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 posted by Cheryl
“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.”
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 Posted by Chris:
“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!”
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 Posted By Chris
“I am one of the Chase CC customer that is affected by their 5% minimum payment increase. I have been with them for more than 5 years, have not made any single late payment. Their practice is outrageous! It is useless to contact them. I have called and asked nicely of other alternatives, and was told nothing can be done, except I have 30 days to look for other institution to transfer my account. Two years ago Chase called me offer me this fix rate 5.99% option to combine my bill to one place, I carry pretty large balance, my current payment is $350. I am not sure which institution I can transfer this balance.”
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.
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.