Home : Blogs : Fran Gatti - Realtor®, RDCPro®, Crescent City CA Real Estate : Fran's Crescent City Real Estate Blog

Read the mail you get from your Credit Cards Issuers or BEWARE

Bookmark this blog at www.fransblog.com

Read ALL the mail you get from your credit card issuer's and here's why.

With rising defaults on credit card debt, banks and retailers are trying to keep up profits by raising interest rates on their faithful credit card holders that are making their monthly payments on time.

They do this by sending their credit card holder a letter in the mail that is pretty innocuous looking, but read it because it is going to greatly impact your finances.

My son, who has never been late on a payment has received two this week, one from HSBC and one from Citibank. Both stated in itty bitty writing that unless he sends them a letter stating he opts out, the bank or retailer will raise his interest rate to over 20%. In order to avoid this more than doubling of his interest rate, he has to write a letter, send it by a date less than two weeks away and state that he disagrees with this interest rate increase and that the bank or retailer must close his account and he will continue to pay his card at the previously agreed upon rate.

I received one of these innocent looking letters back in June (so the bank told me). If I got it, I didn't read it. Learn from my mistake and READ YOUR MAIL. I had never been late on my credit card payment once since I have had the card (about two years) and always paid above the minimum amount due, however, Advanta ran a credit profile on all their customers and any that fit a certain profile received this letter (or maybe everyone, I'm not sure).

Advanta raised my interest rate from 8.99% to 23%. Of course I called them flabbergasted and asked what the heck and they said, "We sent you a letter. You had the opportunity to opt-out." Well what do you say to that?

I previously had my finances under control but that really changed things quickly.

It would change things quickly for my son as well if the bank that financed his motorcycle increased his interest rate from the low two year introductory rate to over 20%, but since I read his mail like any good mom, he's going to opt out and keep his low interest rate. Boo hoo to the bank.

As times get tougher and credit card default rates increase, banks are going to be looking to their steadfast clients to make up those losses. Losses they created, in many instances, by giving credit increases to customers who they did not document had the ability to repay.

In other words, banks are guilty of helping create the mess, but hey, they are getting bailed out, but you aren't, so be smart; don't get caught in this trap. READ YOUR MAIL.

Thank you for stopping by. Your comments on this post are welcomed and appreciated.

Fran Gatti Del Norte County Real Estate Agent

Brought to you by Fran Gatti at
No one works harder for you!
Bus: 707-464-5400, Cell: 707-218-8162
Email: frangatti@remax.net
Website: Fran GattiHomes.com
My Blog: Fran's Blog
RCDPro®

Posted by Fran Gatti - Realtor®, RDCPro®, Crescent City CA Real Estate on 12/06/2008 08:34 AM

Comments (48)

financial news, crescent city ca buyers and sellers info

Post is included in group: 1st Time Buyers
Post is included in group: Realtors®

48 Comments on Read the mail you get from your Credit Cards Issuers or BEWARE

DEC

You got my attention with this post. I will be pulling my credit statement.

I wonder how many people are going to get stung with this one? If you have two or three credit cards and they all do this to you, wow, that could be overwhelming.

DEC

Good advice, honestly I never read mine. Where you able to get the Advanta back to the regular rate? I use them too.

Thanks for the heads up, we usually don't read them if they aren't a bill. They are so sneaky!

Why in the world would they give you the option in the first place of opting out? That's just strange.

Hi Fran:

There's something to be said about paying off your credit card statement on time!

I get so much junk in the mail, I tend to just rip it up...

Fran: Thank You for sharing.. I toook the liberty of the Re-Blog button on this one...

Fran, excellent post - I, too, just re-blogged it and will contact you by email about posting it on my outside blog, with you as a guest blogger.

Fran

Great Info and unfortunately i just schred the millions of offers and paper work that the credit card companies send...NOW i will read then schred...thanks for the heads up and congrats on the feature.

Fran... you are correct and well timed. I think I have tossed all in the past. I have one now that does just that.

Thanks

I may have received one of these and tosed it. Thanks for the heads-up.

So many people don't read their junk email and would miss this and then reap the problems from it, never imagining that this could happen.

Hi Fran,

This is a great public service announcement.

Credit card defaults are going to be the next chapter of the credit crisis as more and more credit card holders will default on their payments as home equity is exhausted and job losses continue to mount.

These credit card companies want to scale back their lines of credit and charge higher rates due to the increased risk associated with the cards.

This downward economic cycle has a ways to go.

Excellent advice...

If my credit card company said to me "you had an opt-out opportunity, and you didn't take advantage of it... what do you say to that"... I would say... "Cancel my card, I'll transfer any balance to someone who values my business"... and then DO IT.

Fran~Your post offers excellent advice. I'll be reviewing my credit card statements/letters with more attention from now on. Thank you for sharing!

They used to send this out with the bill.... but it was too obvious. They are getting sneaky.

We have 780 - 800 fico scores and NEVER late on anything. They did the same to us.

We just close the accounts. Why not, we get several better offers per month.

It certainly is amazing how some of these large companies only look for ways to stick the consumer for their bottom line. Certainly they must realize that by raising the interest rates so much, more consumers are going to default, which would then hurt their bottom line.

I sit back and watch as these kind of things keep happening and am astonished at the ignorance. Decisions like this hurt everyone, especially the company, in the long run. It reminds me of how the banking industry has not been wanting to work with the homeowner to make minor adjustments to keep homes from foreclosing and instead, let the home go to foreclosure costing the lender untold thousands of dollars in losses that were preventable. These ignorant decisions couldn't be anymore effective at destroying our economy than if they were PLANNED. I can't help but wonder...

Just as mortgage lenders, even after seeing the crisis building, chose to keep bumping rates on ARM's ever higher and refusing to work with struggling homeowners, (and still resist any substantial concessions to this day), credit card companies in their infinite greed wisdom will raise rates until they drive even solid, paying customers into delinquency as well, exacerbating the problem they are suppsedly trying to fix!

I may not have an MBA, but I know that when a house isn't selling, raising the price isn't the answer. When unemployment is on the rise; foreclosures, bankruptcies and defaults are increasing; the country is in recession; and consumers are cutting spending just to survive, do these idiots geniuses not understand that INCREASING DEBT LOAD CAN ONLY LEAD TO A DOWNWARD SPIRAL AND EVEN GREATER DELINQUENCIES??? Is that so hard to grasp? Wouldn't lowering rates make more sense to ensure that those who are current can stay current, and those that are struggling are less likely to default?

Oh wait a minute, I guess it doesn't matter. They have our self-serving caring government in their pockets to bail them out when their strategy fails. For Wall Street and Detroit, failure is a huge win! If my business plan is unrealistic and fails, I lose everything. If their's fails, they're showered with billions of dollars of OUR money as a reward. Talk about "can't lose".

And they know how few consumers can truly afford to "Just Say No" at this point. Too many are relying on those cards to weather the downturn (not to mention that closing an account actually has a negative impact on your credit score, at a time when credit scores are more important than ever). They have us over a barrel and know it.

It is going to take a united front on the part of consumers to reduce reliance on these economic parasites. One upside to these trying times may be that as more of us accept the "Just Say No" option, and more of us are forced into default/bankruptcy, we will return to paying cash and only buying what we can afford, giving us the power to bring these giants to their knees.

Just my opinion . . .

This is going on all over the country and all consumers must watch. Banks seem to be sticking it to everyone.

I received one of these from JC Penney. For some reason I did take a closer look at it and I noticed the opt out. I also noticed that the letter/notice was actually from GEMB (? or something like that) I know it is from the financing credit card division of the General Electric Corporation. That in of itself sort of PO'ed me. I have been a credit card holder with JC Penney since 1972, and have two accounts that appear to be in an open status on a recent credit report. I know that one of them has been dormant since about 1984 that we opened for some plantation shutters. I know this because the high credit was $1600. At the time, I "discussed" with my better half the wiseness of this expenditure and I lost the discussion. Turns out it was good I did because they looked great and when we sold the home about four years later, it really enhanced the marketability of our home.

Anyway back to the opt out thing. I had a date certain that I was to opt out or a telephone # to call. I went for the telephone and of course got the MAIN MENU thing. It wanted my telephone # but I reasoned then that information would be sold to other marketing companies and I was setting myself up for more grief from unwanted solictors. I hung up but figured I was already had because of call capture. I went to my last paid statement, I only owed $20.00, and noticed a customer Service 800 # to call directly to JC. I had to wait but now I was mad. I figured I would get some guy from India called Johnny or Bill that I still could not understand. I got a very nice lady with a real strong accent from the deep south. She was very pleasant. I asked her about this opt out and why they would send it to me anyway. I had not used my account in probably a year and had only used it to get some short sleeve dress shirts for the summer months to take advantage of a great sale. I also asked her about GE. She said that JC Penney had sold the accounts to them some time ago and that I surely had been notified. I confessed I probably had but just through away the notice letter. I asked her why I had to go the merry-go-round with the computered customer service wanting my phone #. She said that was to identify the accout for the opt out and they already had my number and it was for the computer to match them to process the opt out. Well this made sense and I told her I was mad enough when I first called to close the account but she was so kind and informative I had changed my mind. I just thought that an account opened that many years was important to them and they should spend less money trying to get more money out of their customer base and spend it on existing customer retention. She agreed but said she had no control over that aspect. I have kept the account open but since I have read your blog I'm P.Oed again and I am going to close the account. If everyone in America would do that, perhaps we might get back some good old fashioned, appreciative customer service and those of us that keep it under control, pay our bill on time, pay it off earlier than specified, would not have to bear the burden of those that don't.

I am not sure what card company it was, but the one my girlfriend uses actually lowered her credit limit. She was under limit before and over limit now. I am not sure how they think that they can get away with it, but they did. Great informative post, I shred all of these offers without even looking at them. I am going to really look at the next set of statements that I get.

Hi To All,

To answer a few questions, I was never late on my card when this happened and yes, here's a good reason to pay your cards in full, but unfortunately the balance on this one is quite large because of paying some college costs when things were slow for me (I have 3 kids in college).

No, Advanta has not agreed to lower our rate back to 8.99%, but gee they're nice on the phone, even Bobby in India. One of the supervisors said she would knock off the three months of additional interest I had to pay in order to help me out, but I haven't seen an updated statement yet, but I am set-up for email alerts on this account and with the most recent alert on my balance, I would say the supervisor did not follow through. I would keep copious notes when dealing with these people.

This has actually started a snowballing effect in my finances and I'm struggling with, "Do I pay these exhorbitant fees and interest rate or eat, keep my house warm, and oh yeah, keep my house?"

Needless to say, my husband is PO'ed to the hilt. To him this is a matter of principle and he told me to stop paying them (paying them isn't an option at this moment but might be later this month). He knows what it will do to our credit, but he's the tired-good-guy-consumer who has played by the rules and is taking it in the shorts and he isn't going to take it anymore.

I've been waking up everynight in the middle of the night worrying about it. This is no way to live and I know there are people out there who have way worse problems than this making me feel guilty for being so stressed out.

God bless all of you and have a very Merry Christmas season.

I read everything that comes from our credit card company, but I can't say that I read the fine print very closely. I will from now on, though. Thanks for the heads up.

Fran, transfer the balances to a card that is less. I'm sure you get them weekly. This is outrageous and I would be mad too. We work so hard for our credit and them to be taken advanage of like this if insulting.

I may post on this on my outside blog and refer back to your post here.

Hey Fran - I just wrote a post about this a couple of days ago. I called India and renegotiated. Hope you get your's worked out. What got me was the generic envelope without any logo - I mean, who opens that stuff? But, that's what they're planning on I guess. BEWARE.

Hello Fran, Thank you for taking the time to warn us so we won't get snookered too. I've been waking up in the middle of the night worrying about money too and so do most of my friends. None of us have ever seen such hard times and it's scary and distressing. I'm really trying hard to do the best I can, always do what's right even if the other guy doesn't, and grab a good book when I can't sleep. Good luck and God bless you.

Thank you for this warning, as most of us wouldn't know to even read mail from the issuing cc banks. I will be on the lookout in case one arrives ... hope I didn't shred one already without knowing it!

Advanta raised my interest rate from 8.99% to 23%. Of course I called them flabbergasted

Hi Fran,

I really appreciate your post. I received an unusual looking Change In Terms Notice a few weeks ago, but I didn't understand what they were doing. Fortunately, I didn't throw their letter away. It almost went into the trash, but I had a bad feeling about that one so I kept it on my desk. Now your post explains it. Chase was trying to pull exactly the same trick on me. Fortunately, I've got until December 19 to get my cancellation to them. I'm writing them NOW!

Thanks! I owe you one.

Bruce

Hi Fran, A similar incident happened to me I was in Penny's she said if I open an account I would get an additional 33% off a already reduced price of an item. I said no..I didn't want a credit card. She said well you could open it to get the discount then go back and pay the credit department what the balance was. Ok...I fell for it, purchased my item...but....when I went to pay at the credit department...they told me to wait until I got a bill because IT wasn't in the system yet....got the bill went immediately to the store to pay off the balance...leaving a 0 balance with no intention of using it again. A few weeks I get a letter saying my interest rate has been changed to 23%....I could care less... I won't use the card...but talk about gorging the public........Something needs to be done with the methods these credit cards use. And to boot...they want bailed out.....Why? we already end up paying for thedir debts through excessive interest hikes.....a big sore spot..and joke

Thanks Fran! I too got that letter from HSBC. I plan on paying it off with part of a closing commission this month and never using it again!!! I don't want to opt-out and have a closed account on my credit report, I was told that is bad for your credit score. I don't understand because all of my other credit cards are paid off and I'm never late.

Another thing happened with Bank of America lowering my credit line from 2000 to 500 and I've had that card for years (recently with a 0 balance). I called them and they said I have to wait 6 months before they will raise it again. I'm done with credit cards. Cash only from now on! - Debbie in Austin, TX

This is a good warning letter. I always pay mine monthly but I don't want them doing that to me anyhow! Thanks for telling us to beware.

Thanks for the warning. I am one more person who often ignores those innocent-looking envelopes from my credit card companies. I'm going to really watch them and read them carefully. Getting such a beneficial "heads up" is one reason why Active Rain is so terrific.

You always have to remember that credit cards issures want everything in there favor. I have 2 but pay them off in full monthly. My zip code post office was flooded and closed for over a year from Katrina. So we get very little junk mail anymore. What is not to miss?

HEADS UP! One of the reasons that the credit card companies are pulling these stunts is because they know that the credit offers are slowing down in the wake of the credit crunch. A year ago it would be foolish of them to do such a thing because we can just take our business elsewhere...now it's not so easy. Before you close an account over this, consider whether or not you might need an emergency credit line to take advantage of between closings.

Fran,

Great post. Thanks for the warning. I think everyone is running scared. The credit card companies,

banks, etc. But doing this to good customers is cutting off their noses. IMHO

Amanda, I agree with you, don't close it, just transfer it. You always need credit lines open. Missy

Thanks for this informative post! I'm so glad I'm able to pay off my ONE credit card each month. I did forard this post to my siblings and friends as a heads-up and warning.

This has been happen for awhile. I got a letter from one of my cards last year and end up writing a letter. A friend of my did not read her letter and then her rate went up. Then she wonder what happen. She was telling me about and I was the one that told her that you could write a letter.

Whoa...

Amanda when was the last time someone said "We appreciate YOU" ?? :)

Looks like we just need to leave it open and not use it. Thank you My Friend.

TLW...ROAR!

TLW, your awesome hubby is the one that pointed out sometime around September that credit card companies are slashing credit limits and affecting credit scores. There are tons of agents who use their cards in between closings and pay them off when escrow closes. Some do it for expense tracking purposes, some for airline miles, cashback rewards, etc.

Here's the problem...When agents use their commissions to pay down or pay off their cards sometimes the response from the bank is a slashed credit limit. It causes a problem for the agents who rely upon those credit lines to generate the next closing because they just spent their cash AND now they don't have the credit line. Couple it with the situation Fran mentions in this post and the meltdown begins.

It's a colossal damned if you do, damned if you do situation.

I wish everyone the best...it is crazy what all is happening out there these days.

Well...

I was extremely unwell in September and missed the whole thing. BB never tells me bad things when I might be dying :)

Now I know and it explains some of the things I've seen him do :)

TLW...ROAR!

Good grief -- likely the mail looks like junk mail -- rather tricky to catch you unaware.

Yes we too had one of these from Capital One. We opted out very quickly, They are no longer "In Our Wallet"

Not only are they raising rates, I've also heard that credit limits are being lowered. Consumers need to be very diligent in all of their financial affairs right now.

Fran: WOW! I can not believe that this is legal. I have heard of rates increasing, but double for no apparent reason. I will be reading all mail. Thank you again for sharing this valuable information.

Fran,

It's rather shameful how credit card issuers are trying to cover their losses. They should take care of their better customers instead of using them in a sneaky way with hiked interest rates.

DEC

Fran

The banks are getting really sneaky. I had one card with a balance on it, and I paid it off in full in November. My plan was to pay it to zero and then use it to do a low-interest rate balance transfer from higher interest rate card. I pooled all my cash and paid it to zero.

THen I got a letter stating they cut my credit line from $12,500 to $500. Damn! THey cut my credit and now I cannot use the balance transfer to reduce my interest rate.

Leave a response…

Name:

Email:
(optional)

Comment:

What does the graphic say?