Credit Card Rant

[Pappy]

I got a notice in yesterday's mail from Citibank concerning my Sears Credit Card.

"Dear Valued Customer,

Currently, the credit card industry is facing unprecedentedmarket conditions. As a result of this callenging business and econimic climate, we are making changes to your credit card agreement. We value you as a customer, ...."

The changes, in a nutshell, are all increasesin rates and/or minimum fees.

1. APR for regular purchases to prime + 21.99%

2. APR for cash access to prime + 23.90%

3. Finance charge for cash access transaction to 5% of the transaction/$5 min.

4. Balance taransfer finance charge to 5% of the transfer amount/min $10.

I think I am going to have to research the numbers for Sear's Tower again. I want to personally inform someone in Sears Corporate that an account that has been open for 32 years is being closed because of Citbanks attitude.

[Jim Frye]

Greed...

Last week, I received the same information from AmEx for my blue business account that hasn't been used in over two years and likely will never be used again. The problem is that if you close an account that is in good standing with no balance, the finance institutions will ding your credit score. I don't understand the reasoning behind that, but I have read it several times in financial articles. Better to let the sleeping dog lie in the safe deposit box until you croak. We have one active credit card and it is used only for online purchases, and the balance gets paid off every month.

[cgallery]

The problem is that if you close an account that is in good standing with no balance, the finance institutions will ding your credit score.

The ding comes not so much because an account is closed, but because your available credit and available taps is reduced. If the credit limit of the card is nominal, it shouldn't hurt you too badly. If the credit limit is larger, then asking another card to increase your limit can offset the damage.

[LinuxRandal]

I don't really understand this whole credit thing. I've had both my parents, and my bosses laugh, because I have a low credit limit on my cc, yet I don't have any car payments, and a non traditional house payment (owner financed) that will be payed off by my 40th next April.

Yet people go around shreaking at me I "NEED" credit.

[Uncle Cracker]

I closed my Sears account several years ago, because their interest rate was going up while all others were going down. When I called them, they told me point-blank that they really didn't care that a customer of nearly 30 years was ready to cut up his card. So, I did exactly that.

As far as today, those people whose rates are going up should consider themselves lucky, as many with accounts in good standing and perfect credit are getting canceled, some with no notice at all, until your card is declined in some store or restaurant someplace. Nice.

[cabinetman]

I don't really understand this whole credit thing. I've had both my parents, and my bosses laugh, because I have a low credit limit on my cc, yet I don't have any car payments, and a non traditional house payment (owner financed) that will be payed off by my 40th next April.

Yet people go around shreaking at me I "NEED" credit.

Your credit risk (or lack of it) is based on your experience. If you don't have much, you look risky, so therefore, they want to limit your debt.

Last week when we purchased a microwave at Sears, come to find out our Sears card was cancelled due to non use. Well, we got a percentage discount if we used a Sears card, and more of a discount if we signed up on the spot for a new one. Not too shabby.
.

[crokett]

There are a few things going on here Pappy.

1. The new law going into effect next year gives the CC companies time to raise rates ahead of time

2. Somewhat hoist on their own petard: They gave credit to deadbeats. Those deadbeats can't pay off balances so rates go up for everybody to cover the differences.

3. They gave credit to deadbeats and others who normally wouldn't qualify. After all the defaults on accounts, the standards were tightened so the available credit pool has shrunk. So now they raise rates to make up the difference.

[bruce hylton]

Without a credit card I am $160 K in debt. Thank the lord I don't have good enough credit to get one.

[cabinetman]

Without a credit card I am $160 K in debt. Thank the lord I don't have good enough credit to get one.

You might be ahead of the game without one. Someone once said "You're a success when you've exceeded your credit limit".
.

[Copper]

I think I am going to have to research the numbers for Sear's Tower again. I want to personally inform someone in Sears Corporate that an account that has been open for 32 years is being closed because of Citbanks attitude.

It's the Willis Tower now. Brought to you by Willis Group Holdings, a London-based insurance group.

[germdoc]

I got the same thing.

D*** you, you fiends from he**!

That rate is usury plain and simple. We should bring back usury laws and prosecute them.

I have a card from FIA (formerly MBNA) that I have been trying to pay off for awhile. I have had this card for about 20 years. (During divorce a lot of lawyer's bills ended up on it.) Previous interest rate was 8% which I could live with. On my last bill they doubled it, while claiming they had previously sent me notice. I deny having ever received a notice. They gave me the option of cancelling the card, which I did, but not before using most of the bonus points I had accumulated to buy 2 plane tickets to Chattanooga.

(If you have bonus points or any kind of perk, they will disappear if you cancel the card. Word to the wise.)

I am miffed that they would abruptly do this to a good customer who has never missed a payment and has paid them (I'm not proud of this BTW) thousands of dollars in fees over the years.

Credit cards are truly a Faustian bargain. The companies that offer them are masters at separating the unwary from their money.

[frumper64]

I got pi$$ed at Sears several years ago and told them to cancel my card. It ended up taking over 5 years to actually get it cancelled. NO balance - they just kept ignoring the request.