I just saw a discussion on another blog where about 6 people reported getting BOA rate increase letters. Credit card companies are trying to boost their cash reserves, I think. Probably Citibank next.

If it's at all possible, he should look into rolling that balance onto a lower-rate card.

yeah capital one sent me a letter saying I was going from 14.99(which is still fucking high) to 24.99%.
I said eat my ass and cancel my card.

Ugh. I'd never think I'd be saying this...
but FIA was much much less of a headache to deal with back in the MBNA days.

Look up a company called "Cash Call". Their endorsement is gary coleman and their APR is 99.5%

@mwdavis: I got one of those on my BoA visa... it shot up from 7% to like 19%. I cancelled immediately.

I, as well, got a letter yesterday about this. I was going to submit it to Consumerist, but I thought I'd wait for someone else...just so it wasn't me for some odd reason.

But, yea, it was completely f*cked. We sent the rejection letter off this morning.

7.99% to 21.99%? Don't tell to many people otherwise everyone's going to want that rate.

I got one too. I guess they figure that with people having less money due to the recession now would be a good time to screw them.

I don't carry balances on any of my cards, but the rate-jack notices bug me, too (I got one from Capital One last year). I haven't cancelled the card, because I've had it for so long that ditching it would ding my credit rating, but I haven't used it since they raised the rate to > 20%.

One of our cards did this to us a couple of years ago and jacked us up to 29%! They decided we had too much debt, even though we were making more than min payments. We saw that if this company was going to do this to us, so would every other card we had. So, what did this prompt us to do? We went with credit counseling and got that interest rate down to 5.9%, even lower than the 10% we originally had. So, they lost money on the deal. Kind of stupid if you ask me. We ended up saving a whole lot of interest payments across the board. We had a plan in place to pay off the cards within 2 years anyway, so this just made that easier.

Not sure if I was one of those with a "high balance" and thus a "high risk", but I paid half my Amex Blue card balance and immediately my rate went down by a third of what it was, which is still not great but it shows that they probably do pay attention to your balance. The cash infusion that the payment came from was a low interest student loan. This was probably the best financial decision I've made. It seems that their high interest rates make you feel nearly helpless with trying to pay off high balances.

I don't care if you have to sell off your computer, furniture, tv...credit card debt=financial death. Like many others I paid the price shortly after leaving college, I was late with a payment and my interest shot from 7.99 to somewhere around 24. I hated how much of my payment went towards just the interest. I transferred it to a new card for the lower temp rate and worked my ass off to get rid of that debt.

Now I pay in full every month, and throw money into savings for those emergencies we all have.

What they REALLY want you to do is transfer your balance to another card so they dont' have to bother with you anymore.

At least you got notification.

Fuck you, Chase.

@alice_bunnie:
They saw you had a lot of debt and were making more than the minimum payment, so decided to bleed you while they could.

I got a similar letter from BOA but it said my promotional rates would still apply. They'd better, because my rate is currently 0%.

I haven't recieved a letter from BofA regarding a rate increase, they just took it upon themselves to do it. I started out with a 4.99% which went up to 9.9% and stayed there for 5 years. Just a year ago they made it almost 20% for no reason. I have had no late payments, usually keep a 0 balance, just had to use the card to purchase my Wii. Thats when I found out it was almost 20%. When I called to complain they told me I'm lying that the computer says it's always been that high. I told them about my bills that say otherwise and they got quiet and asked if I wanted to cancel.

They make no money off of me with the constant 0 balance I maintain. Now I just use it for groceries and other small errands and pay it off right away.

You think 20% and over is bad, BofA jacked my husband's interest rate to 131% after the balance was paid in full. That makes me wanna use it to buy me a Gawker t-shirt!

I received the same rate increase from FIA, I charge about 2K a month, but I carry no balance. At the end of the month all gets paid. I really don't care about the increase, but if I carried a balance it would have been an issue. Looking at the rates for cash call, I almost find it difficult to believe that anyone in their right mind would even consider a loan from then:

Georgia:

$1,500 Loan Product
$1,000 Borrower Proceeds
$500 Loan Fee
141.42% APR
12 Number of Payments
$159.83 Payment Amount

er, why don't you write and reject the amendment?

I got a letter from BOA yesterday taking my card from 14.99% to 27.99%! I'm about to write them to dispute (and shove it up their ass) and cut the card up so as not to be tempted to use it while I pay it down.

WHen I read this I'm glad I pay my balances in full each month.

Ehh, me too. They upped it to 27.99%! I was frightened, but after calling them, they made it sound like by rejecting the Amendment, I wouldn't have to worry about the rate hike.

On a side note, they said the reasons were that I carried a "high balance" and only made minimum payments. I haven't made any purchases on the account, ever (except a BT). Well, I was busy paying off a higher-rate card (Capital One) and submitting the minimum on the rest.

Could the "debt snowball" strategy actually jeopardise one's rates for paying off debt in this manner?

Citibank will soon have a $0 balance. Guess who's next? :P

To get help with my credit card debt, I use this service called Credit Card Zappers.

They have been able to reverse my interest charges.

They've been doing this stuff for some time. At least she was smart enough to look at the rate increase. Who here hasn't gotten some credit card amendment that's written on tissue paper, is 4 pages long and written in 7 pt type and red lettering on a white background? Those guys actually higher marketers to figure out how to mail this stuff out and to make sure it doesn't get read.

I just got one of these for my BofA Visa (which, admittedly, has a high balance as well). They're jacking me up to 24.99%! I'm going to re-read that letter and do my research, but I'm very tempted to send off a rejection letter. Asses.

Wow... Bizzaro Finance strikes again. The Fed lowers the prime rate, card companies jack up their rates.

I agree with MWDavis. The banks are already hurting from the housing burst and they are noticing many of their card holders with high balances now defaulting on the cards. So the banks are trying to bump down the default rates by convincing people to take their business elsewhere.

To all the posters that commented on:
6 Reasons To Keep More Than One Credit Card
[consumerist.com]
and told me I was a nut for not trusting credit card companies - here's your proof.

I found the documentation I made at the time. CHASE tried it on me. Going from 8% to 21% for no reason other than they wanted the money. I could send them a letter, opt out... and still keep the account open.

They wanted to milk me, but they apparently didn't want to lose me as a customer. Asses.

I had it happen to me just 1-2 months ago. I ended up doing a balance transfer to another card. Will end up paying that one off when I get my taxes back.

Just another way CC co.'s try to take advantage of customers. It's incredibly underhanded and yet somehow legal. Checkout Gotcha Capitalism by Bob Sullivan. He talks about this tactic among many, many others that companies try and pull. It's really eye opening and makes you wonder why we live in such "fine print" and "hidden fees" society.

@bdslack: I never said you were a "nut". I just said that having a credit card was almost a necessity today. And it is,but they are certainly making it harder to use one. They are scalping us with the interest. I suppose they are trying to get their $$ before the credit cards have a melt-down like the housing mortgages did. Or maybe hey are trying to become a little more solvent because of their sub-prime mortgage follies by getting higher credit card payments

I just have to say that approx. 15 yrs. ago, we found ourselves in major trouble with credit cards. I unexpectedly lost my job (downsizing) and had several cards with high balances. We ended up cutting up the cards, paying off the balances as soon as possible. We've not had a CC since.

If we don't have the money for something then we don't buy it. We've had some close calls with money shortage, but we've always managed to get through it. If you ask me, CC's are an unnecessary evil. My debit card works for everything I need.

All this outrage has resulted in one thing: anyone who can afford to pay off their balance is doing so-- eliminating high-risk debt from the bank's already hemorrhaging sub-prime mortgage portfolio.

Consumers who do a balance transfer is effectively doing the same thing-- eliminating the bank's (admittedly lower) risk. The bank providing the transfer gets a chance to review the incoming investments, and since those borrowers have the financial sense to do a balance transfer, they are probably less of a liability than the guy the bank is now squeezing a payday loan out of.

My guess is that the dispute letters are a method of separating the good debtors who manage their finances, pay attention and read the small print, from the more oblivious higher risk clients.

I haven't seen any letters yet, but I don't have an account with any of the banks anyone else has mentioned. I use Discover (10.9 fixed, promo 1.9) and WaMu (8.75 fixed)

I haven't gotten any letters about increasing rates but I keep getting those "checks" from an old BOA card I never use for 0% balance transfers--guess that's how they suck people in, with these checks and then they hit you with the high rates.

On the plus side, I bet this rate will cause this guy to quickly try to pay off this debt.

@TWSS: Yeah, I wish they wouldnt sent those notices out.

We haven't had a balance on our BOA card for over a year. We got a notice saying that if we didn't use our card, our rate would be going up to 20.99%! Um, 20.99% of zero is still zero, but we're not sure if we should cancel the card over this tomfoolery or if that would somehow ding our credit, since we've had the account for a long time. Yes, rejecting a threatened rate increase on a card we don't use could possibly ding our credit. The mind reels.

If you tell them that circumstances are tightening up your budget and you would like them to lower your interest rate, it raises the red flag of default! So, they will jack your rate to make the most money on you that they can before you are no longer able to pay them.

What drives me crazy is talking with people that have such loyalty to these unarmed bandits because they have "had this credit card for years". All that tells me is, you have just admitted to being a real sucker.

Interesting how they will change your interest rate on existing balances when they want more money, yet not lower the rate on the same balance when you negotiate a lower rate.

Be afraid of credt cards, be very afraid!

@deweydecimated: Just keep it for emergencies, and make sure that if you do use it, you pay it off by the due date - that way it doesn't matter what they charge you for interest. It can actually be a good thing to have some unused revolving credit on your credit report.

Citi Charged me a $.50 "minimum finance charge" because I was responsible and did not carry a balance over from last month.
I have an FIA card, and if they're gonna treat me like that as well, I finally can cancel them and get an AmEx.

I currently have three "idle" credit cards because of this very situation. Over the last year, they all tried to sneak in rate hikes, and I declined per their instructions and shredded the cards. What pisses me off is that they continue to (a) raise my credit limit, and (b) send me those damn "convenience" checks, in an effort to entice me into using the cards, even though I'm not supposed to! (For the rich folks out there: I don't just pay them off because I can't afford to; I had to re-purchase everything I used to own after my divorce, and plastic was my only friend. At least I have a couch now.)

The same thing happened to me about 3 years ago. I've never had a late payment. Band of America said that the reason for the change was that they noticed I had "high balances" on many of my cards.

I sent them a letter saying I refused the changes to my account, which froze the interest rate (at 5.9%) permanently. They occasionally try to send me a new credit card, even though the account is closed. I never activate it - I cut it up and throw it in the trash. My understanding is that if you activate the card, it means you've agreed to the new terms.

I think it's beyond slimy, and, as many of the posters have noted, if I was having problems paying my bills, how would jacking my rate north of 20% be helpful?

*waits for Compass Bank to jack up his rates*

I was planning to switch to USAA after I paid off my debt, if my rates get jacked up despite working to pay off my balance, I think I'll be getting their card and getting a balance transfer instead.

Remember how those folks said that the next thing to melt down would be the credit cards? This will only speed it up.

winstonthorne has a point. Credit scores take into account credit utilization, or the total balance of your revolving credit accounts over the sum of their limits. Closing unused accounts could actually drop your score if it makes that utilization ratio increase.

You folks with interest rates above 20% but with good credit history and stable incomes should check out Prosper.com. You can usually find financing at around 14-15% which over 3 years is a lot better than 29.99%.

@Kifune: We had the same thing happen to us last year. BoA had to trim some credit accounts due to a merger but we could never verify this with the various CSRs or their supervisor