says:

    does anyone have an AmEx charge card? Is that any better?

  34. dragonvpm says:

    @Jesse: No, they’re trying to maximize their profit. As the current economic meltdown is repeatedly showing, minimizing risk is more of an after thought once they make as much money off of their victi customers as possible.

  35. mike says:

    @dragonvpm: There is a fine balance between risk and profit. Historically (and currently), credit card companies are punishing customers who always pay their balance in full by increasing their rates. Obviously, if the customer continues to pay off the balance every month, then this isn’t an issue. But this often coincides with changing the billing cycle so that the customer is caught off-guard and is charged interest.

    They reward customers that carry a balance by increasing their credit limit.

    More and more, society punishes those who do things right and rewards those who make poor decisions. It only encourages me to take out bad loans and just be finacially irresponsible.

  36. TouchMyMonkey says:

    @lukobe: That’s the key – if you PAY THE BALANCE EVERY MONTH. Lots of people don’t, particularly after having bought some big-ticket item like a plasma TV, or in my case, a pellet stove. In my case, that purchase went on another card with a 0% rate for a year. If you’re running a revolving tab, you’re asking for it.

  37. ColoradoShark says:

    @lukobe: And your responsible behavior is rewarded at the credit card companies by labeling you a “deadbeat”! They just get to keep the merchant fees from your purchases but they get no interest payments.

  38. A.W.E.S.O.M.-O says:

    @ckaught78: “If you don’t like the terms of your credit card then don’t use it”

    You’re completely missing the point. You could have a balance governed under a certain set of terms which are okay to you, but then the CC company can change any of the terms and retroactively apply them to that balance. And let’s be realistic here. You can’t just use cash for everything in life. I see nothing wrong or irresponsible about putting something on a credit card if you’re willing to pay the interest rate. I can understand the company changing the terms and then saying that any new charges after your notification are going to be affected, but that’s not the case.

    I wish I could use their argument against them…”Due to current market conditions, I am only going to be paying 3% interest on my balance.”

  39. floraposte says:

    @mythago: Speaking for myself, what I’m saying is that I currently find using credit cards to be a benefit, and that I keep track of things enough that I won’t be hugely inconvenienced by ceasing to use them if they stop being advantageous. The companies do what they can to make it unprofitable for the user and profitable for the company–the fact that some of us use them profitably doesn’t mean that’s not true, but the fact that the companies will take advantage when they can doesn’t mean that a card can’t be used profitably.

  40. Jesse says:

    I’ve paid the balances off on my cards for years. The punishment I have received includes increased credit lines and low interest rates.

    I look at my situation when reading these articles and think that card companies are so bent on screwing the consumer that I should have about a $500-1k (instead of 6-18k) limit on all my cards with an 18% variable rate. I am obviously too responsible for favorable credit terms.

  41. MitchV says:

    A few facts:

    Credit cards exist because they are *extremely* profitable. Major retailers now offer them and in many cases, it is now the most profitable part of their business.

    Studies have shown that people spend MORE when they use credit cards.

    Even if you pay off your balance in full, the banks make money off of transaction fees. Those fees (typically around 3%) are built into most everything customers purchase today – you just don’t see it.

    Late fees and charges over the credit limit are wildly profitable. Once a consumer is lured into credit card debt, it’s easy for them to get into the 30 year plan where they only pay the minimum balance. This is a banks dream scenario.

    If you are married and your spouse gets a credit card in their name, YOU are responsible for the debt as well unless you jump through a few hoops soon after the credit card is issued.

    Most transactions with a 90 day same-as-cash promotion are not paid off within 90 days. Retailers feed off of this type of credit card promotion.

    Opinion:

    All-in-all, credit cards are a *really* *really* *really* *really* bad deal for consumers. American society has taken the bait and I predict that credit card use during this century will be viewed in a very negative light by future historians.

  42. ckaught78 says:

    For most credit card companies it is about maximizing profitability while balancing risk and reward. As charge-off rates increase, banks need to reexamine their risk models, which include interest rates and fee structures, and adjust accordingly. If a credit card issuer only marketed to and opened accounts for people with 800+ fico scores, they would make very little money and very few people apply. They know there are going to take losses, so they need to figure out how fard down the bucket they can go and still be profitable.

    Now I agree, if you are going to increase someone’s rate or lower their line, then they should be required to inform the customer beforehand. A bank can’t lower your limit to less than your balance and start charging you overlimit fee’s. It may happen on occasion with some of the more shady operations, but you will rarely see this from your big institutions. There are also regulations in place to limit negative ammortization. You may have noticed a few years back that minimum payment requirements changed and thus increased. Some people complained, but this was done to fix a problem.

    And for those of us that pay in full every month and never carry a balance, the bank still makes money off us with interchange fee’s. They don’t make as much as they guy carrying a balance, but they do make some. Banks know how profitable you are and have models that will predict how profitable you are going to be from day one.

  43. AceKicker says:

    I’ve had one credit card in my life, and it’s since been discontinued. I hit some rough times coming out of college, and put up a small debt, and once I finally paid the thing off I never reapplied. I’ve been using a debit card ever since.

    However, lately I’ve been thinking that I should have one for the extra consumer protection it offers. But even if I go in with the intent of paying the full balance every month, the power credit card companies wave over you is intimidating. Does anyone know where one could find a simple card that is low in evil?

  44. pandroid says:

    Well, that’s just more stuff to add to this list: [redtape.msnbc.com]

  45. ratnerstar says:

    @AceKicker: I did the same thing. After finally paying off some dumb credit card debt from college, I swore the things off for about five years. About a year ago I decided to get back into the CC game, both for the added protection and the rewards.

    I don’t have any low evil recommendations, but here’s the trick: credit cards only have power over you if you use them irresponsibly. Yes, that’s a big “if.” But if you’re careful with your spending and scrupulous about paying off your balance, you can get a CC from Satan himself and not worry.

  46. pastabatman says:

    @floraposte:

    You know, I think about that too. I pay off every month and they raise the limit and lower the interest rate. I keep wondering: “when are they gonna get sick of me?”

    My guess is, they play the broad odds. They are waiting for me to NOT pay the full balance due to say a hiccup in my financial well being (loss of job, medical etc). Even if i need to pony up to fees and interest for only 6 months, I bet they mucho profit from all the years i “screwed” them paying it off.

    It must be simple math (on a broad scale). X% of “deadbeats” will need to ride their credit at some point. We still come out ahead even though “Y%” of deadbeats never fall behind.

    If this were not the case, deadbeats would be booted for sure.

  47. ohiomensch says:

    @linus:

    I have an amex card. It used to have a $25K limit. I was laid off for 9 months and was not late and missed no payments. I missed a gas card payment ($13) and the GC reported it. Amex lowered my credit line and raised my interest from around 9% to 17%, I just recently had a payment to amex missed because I scheduled a payment through their website and the payment did not get made, even tho I called them they said I did not make the payment. They lowered my limit to $500 below my current balance, and increased my interest rate to 27%. When I told them what happened at the website, they all but called me a liar. However, they told me that they will not charge an overlimit fee the first month since they were the ones who lowered the limit. Nice.

  48. pastabatman says:

    @ohiomensch:

    actually as per my reply to another poster above, ohiomensch’s post is case in point.

    once a crack appeared they aggressively go for the throat and bleed out their losses from when ohiomensch paid everything perfectly.

    THIS is the risk of credit cards. Responsible spending and paying off is just a PART of the whole. One or two missteps, and that “rewards” card you love bites you in the ass.

  49. bilge says:

    @aaron8301: When you use a credit card, you’re using someone else’s money and that’s worth it for me. I’d rather have a fraudulent transaction hit one of my credit cards than one of my debit cards.

    Also, you can get some freakishly good offers from various credit card companies. I did some home renovation a few years ago and instead of getting a HELOC, I tossed it on a credit card and then transferred it to another card at an interest rate so low that by the time I’d paid it off, if I’d gone the HELOC route, I would have spent nearly a thousand dollars more in interest and fees.

  50. bilge says:

    @AceKicker: I’ve had credit cards from all of the evil companies: Bank of America, Citibank, Chase, MBNA. And some of them have been at some pretty outrageous interest rates.

    But I’ve always paid the balance off on time and completely, so I’ve never had to deal with any of their evilness. I’d recommend something from Citibank mostly because they have one of the better websites and also because they were really helpful when I lost my wallet and a few charges hit my account.

  51. Ken says:

    My chase interest rate is 5.99 Fixed and another one is 7.99 Fixed. They gave me a total of 30,000 limit. I’ve setup so that if I ever forget to pay, they will automatically withdraw the minimum payment amount from my account. It’s pretty nice actually because I have not missed a payment.

  52. dragonvpm says:

    @linus: I don’t know that they’re really making it easy for people to do the “wrong” thing financially (i.e. take on a debt and abandon it).

    I know we all read about the whole aid package for people with bad mortgages, but until we see some numbers of how many people benefited etc… I’m not convinced that a lot of aid type packages for consumers aren’t just a lot of hot air for out benefit during an election year.

    For a while now, my impression has been that they’ll maximize profits at the expense of security because it’s worth it for them to lend 100 people some small-ish sum with a relatively high interest rate even if 10 of them default. They’re doing their math and we’re all paying for it.

  53. Coelacanth says:

    @sabrinad: Bank of America’s slashed my limit on the same card twice once I started to send in large payments to clear off my balance.

    I already avowed never to use the card again for any new purchases, so it doesn’t affect me, but it is a slap in the face for dinging my credit score for being “responsible” with credit.

  54. eternaluxe says:

    @Ken: I had the same setup for my CapOne card. I knew the minimum so I set up auto-payment. Every month, the minimum went down a bit, so I was payinf *that* much more than the minimum. Then CapOne jacked my minimum and hit me with a late payment fee. !!!
    Don’t rely on your auto payment, people! Read your statement every month just to be safe.
    I’m willing to bet that there is a little computer program in their accounting dept that looks for this particular payment pattern just to whack you.

  55. Bahnburner says:

    A wise man once told me credit cards are the payday lender of the middle class. How true.

  56. mythago says:

    But if you’re careful with your spending and scrupulous about paying off your balance, you can get a CC from Satan himself and not worry.

    As has been pointed out repeatedly, Bank of Satan can jack you around no matter how careful you are or how scrupulously you pay off your balance. Yes, being careful HELPS. But it is no guarantee.

  57. stinerman says:

    @forgottenpassword:

    If you have any savings whatsoever you shouldn’t be carrying a balance. It makes zero sense to have $5000 sitting in a savings account at (lets be generous) 2.9% while your Capital One card has a $3000 balance at (again, being generous) 8.9%.

    If you’re carrying a balance then your card is your emergency savings.

  58. anatak says:

    @aaron8301:
    No. Not worth it. We don’t use credit cards and none of this stuff ever even enters into the realm of possibility. They don’t even have the opportunity to F with us, and that’s pretty darn cool.

  59. trujunglist says:

    I wish I had my shit together like all of you do. Maybe if I wasn’t fucking poor…

  60. aaronw1 says:

    I think credit cards are merely a tool. Like a hammer, or a gun, or a crowbar. It’s up to you to use them responsibly. I pay off my balance in full every month and have gotten nothing but rewards from my credit cards. Am I perhaps ‘buying more’ than I would without it? Maybe… but I’m sure as heck not paying them anything extra for the privilege. I have items in my google calendar for a few days after the statement closes on the two cards that I use and I go online, review the transactions, and schedule a payment and forget about it. In fact, I have a 5% cash back gas/groceries card from Citibank. They last year dropped the rewards to 2%. I called them up to cancel it and they gave the 3% back to me for a year.

    Responsible credit use means that you win, but you have to be aware of what’s going on.

  61. olegna says:

    I’m surprised that there are so many people that think paying off their balance before the next billing cycle is the wisest use of credit. In fact, if you pay off your full balance before the billing cycle ends, it doesn’t show up on your credit report so you aren’t getting the advantages of being responsible in relation to your FICO score (yet one of many evil tricks of the CC industry — you MUST carry balance to have the activity register).

    I alwasy pay my full balance MINUS $50 before the end of the billing cycle so that the purchase and payment actually count on my credit score.

    Unfortunately I have to pay the interest on $50 to get the benefits of being responsible, which is a minor but annoying fact.

    By definition consumers should be ambivalent at best about credit cards. Anyone actually stupid enough to defend this system doesn’t seem to fully comprehend the long-term damage to America and its economy that this loose credit system has done.

    • Anonymous says:

      @olegna:
      I am not sure from where you are getting your information but paying off your CC balance every month in full is the best way of using a CC. You do NOT need to carry a balance for the activity on the credit card to be reflected on your credit history. The idea you you should carry a balance is wrong, very wrong. Markers for calculating your FICO score include debt to income ration, amount of available credit, amount of time credit is held, type of credit. Carrying a balance does nothing but hurt the consumer by having them pay interest. I hope you begin paying off your credit card balance and stop believing you need to carry a balance.

  62. Anonymous says:

    Its unfortunate but true, CC companies can change the terms including APR or credit limits an any time for any reason, even though if don’t make any real sense (at least not to the consumer). However, by law, a CC company must notify the consumer of any change. The lowered credit limit is probably a closer reflection of the economic times rather then the behavior of the consumer forced to pay for it. Banks are running low on available cash to lend or becoming too scared to lend. The bailout package designed to give money to banks to alleviate this problem unfortunately contained no provisions to actually force the banks to use for any of it for lending and so many have decided to hoard it in order to tighten up their balance sheets.

    There is little a consumer can do other than being careful of reading every statement and to catch any changes and being very vocal with the CC company to try to get terms changed.

    I hate to say it, but in many ways this situation is a result of the spending behavior the nation has exhibited over the last several decades. We have been living on borrowed money for a long time and we are now too over extended and something has to be done. I’m not saying these aggressive tactics taken by the CC companies are the answer, but in some ways their hand has been forced by the public who have all been to willing to purchase on credit for many years.