New Credit Card Laws

[Tinkerbella]

I recently pay off a very high interest rate credit card with a balance transfer to a lower rate credit card. I called the high APR card company (*cough*chase*cough*) about two or three months later to ask them to drop my APR. (The worst they could say is 'no' right?) The gentleman on the phone informed be that by law they are now reviewing your credit every 6 months and that this review would determine whether or not a change in APR could be done. My question is whether or not the 'run your credit' or just review your credit history with them? Also are there any other laws that I might not know about?! Thanks all!

[BellesRose]

I've been with Chase for 4 years. Always paid above minimum, and always way before it's due. Often, I make 2 payments a month. In January, they raised my APR significantly because of the new credit card laws. I recently called to ask if I could get it lowered, and the rep mentioned I had perfect credit with them and wondered why it was raised. I explained that it changed when the credit card laws changed, and he said "Oh, well I can't help you there, have a nice day."
Needless to say, I'm paying $50 a month in interest alone.
I believe they check your history with them every 6 months, but it may cover all of your credit, I'm not sure. They raise my credit limit every 3-6 months, so why can't they lower my APR?
If you can find a way for them to lower it, please let me know! This is a frustrating situation that I hope we both get fixed soon

[DVC2004]

Really I think they do what they want. I have perfect credit, have never been late on anything in my life. No crecit card company has ever lowered my rate with the exception of the balance transfer offers you sometimes get.

[BrerGnat]

I was shocked to find that my card company (BofA) LOWERED my APR on my credit card! I had been at something like 14%, and last time I looked, it was down to 9.74%! I had a rather large balance that I recently paid off entirely. The APR is still at 9.74%.

Now, I have really good credit (as does DH), so I really am not upset about it at all, but I have to wonder what the rhyme and reason for all this credit card nonsense is. All I've been hearing is how they are raising everyone's rates, cutting down people's lines, etc. The opposite has been my experience.

Perhaps time to ditch Chase...they get a pretty horrible rating overall when it comes to credit cards...

[diz_girl]

Credit cards companies generally review your credit file (which includes all credit cards, secured and unsecured loans) regularly and will frequently increase your APR if you have a late payment with any other company, not just with them. They can prety much change your rates at their whim. The new credit card law is just an excuse to raise your rates, since the new law might prevent them from raising their rates on a whim in the future.

[Tinkerbella]

Thanks for all the insight guys! I'm just so shocked at what credit card companies are getting away with now. In today's economy it's not surprising I suppose. Just disheartening

[BellesRose]

I still don't understand why Chase almost doubled my interest. It's not just Chase that I have perfect credit with...it's all of them. I've worked hard to make sure I am always paying a week before and above minimum for all my cards. And I can't close my Chase because it was my first credit card, and that can do serious damage to my credit score. I guess the only thing I can do is work harder to pay it off and lock it up.

[diz_girl]

I still don't understand why Chase almost doubled my interest.

Because they can.

When banks can borrow money at rates so low that they're practically zero and then charge you 20%, they're going to try and get away with stuff like this as much as possible. Just read the financial pages of the papers and you will see that banks and credit card companies reporting record profits, even now with the economy still weak.

It's greed, pure and simple. Yes, they exist to turn a profit, but all that the bank executives care about is that upcoming bonus and they will do whatever they can to get a big one. This includes risking the long-term health of the company for (their own) short-term profits. And that means jerking you around so much and paying through the nose that you take your business somewhere else, which I'd highly recommend that you do.

[White Rose]

Hello! I actually work for a credit union and part of my job was learning about the new credit card laws as the credit union I work for does offer credit cards.

First of all, when you sign up first for a credit card, you're agreeing to allow them to run your credit report at various times for them to check to see how things are going with your credit. Hence, why they are able to lower/up the interest as they please. Now, with the new laws going into effect either now/soon, a lot of companies are upping their interest rates as a sort one upmanship on the new laws, as the new laws stipulate that clearer language needs to be used in regards to credit cards and that these companies are now no longer going to be able to play yo-yo with your interest rates. The best thing to do is to always make sure you pay over the minimum balance due every month and, if possible, try to pay off the whole balance to avoid interest fees at all.

Secondly, a lot of these companies are making these changes because, frankly, the new laws are going to make it a bit harder to qualify for certain credit cards and loans. My small credit union is a very conservative lender, but larger institutions like Bank of America, sadly, made a ton of money off of people who really shouldn't have been given the credit limits they were allowed. These news are aiming to prevent that in the future.

Finally, if you want to close the card, don't worry about your credit score, honestly. One thing you could do is, pay it off, cut it up, wait a bit and then close it. You don't want to ever close a bunch of credit cards at once, but one here and there doesn't affect it. Not to mention, there are THREE major credit reporting agencies that financial institutions in the US can use--TransUnion, Experian, and Equifax. ANY of these three on any given DAY can have a different credit score available for you. Your credit score is like the wind--it changes every single day. Most financial institutions look more at the specifics of your credit report--charge offs, payment history accounts closed by grantor and what your debit-income ratio is. Credit cards put a lot of weight down on your debt ratios--they're total unsecured debt rather than a car loan where something is secured.

Finally, if you DO want to monitor your credit report, feel free to check out a website called Annual Credit Report--just google it and it should pop up. This is the ONLY free site that is authorized to give out free credit reports from the three major bureaus. The best thing to do, is to request a credit report every few months. One from TransUnion, Experian and Equifax.

Phew--sorry that went on for so long! I do this every day, so it's very deeply ingrained! I hope it helped--somewhat!

[BellesRose]

Finally, if you DO want to monitor your credit report, feel free to check out a website called Annual Credit Report--just google it and it should pop up. This is the ONLY free site that is authorized to give out free credit reports from the three major bureaus. The best thing to do, is to request a credit report every few months. One from TransUnion, Experian and Equifax.

I use Credit Karma, which is free. Is it not as accurate?