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| Topic: Usurious Credit Card Interest Rates | |
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Hi texasrose9, creditcards companies are working to gain money, not for your pretty face or mine  it's the same sh.... with insurances etc....
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The reason Citigroup
raised my credit card interest is because the U.S. Mail didn't forward mail from a different credit card company. The payments didn't get made and, as a result, Citigroup raised the interest. Didn't call me, didn't warn me, just did it. |
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I hear ya Hiker.
And Palletier..... of course they are in it for the money. They are a business. BUT we are the customer! And they better start thinking of it that way. You $hit on your customers and they go somewhere where they are treated better...or stop using your "services." |
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I Know your right, the only way to stop this ripof is not using creditcards, but how to convince people about that? 
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Edited by
wouldee
on
Sun 12/09/07 12:07 PM
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Just a symptom, but oil at $100/barrel tightens the money supply.
Tight money means strangleholds are inescapable weapons for those with capital fluidity to employ. Captive markets operate in supply and demand equilibrium. Tight supply of money increase value and cost of capital. Shrinking demand lowers the value and cost of capital. That creditors manipulate implied contracts entered into with debtors suggests greed and avarice are toys to play with by the advantaged and priveleged. That they find it, manipulation itself, appropriate action is unethical and immoral ; but not necessarily illegal. It is as though the credit card companies are saying to existing debtors, " Money is more expensive at this moment and we can increase our rate of return. Pay off your account balance so we can lend our capital at a higher rate of return to others. But if you choose to maintain your account balance with us, then expect that you will meet our requirements for a higher rate of return in this present market. It is your choice. Thank you for maintaining our profitability and we look forward to your continued support of our needs." Ridiculously ludicrous and absurd, don't you think? It is legal theft and abuse of good will and good faith. JMO...........  
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Edited by
texasrose9
on
Sun 12/09/07 04:07 PM
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Just a symptom, but oil at $100/barrel tightens the money supply. Tight money means strangleholds are inescapable weapons for those with capital fluidity to employ. Captive markets operate in supply and demand equilibrium. Tight supply of money increase value and cost of capital. Shrinking demand lowers the value and cost of capital. That creditors manipulate implied contracts entered into with debtors suggests greed and avarice are toys to play with by the advantaged and priveleged. That they find it, manipulation itself, appropriate action is unethical and immoral ; but not necessarily illegal. It is as though the credit card companies are saying to existing debtors, " Money is more expensive at this moment and we can increase our rate of return. Pay off your account balance so we can lend our capital at a higher rate of return to others. But if you choose to maintain your account balance with us, then expect that you will meet our requirements for a higher rate of return in this present market. It is your choice. Thank you for maintaining our profitability and we look forward to your continued support of our needs." Ridiculously ludicrous and absurd, don't you think? It is legal theft and abuse of good will and good faith. JMO........... |
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yup.
I've noticed that if you stop using a card and maintain a balance at about 50% of the credit limit, they will jack the rate no matter what, but not while you are raising the balance. They know precisely what I'm doing and maximize their results based on my behavior and activity, not on any credit worthiness. Class action suits are the only way to subvert their tactics, but not worth the investment of time, talent and treasure. It is a game, all around.
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I think we are just beginning to see the backlash against these companies for these practices. I read somewhere else that Chase and Capital One are ceasing the practice of raising rates if there is a change in your credit profile. We will see.......
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Italian, you are right about some people being irresponsible, but then, shouldn't the credit card companies tighten up on who they give cards to? I can't open my mailbox without there being some kind of credit card offer! I throw them in the trash! If the companies would quit shoving these in people's faces, it might help. And interest rates are STILL too high, even with what you describe! |
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I think that they are smarter than us because they know their own game.
We will see... I think we may see them cleverly disguise themselves by offering savings accounts to cardholders. Offer 6% for money they will rent at 21-30% and make 400% on the float. Stagnant house prices and tight mortgage money for re-financing home loans to pay off short-term debt has put the consumer with a balance on the chopping block for now. They are resourceful. Seems like easy money for them though. You are so right. we will see....
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Italian, you are right about some people being irresponsible, but then, shouldn't the credit card companies tighten up on who they give cards to? I can't open my mailbox without there being some kind of credit card offer! I throw them in the trash! If the companies would quit shoving these in people's faces, it might help. And interest rates are STILL too high, even with what you describe! Credit card companies and banks in general should tighten up their guidelines, in terms of who they lend money to; it would be good for our economy. However, if the guidelines where tightened, then people would say, "I've got an income to debt ratio of 30%, how come I don't qualify?". If banks and credit card companies tightened their credit offer guidelines, and only extended offers of credit to people, who could statistically pay off the debt, with the least risk of default, then only people with very good credit would be extended a credit card offers. Once you start extending credit card offers to people with less than perfect credit, statistically your odds of that person defaulting on their credit line increase, and thus the need for an increase in interest to pay off the defaultors debts. The interest rates a credit card company offers you can never be bound by your individual credit report. They have to look at the entire population of people they offer a given card to, and assess risk and interest rates based on that population. So, regardless of your individual credit history, your interest rates will be tied to the population of people offered the same card, under the same qualification criteria. |
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It is as though the credit card companies are saying to existing debtors, " Money is more expensive at this moment and we can increase our rate of return. Pay off your account balance so we can lend our capital at a higher rate of return to others. But if you choose to maintain your account balance with us, then expect that you will meet our requirements for a higher rate of return in this present market. It is your choice. Thank you for maintaining our profitability and we look forward to your continued support of our needs."
Ridiculously ludicrous and absurd, don't you think? It is legal theft and abuse of good will and good faith. Wouldee, this is the EXCACT attitude the lender that held my mortage had. My mortage was up for renewal, actually three of them, all with the same outfit and they wanted to jack the percentage to credit card rates. I decided to sell the two commercial properties I had and pay all of my debt off and tell them to go F**K themselves. Now they want to lend me money at a significantly lower rate again. 
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Edited by
italian_half
on
Sun 12/09/07 04:41 PM
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It is as though the credit card companies are saying to existing debtors, " Money is more expensive at this moment and we can increase our rate of return. Pay off your account balance so we can lend our capital at a higher rate of return to others. But if you choose to maintain your account balance with us, then expect that you will meet our requirements for a higher rate of return in this present market. It is your choice. Thank you for maintaining our profitability and we look forward to your continued support of our needs." Ridiculously ludicrous and absurd, don't you think? It is legal theft and abuse of good will and good faith. Wouldee, this is the EXCACT attitude the lender that held my mortage had. My mortage was up for renewal, actually three of them, all with the same outfit and they wanted to jack the percentage to credit card rates. I decided to sell the two commercial properties I had and pay all of my debt off and tell them to go F**K themselves. Now they want to lend me money at a significantly lower rate again. Kid. Unfortunately, the statistical models work that way. Since you once owed money, and subsequently paid it off, your risk to default has gone down, hence the credit card companies are able to offer you a lower rate. |
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Great story Kidatheart! I don't blame you for not wanting to do business with them. Kinda like fair-weather friends. They give the low rates to folks who don't really need it, and gouge the rest.
Italian, it doesn't seem fair that a person could have good credit and be penalized when it comes to how they are treated individually. What SHOULD count is the ACTUAL repayment history of a person. The best indicator of future performance is past performance...... it's like you're stating the credit companies assume you are going to default and then just treat you that way. There's something wrong in that.......... |
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Great story Kidatheart! I don't blame you for not wanting to do business with them. Kinda like fair-weather friends. They give the low rates to folks who don't really need it, and gouge the rest. Italian, it doesn't seem fair that a person could have good credit and be penalized when it comes to how they are treated individually. What SHOULD count is the ACTUAL repayment history of a person. The best indicator of future performance is past performance...... it's like you're stating the credit companies assume you are going to default and then just treat you that way. There's something wrong in that.......... Rose, In theory what you are saying makes sense. However, credit card companies can't offer different rates to individual people for the same card. Since credit card companies are regulated by the FDIC, they would have to provide all of the complex models they used to calculate each person's individual rate to the FDIC for evaluation. The overhead in doing this would be enormous. It makes most business sense to offer different interest rates to different risk groups. The best way to decrease your interest rate is to pay your cards on time for about a year, then find another card with a lower interest rate and transfer your balance. You can never make late payments these days, or miss a payment. The card companies now seiously penalize you for this, because you are a greater risk to default. However, to avoid getting dinged for making a late payment, call the card company in advance. Many times you can pay a week or two late, and avoid the hit to your credit report, if you call them. |
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It was my mortage company that wanted to raise my rates when it was up for renewal, not a credit card company. They've found new and more lucrative ways of making money through lending to people who have less than stellar credit hopefully CAN'T pay their rates and default.
They then reposses the property and do a quick clean up and resell through a realty company they also own. Thus making money from every available angle at the expense of people who have a poor credit history. Some people just can't go to a bank and apply for a mortage when these "predators" want to jack their rates or take it all away from them. It's a dirty business and I wanted away from them altogether. I could have gone to a bank but chose to sell instead. Not everyone has that option. |
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Great story Kidatheart! I don't blame you for not wanting to do business with them. Kinda like fair-weather friends. They give the low rates to folks who don't really need it, and gouge the rest. Italian, it doesn't seem fair that a person could have good credit and be penalized when it comes to how they are treated individually. What SHOULD count is the ACTUAL repayment history of a person. The best indicator of future performance is past performance...... it's like you're stating the credit companies assume you are going to default and then just treat you that way. There's something wrong in that.......... The credit card companies don't assume you are going to default. They use risk models that say: given a person with credit score X, they have a Y percentage chance of default. So, if we offer card A, to people with a credit score of X, then we can assume that Y percent of the people will default. Then, the cost of paying off that Y percent of defaultors is Z, which is then passed on the consumer through interest rates, W. Here is the simplified formula, where total credit line of the credit card population equals C. Z = C * Y (total default $ = total credit line * percent default) W = Z/C (consumer interest rate = total default $ / total credit line) If credit score A, results in Y = 10% and If credit score B, results in Y = 20% then The credit card companies have to charge more interest because there are more defaultors with credit score B. This is, of course, a simplified formula, which does not include many things like overhead. The bottom line is, you are charged interest rates, based on the likliness of someone in your group (i.e. credit score) to default. The offering of credit, the types of credit lines, and interest rates are all regulated by the FDIC. |
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I smell something fishy
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Edited by
wouldee
on
Sun 12/09/07 05:22 PM
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I got cards thaT ARE 9% AND SOME HOVERING AT 11% AND TWO THAT TEASE AND WILL BOUNCE TO 23% IF i STAGNATE A CARRY OVER BALANCE.
That does not add up to all the statistical mumbo jumbo. Credit score here is 730. Capital One gives me 3.99% on transfers. ?????????????????????? |
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It was my mortage company that wanted to raise my rates when it was up for renewal, not a credit card company. They've found new and more lucrative ways of making money through lending to people who have less than stellar credit hopefully CAN'T pay their rates and default. They then reposses the property and do a quick clean up and resell through a realty company they also own. Thus making money from every available angle at the expense of people who have a poor credit history. Some people just can't go to a bank and apply for a mortage when these "predators" want to jack their rates or take it all away from them. It's a dirty business and I wanted away from them altogether. I could have gone to a bank but chose to sell instead. Not everyone has that option. Kid, you're not seeing it from the bank's point of view... The contract you entered with your mortgage company was adjustable based on the prevailing interest rates. They had every right to raise it. If you wanted a fixed rate, then it would have been prudent to obtain one. However, most people that find themselves in an ARM, are there because they are not being offered a fixed, due to their credit history. An ARM is just that, "Adjustable", so they can raise the interest, per the contract you signed. However, it sounds like what your saying is that maybe the bank shouldn't have loaned you the money in the first place. If so, I agree. The concept of an ARM to me is insane. How can you lend someone money, to the limit of what they can afford, and then expect them to come up with more money, for more interest? I think the FDIC really missed the ball, in allowing ARM's to be offered, and we're seeing the effects of that now. You did exactly the right thing. Sell the property out from under them. Most people are waiting for a miricle from president Bush, in the meantime, their equity is dropping. Those folks who wait are going to end up selling their place anyway, and paying off the balance on the mortgage for a property they don't even own.... |
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