Changes in Credit Card Terms Can Make You See RED.

Lucky for my readers, I went to “Charm School”. If not for that I’d be foaming at the mouth and posting obscenities. Now I say, “That’s NICE.” I received changes in terms from my credit card provider. My periodic rate raised 5% for new purchases. That’s NICE.

In September 2008 my periodic rate was 15.99%. By December it had dropped to 14.99%. Now when the rate should be much lower, I receive a change in terms with my December statement raising my rates to prime +13.99%. The notice states that the rate would be no lower than 19.99%! That’s NICE. I am fortunate that so far my payment or my interest rate has neither doubled or my credit limit been reduced. After reading the news stories around the country, that seems to be the trend.

A year ago, economists were stunned that credit cards were not defaulting at the same rate as mortgages. I explained that people held credit cards in reserve to take the place of their cash stash or nest egg. They would make the payment, if at all possible and try to reduce their balance and keep or increase available credit. Now, it may be a different story.

Unemployment and borrowers’ irresponsibility will be blamed for defaults while banks and credit cards are busy shooting themselves in the foot. Yes, the financial institutions built this house of cards, excuse the pun. Borrowers consistently making their payments are strapped for cash and bitter about how they are being treated. Did you ever wonder why banks get warnings on regulations that do not go into effect until July 2010, and their customers get “Surprise B****”?

We have reports that state “My credit limit was reduced with NO Warning”. It makes it difficult to rent the car after you used the plane ticket. I am stranded in a strange city, because my credit limit was cut and I did not know it. Or worse yet, I feel that a government bail-out is not enough. I pay with my taxes and with over limit fees and penalty interest rates. That’s NICE.