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Bad Credit Card Companies Bad - Watch how they effect your Credit Score

By
Real Estate Broker/Owner with Lisa Glowacki - Rhode Island & Massachusetts

Does anyone watch Carmen on CNBC? For those of you who don't she has a show advising people how to manage their finances. For you who don't know me I am not much of a TV fan. Actually I think it turns your mind into mush. However I do watch informative TV the history channel, CNBC, News, and yes I hate to admit it those House shows on HGTV (sometimes you can pull some worthy information from those shows).

Well last night the show was about credit card companies jacking interest rates, cutting your credit limit, and canceling cards for lack of use or having a zero balance. What got me angry was that while the credit card cuts your credit limit and cancel your card for not using it and you have a balance on another card your Credit Score is also hit.

So here we go again good customers paying there credit cards on time paying more than the minimum due are getting punished again.  Now not only are they increasing your interest rate ridiculously they are also reducing your credit score.

THE THEORY BEHIND THE MADNESS - your debt to available funds ratio has busted your credit score. I am mad as hell and you should be also.

So what does this mean. Now more good customers in this country will have a lower credit score. People who actually have great credit will be denied loans because of their credit score. This is only proving to me what I have been taught numbers lie and liers use numbers.  How do we get our customers qualified for a home loan when the credit card companies are not only wacking us with unaffordable interest rates but now they are affecting our credit scores. Oh and by the way this is all ok because there is no regulation to prevent this from happening.  Well you know what something has to happen and something has to change.

I just wanted to provide you with the information so if possible you can fight back. Pay them off as quickly as you can. If you can't pay them quickly start looking now for a credit card with a better interest rate even if it is 8% because no one seems to know hold long that will be available. Carmen's Buzz says in this time 8% isn't a bad rate.

This sucks!

Lisa

Show All Comments
Randy Parker
Real Living Advantage - Dalton, GA

You are absolutely right, the credit card companies have the customers "over a barrell."  The whole system is screwed up.  It seems that when people get into financial difficulty the banks and the creditors make it even harder for them to climb out of the finacial holes their in.  If a payment is late the credit card companies can raise rates which makes payments higher and even harder to make.  It seems that common sense has long left our finances and financial institutions and we've been taken over by greed, selfish desire, and instant gratification.

Nov 22, 2008 05:28 AM
Lisa Glowacki
Lisa Glowacki - Rhode Island & Massachusetts - Tiverton, RI
Real Estate Broker - RI & MA

Randy - you are so right. The thing that really makes me angry is how they can mess up you credit rating. By automatically reducing your credit limit your credit score goes down.  Now people with great credit can look as if they don't have good credit. Over a barrell and heading towards the water fall.

Nov 23, 2008 12:01 AM
C Tann-Starr
Tann Starr & Associates, Inc. - Palm Bay, FL

Very well said, girlfriend. It just gets worse and worse... I would love to see the credit card industry regulated as well. I'm struggling to move to a 80% cash and carry / 20% credit operation. Every payment made is a calculated battle to get to that financial ratio and stay there. :-)

Nov 23, 2008 12:29 AM
Mike Saunders
Retired - Athens, GA

Lisa - it's the old rock and a hard place scenario. There have been rumblings about revising the FICO scoring to account for this and a few other things. Fortunately, I pay off my credit card every month and my score is still high.

Nov 23, 2008 12:36 AM
Lisa Glowacki
Lisa Glowacki - Rhode Island & Massachusetts - Tiverton, RI
Real Estate Broker - RI & MA

Exactly C. If they were more willing to work with the majority instead of the minority there would be a lot more activity in our field. Now with limited amount of buyers out there or young families trying to improve their lifestyle they are just crushing them not to mention the people trying to upgrade to a new home who are getting crushed in the stock market. I am hearing about more and more deals failing.

Mike - That is the most positive statement "revising FICO" I've heard in some time now.  I am looking forward to the rumbling becoming a roar.

Nov 23, 2008 12:39 AM
Mindy Sylvester
MVP Realty - Naples, FL
Naples Fl Real Estate

The whole credit system as we know it needs to be re-invented.

Nov 24, 2008 11:11 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Lisa, I am so angry about this, I did not watch it but it has been all over the various news outlets. It is almost intentional sabotage of our market. I can not believe that the financial institution are doing this. Did we not just bail them out with 800 billion dollars of our Tax money. I would like to be bailed out too:)) Have a great Christmas.

Dec 23, 2008 07:18 PM
Lisa Glowacki
Lisa Glowacki - Rhode Island & Massachusetts - Tiverton, RI
Real Estate Broker - RI & MA

Mindy - You said a mouthful there.

Endre - I am with you. It is intentional sabotage and very close to robbery. I need a bail out also.

Hope you had a great Holiday.

Dec 26, 2008 03:10 AM
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