2009 has surely been a less than stellar year for many of us. Unfortunately, the difficulties many of us are going through have been made significantly worse by our not so friendly credit card companies. During the first half of 2009, Smart Balance Transfers received ten times more credit card complaints than we have in the past two years. To make matters worse, most of the credit card complaints we’ve received came from people who had really done nothing wrong. In the past, a majority of complaints came from consumers who had made mistakes, such as missing payments or failing to understand elementary fine print. Such is not the case in 2009.
In 2009, the worst credit card complaints have come from people who literally did nothing to deserve ludicrous interest rate increases, absurd payment increases, and drastic credit limit decreases. So strap yourself down and take a moment to absorb some of the most horrendous credit card practices in the history of modern finance.
Credit Card Complaint 1: Anytime, Any Reason Interest Rate Increase:
“My HSBC direct rewards card advertised a 16% interest on cash advances. I had the card three years, and never used this. Finally, last month I took a cash advance, my first, and they raised my cash advance interest rate to 58%! When I sent an e-mail asking if this was an error, I was told that my agreement stated, (in so many words), that they could raise my interest any amount at any time for any reason, and that was that. I have never been late, never missed a payment, and almost always paid more than the amount owed. Needless to say, I will be transferring my balance to another card, and destroying this one.” -Cheryl
Comments: This may be the highest interest rate ever charged. Ever. And this includes loan sharks.
Credit Card Complaint 2: Interest Rate Doubling, Credit Line Dwindling:
“I have had a Direct Merchants Bank MC for over 7 years and currently carry a balance of less than $1000. Effective in January the interest rate doubled to 29%. The card limit was $4400 but I just rcvd a letter from HSBC who took over the account 2 yrs ago and it states they are reducing my credit limit to $1110. The letter reads “We recently completed a loss mitigation review on our Direct Merchants Bank MC accounts. As a result of the class of accounts into which your account fell, the credit limit has been reduced to $1110.” I have never made a late payment and pay more than the minimum. This is unfair and a credit reduction of over $3000 will certainly affect my credit score! What rights do I have?? None!” – Chris
Comments: Double the interest rate and cut the credit limit in half. Oh, we really appreciate your business!
Credit Card Complaint 3: We Know Times are Tough, So Give Us All Your Money:
“I am one of the Chase CC customers that is affected by their 5% minimum payment increase. I have been with them for more than 5 years and have not made any single late payment. Their practice is outrageous! It is useless to contact them. I have called and asked nicely about alternatives, and was told nothing can be done, except I have 30 days to look for another institution to transfer my account. Two years ago Chase called me to offer this fixed rate 5.99% option to combine my bilsl in one place. I carry pretty large balance and my current payment is $350, but it will soon be $875.” – Chris
Comments: A $350 monthly payment can be a big strain on most people. So, during a time of financial stress, we’re gonna increase that payment to $875. Hope this isn’t too big of an inconvenience. You should be able to find a healthy, affordable way to feed yourself off the dollar menu-they have salads now!
Final Thoughts: Choosing three credit card complaints out of the hundreds received by Smart Balance Transfers wasn’t particularly easy. In fact, there are so many headline worthy complaints, we’ll need to post a lot more than three to paint an accurate picture of just how poorly credit card companies have been treating customers.
In the past, when one credit card company wronged a consumer, it was easy to transfer credit card balances to a different company and enjoy a 0% interest rate. Today, getting approved for low rate and 0% credit cards is becoming increasingly difficult. Consequently, many consumers are stuck with credit card companies that seem to show no regard for their customers. And, despite new credit card laws, things continue to get worse.
If you have a moment and a credit card complaint, feel free to share it with us anonymously. Even better, if you found a solution to a credit card problem that worked, your comments could help out the millions of Americans who are now paying a heavy price for the mistakes our banks made during the past five years.
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July 12th, 2009 at 4:43 pm
Merrick bank just increased my credit card interest rate to 32.7% effective in one week. They told me that if I did not like it I’d have to pay off the existing balance in full and cancel my card.
I have been a credit card holder with Merrick since the late 1990′s with no derogatory information, not even a 30 day late, with anyone, and my score is 700-720.
Do not get any cards with Merrick, because you can be a loyal customer for ages and still be ripped off.
July 15th, 2009 at 8:27 pm
I’m with you John Todd, they did the same to me, as well as increasing my annual fee to a whopping $96. Fortunately, I have another card I can transfer the balance to.
They aren’t getting another cent of my money. Nice job, Merrick!
July 23rd, 2009 at 10:44 pm
I have 1rst financial bank.A few years ago I got into some serious debt with my credit card over $14,000 dollars.My card has been terminated since then and I have been struggling paying the balance. Three years later I brung the balance below $5,000 but every monthly payment I have a finance charge between $85-$100 plus dollars. I have brought this to the attention of reps and supervisors pleading with them to lower my percentage rates and such with no assistance. I want to pay my bill but it seems I’m taking three steps forward while being pulled one and a half steps back. This has affected my credit score and even me trying to save money to buy a car and an apartment. I really need some advice on what to do.
July 24th, 2009 at 10:16 am
Are the finance charges related to interest or is there some type of penalty involved? That seems like a substantial charge if it is not interest.
October 31st, 2009 at 12:17 pm
I just recieved a letter yesterday from Chase. They without any warning closed one of my cards.It had no ballance. They stated that it was because I had not used it for an extended period of time.I was angry beyond words!!!. I called them and was told that I could not even talk to anyone else and was flaged that I was not to be refered to anyone.How can this be ok?????? Does this effect my credit score? The fact that the card companies can do anything they want without even having the comon decency to warn you first is outrageous. Who do you complain to?? Who will listen?? I don’t know who to turn to. Any advice??
November 1st, 2009 at 1:45 pm
Susan,
This could negatively impact your credit score, though not as much as it would have if you carried a large balance. However, if you have two cards, one with a $5,000 balance and a $10,000 limit and your closed card had a $10,000 limit, your credit utilization ratio would jump from 25% to 50%, which could negatively impact your score.
Also, if the card that was closed was one of your oldest accounts, that could impact the score negatively by shortening your credit history. Unfortunately, there’s little that can be done, though I am appalled that you were told you were flagged just because you called into complain. That is absurd.
December 2nd, 2009 at 1:39 pm
Chase Bank raised all my credit card interest rates to almost 20 percent. I have perfect credit and had the cards for over 10 years. Never missed a payment. They claim the Prime Rate is high as its ever been. I talked to someone who works for another bank and that is a line of bull—s. I am working with other banks to transfer the balances. If you can, everyone should try to. I hope the CEO can sleep at night. CHASE BANK YOU WILL LOOSE YOUR BEST CUSTOMERS AND BE STUCK WITH PEOPLE WHO WON’T PAY OR FILE BANKRUPCY. I HOPE YOU GET WHAT YOU DESERVE.
December 14th, 2009 at 1:55 pm
Is there anyone that has every heard of credit card that you can not pay off with a balance transfer. Bank of America tried to get me to consolidate all my credit with them. I refused. They ask me to sign an agreement to lock the balance at 8.9% and i did. I had a 8.1 credit rating. Every month i made my payment and they kept raising the rate even tho i had never had a late payment. After several months of calling and not getting and answer why this was happening,the last person from bank of america said he did not no why they would not accept a payoff. I have checked into it and turned them in to the treasury dept occ. The amt owed is minimal to most peoples debt less than 7000. Now that i told them i wouldn’t pay it they have turned it in and our trying to threaten me with a collection agency. If it takes me 10 times the amount owed i will never bow to bank of america. I still have no late payments on anything i ever owed and I don’t need credit so hang on boa your in for the ride of you life. My husbands credit is spotless and i don’t need your s———-a——–
January 4th, 2010 at 1:55 pm
20.99% from Citi.
January 04
Thank you from Citi: We are increasing your interest rate.
I just got off the phone with Citi. I believe, like all Americans, I helped bail them out from their poor management choices during the onset of the recession. I received my thank you from them stating my interest rate was going to be raised to 20.99%.
These interest rate increases verge on the immoral. They are well above operating costs. They are targeted at good customers who will pay their bills. We are being asked to finance the misfortune of others, the bank and their defaulting customers, not only through our taxes, but through high interest rates and fees to the banks.
After negotiating, I was able to take it down to 18.99%. Still almost 2 points higher than the average reward credit card rate. I acknowledge the good customer service from Tim with whom I spoke. It isn’t his company any more than it is mine I guess. He just works their and I am a minor creditor. Glad he still has a job, but feel for him as he hears from frustrated customers all day. I’m sure he doesn’t get any reasonable compensation for the pain his employer is putting him through.
Well, this card is on the chopping block and will be paid down rapidly. I will miss my American Airline miles, which I was willing to pay a bit more for, but not this much more. Too bad the co-branding partners aren’t stepping in because this type of negative customer experience reflects on them as well.
Some complain about the US becoming a nanny state. Despite congressional action already underway, average consumers need to be protected by these excesses now. If the big banks can’t make money the old fashioned way, then they should be allowed to fail. There isn’t enough value for me to do business with them anymore. Scale was once seen as a way of driving down costs, but it is a way of driving up complexity and creating market systems that fail to serve consumers, employees and the shareholders.
Maybe its time to get credit through a Chinese bank and cut out the middle man.
February 24th, 2010 at 5:59 pm
I bet I can top all of the above. My son was laid off back in August of 2009 and we called Chase Bank to see if they would work with him and lower his interest. I should not have been shocked, since that phone call they have raised his interest rate twice on 2 Chase Cards, (one use to be Wahington Mutual that was taken over by Chase.) He could barely make the minimum payment due on his cards and has never missed a payment, always paid more than the minimum payment and a very loyal card holder. Now the interest rate on the card that use to be a Washington Mutual fixed 9.97% is now 18.24% variable. The other card which is Chase use to be a fixed rate of 12.97% is now 23.24% variable and at minimum payment will take 21 years to pay off. This is just wrong, ask for help in a time where it is not his fault that the company laid almost everyone off and instead Chase takes the opportunity to make even more money. Try to talk to an American, all I can get is China, Indonesia, or some other forien company. I think the since the Government is getting involved they should not have given the Credit card company warnings,that gave them time to top out the interest rate.
February 25th, 2010 at 10:03 am
You’re story really hits at the heart of the frustrations many of us feel. Credit card companies seem unwilling to help and the people who answer the phones are far away and could care less about what is happening to honest Americans trying to pay their debts.
July 22nd, 2010 at 9:32 pm
What’s going on makes no sense. It started about a year ago when all of our CC limits were cut in half. We maintained high balances but were never late with our payments. My wife and I had relatively high CC debt (40,000.00) which we decided to pay down agressivley. Fortunately, we are in a position to be able to do this. We were never close to our limit on any of our cards until they cut down our credit line. Since the beginning of this year, we have paid down two Chase cards. One we knocked down by 52% the other by 47%. We paid down our other cards as well but not as much, but a significant amount. We get a couple of letters last week telling us they’re cutting our lines down to several hundred dollars above what we owe. The reasons:
Too much credit
Too close to the limit.
How could it be too much when we had over two times the amount a couple of years ago and of course it’s too close to the limit, you’ve been lowering the limit on a regular basis. Makes you want to do something crazy.
I feel for the people who are not working and who’s rates are going up all the time. It’s just insane.
July 23rd, 2010 at 10:39 am
Pat and Michele,
It sounds like you are experiencing the same type of limit reductions that many visitors have shared on the credit limit decrease comment section. And yes, it is completely insane. You’re making a huge effort to reduce your debt and are being rewarded with decreased limits. The important thing, however, is that you are getting rid of the debt. As your debt goes on, other companies should be more willing to lend to you. And you are saving a ton of money on interest.
If you have a good credit history, look at balance transfer offers from other banks. You can get a 0% APR for 12, 15, or 18 months. This can help you reduce the debt faster and stop paying interest to the banks that keep cutting your limits.
But no matter what, keep paying down the debt. It is absurd you are being punished for this, but you’re be much better off in the long run.