CC Interest Rate Increased??

[abowers]

Hi, I need some help here -
My main VISA credit card which I opened through AAA had a decent interest rate of 9.9 since I opened it in Winter of 2003. (This was better than student credit cards through my bank at the time). I was looking at statements online and noticed that for the next statement they have increased my interest rate to 20.49%!
I have not missed a payment and I have been paying more than the minimum. Why would they have done this? Is there anything I can do about it if I call and complain? I'd call and threaten to move to another card, but I don't know who has lower interest rate promotions going on right now. I dont even know if they care if I close my account. Any help would be greatly appreciated!

[sweeps]

First, was the 9.9% a promo rate? The promo might've ended and you're at the regular rate now.

If it wasn't a promo rate, were you late on any other credit cards? You may have been the victim of "universal default". If you're late on another card, even from a different company, the company can jack up your rate. Not sure if AAA does that, but it's a possibility.

[SuzeOFan]

That same thing happened to me too not too long ago. It was on an MBNA visa. One month I'm paying 10.7 the next month I'm shocked to see it soar at 21%!

We contacted MBNA immediately and they said we didn't return their "refusal letter" . But here's the thing, if you refuse, they'll freeze you on your old rate but if you use it, that means you agree to the new rate...

When we argued with them, they brought the rate back down to the pre-shocker level. Credit cards are devils and simply out of control...



You have to call your card people and try to straighten it out.

[abowers]

This card is run through MBNA too! It was just a promotion through AAA when I signed up.

This wasn't a promotional rate -- it had a 2.9% interest rate for the first 6 months then went up to 9.9. I understood that and was ok with that, and it's been 9.9% until this current statement. haven't missed a payment on other cards.

[sweeps]

Then I would agree with Suze. Call them up and find out what's going on. Be prepared to walk if you have to.

[Ima saver]

I think they have the right to raise rates whenever they want. I would pay them off and not use them again. If you card stays paid off, you never care what the rate is anyway. I get 5 offers a week for 0% interest rate cards.

[abowers]

Yeah, the problem is I still have a bit of a balance with them, I'd love to pay it off all at once, but I'm not at that point right now. I've knocked the balance down quite a bit over the past few months... I'll just keep working at it.

[abowers]

PS, what is this refusal letter? I haven't used this card in a long time and I have no problem NOT using it while I pay it off. I'm completely ok with locking in at the old rate if I don't use it.

[SuzeOFan]

I have no idea. Never saw the refusal letter. It was only after I called them that I even heard of it!

It's always a good idea to talk to a real person (maybe a few real people!)
until you are satisfied with the answer.

We didn't like how we were being treated with MBNA and tranferred the balance to a Disney 0% until next February. That gives us a little breathing room. But we don't use the Disney card. We're just warehousing the debt there.

In the meantime we don't use ANY credit cards. I have a debit card for my online banking which pays for ATM use and is not related to any credit cards. What I'm doing is saving the money I owe in an ING account until the due date when I'll pay it in one lump sum come February. I do of course have to pay the minimum 2% every month.

But this year is 'get out of debt' year. And that is our goal.

Hope this helps.

[Ima saver]

Good luck guys, that is tough being stuck with 20% interest!! Hope you can find some 0% cards to transfer to.

[abowers]

Unfortunately my bank is Bank of America, and BOA just bought MBNA so I don't know that I'll have much sympathy from Bank of America if I look for a CC through them.

I've been in and out today, I'll call MBNA tomorrow when I have some time to sit down and be put on hold for a while... haha
I hate dealing with companies over the phone.

I haven't used this credit card in a long time, I've been just using my debit card while I work on paying down my debt. I just can't pay it down fast enough!

Edit: Doubling the Interest rate from 9.9 to 20.49 definitely won't help the situation either...

[Ima saver]

Gosh, I remember the good old days when humans answered the phones!!

[flash]

Can you open a new card with a 0% grace period, transfer the money over, and close the old account? Then pay off the new card before the rate expires?

[boefixepa]

I HATE credit cards when I have to carry a balance!! I've never found a good situation. They ONLY way I will use CC is if I have the cash to pay them off...either monthly or when the 0% interest period is up...exactly because of this. MBNA was the WORST of mine when I was trying to pay them off. I did end up transferring the balance and paying it off on another card because they were impossible to work with. I hope you have better luck than I did.

What I finally did was learn how to live within a budget...then take out a HELOC (home equity line of credit) and pay off everything. Now I focus all my attention on paying that off as fast as humanly possible. I hope you can do better, but CC exists to trap us if we owe them. That my opinion.

[abowers]

No equity... I'm about to take out student loans for grad school, and i'm almost thinking that with 20% interest on the credit card, I'd be better off to take out a little extra in student loans beyond tuition for living expenses, and use it toward paying off this terrible credit card. I probably can't use edu loans for that though...not sure.

[abowers]

I called and talked to someone about the rate, he had at first said that they might be able to get it lower than 20, but not as low as 9. Then he came back and said they couldn't do any better. I asked why it increased, and he said it was because I was up near my credit limit at this time last year... I've been paying it down! If I was bad last year, then they should have punished me at the time, not a year later! They said to pay off as much as I can and call back in a couple months to see if they can get me a lower rate.
Gag me.

I don't think I'm going to have great luck getting a lower rate because I have a car loan in my name (~13k), as well as student loans (~16k), in addition to this card, and a couple others that are in good standing. Going to scrape together all my extra cash and see what I can do...

[JoyJoy]

Just a suggestion....try applying online for a card from HSBC, preferably the HSBC Mastercard. They approve instantly and they offer 0% balance transfer offers. Atleast you would know right away if you are approved and then you can transfer your balance from MBNA to them right away. I was in your predicament. Only the creditor was Chase. Chase said they had sent me a letter. I never received a letter from Chase. They raised my interest rate from 11% to 23.9% and I was paying more than the minimum and never late. I wasn't even late with any of my creditors. Their reason was "I may become a risk!" LOL.

I had just opened a HSBC savings account and I called regarding their Bank to Bank transfers. The CR asked me if I was interested in a 0% balance transfer offer for 12 months. I was disconnected so I went up to their website and applied for a credit card hoping I would get $4,500.00 to pay off Chase. I was approved for twice that much instantly.

Good luck!

[Ima saver]

Good for you Joy!!

[JoyJoy]

Originally Posted by Ima saver

Good for you Joy!!

Thank you Ima!

[sakigt]

MBNA did the same thing to me. If I remember correctly if offered me the chance to cancel the card and pay back the balance at the old rate. I only had like $50 on it so I paid it off and never used the card again.

If that doesnt work transfer the balance somewhere?!